Medibank

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Medibank
Type Government Business Enterprise
Industry Private Health Insurance & Disease management
Founded 1976 as arm of the Health Insurance Commission
Headquarters Melbourne, Australia
Key people George Savvides (Managing Director)
Products private health insurance, travel insurance, life insurance, pet insurance, travel medicine, workplace health promotion, workplace health management, Health call centres
Revenue A$5.4 billion (2012)[1]
Operating income $197.4 million (2012)[1]
Net income $126.6 million (2012)[1]
Employees 4,500
Subsidiaries ahm (Australian Health Management)
Website

www.medibank.com.au www.medibankhealth.com.au www.ahm.com.au

www.traveldoctor.com.au

Medibank is an Australian government-owned private health insurer, established under the Fraser Government in 1976 through the Health Insurance Commission (now known as Medicare Australia). It is Australia's largest health insurance provider with 3.6 million members, 30% of the market, under two brands.

Medibank was set up to provide competition to private "for-profit" health funds. Although government owned, the fund has operated as a government business enterprise since 2009, operating as a fully commercialised business paying tax and dividends under the same regulatory regime as do all other registered private health funds. Highly regulated regarding the premiums it can set, the fund was designed to put pressure on other health funds to keep premiums at a reasonable level.[2][3] In 2006, the Coalition Howard Government announced that Medibank would be sold in a public float if it won the 2007 election,[4] however they were defeated by the Australian Labor Party under Kevin Rudd which had already pledged that it would remain in government ownership. Liberal leader Tony Abbott made the same pledge to privatize Medibank if it won the 2010 election but was again defeated by Labor. Privatisation was again Liberal party policy at the 2013 election, which the Coalition won. On 26 March 2014 Minister for Finance Mathias Cormann announced that Medibank would be sold through an initial public offering in the 2014-2015 financial year.[5]

Services[edit]

Medibank acquired the Wollongong based insurer AHM (Australian Health Management) in January 2009 and merged with the HSA Group in April 2009.[6] Following these transactions, Medibank created the Health Solutions Division, which is focused on delivering occupational health services (such as employment medical examinations and injury treatment), preventative treatment (e.g. flu and travel vaccinations) and health coaching programs to help Australians manage health conditions (e.g. diabetes). Services are delivered under the Medibank Health Solutions and Travel Doctor brands.[7]

In July 2010 Medibank acquired fellow health services provider, McKesson Asia-Pacific, absorbing it into Medibank Health Solutions. The move extended Medibank's health management capability and essentially completes Medibank’s transformation into a genuine health company that offers health insurance and health solutions.

The telephone and online health management programs services provided by McKesson Asia-Pacific, including 'healthdirect Australia', 'NURSE-ON-CALL' and 'Healthline' will be maintained by Medibank.

In March 2010 Medibank Private withdrew benefits for restricted services on its basic First Choice Savers hospital policy. As of June 2010, benefits for procedures such as heart operations and assisted reproductive services will be available only to customers on more comprehensive policies costing as much as 50% more.[8] Medibank stated that the changes were intended to improve customer understanding of their products. They further stated the impact on customers will be small, due to the low rate of use of the restricted services.[9]

Corporate structures[edit]

'Not for profit' to 'for profit' health fund[edit]

Medibank was previously run as a not for profit organisation and currently operates as a for-profit Government Business Enterprise with dividends paid to the Federal Government.[10] In May 2009 the Rudd Labor government announced that Medibank would become a 'for profit' business and would therefore in future pay tax on its earnings. The process of converting the status of the business was completed on 1 October 2009, following approval from the regulator, the Private Health Insurance Administration Council (PHIAC),[6][11] an independent statutory authority that regulates the Australian private health insurance industry. Private health insurance policy is set down by the Federal Department of Health.

Privatisation proposals[edit]

In April 2006, the then Howard Liberal government announced its intention to privatise Medibank Private if re-elected at the 2007 election.[12][13] Labor Party policy was for Medibank to remain as a government business enterprise (GBE), reporting to the Minister for Finance. Following the election, won by Labor, Medibank Managing Director George Savvides said he looked forward to working with the Rudd Labor government but for Medibank employees and members it would be "business as usual" as they will remain a GBE, "which is what we know, removing the ownership change agenda from our planning process".

In 2014, the Abbott Government prepared for a $4 billion proposal to privatise the entity.[14] The Government argued that the sale would be positive by increasing funds that can be used for taxpayers, but some, including Ray Williams, the public servant who created Medibank Private in 1976, said benefits should flow directly to customers who had paid money to Medibank Private.[15]

Industry structure and main competitors[edit]

Private health insurance in Australia is heavily regulated to protect consumers.[citation needed] Prudential supervision is undertaken by PHIAC to ensure the funds remain solvent.[16] PHIAC also publishes extensive statistics on the industry and annual financial statement for individual health funds to provide full transparency for stakeholders. The pricing and features of health insurance products is regulated by the Department of Health.[17]

To inform consumers, the Private Health Insurance Ombudsman operates a website to explain private health insurance and provide a standardised basis to compare health fund products.[18]

Sponsorship and community[edit]

Sponsorship[edit]

Medibank Private's sponsorship[19] policy is to support events and programs that encourage people to be healthy and active.[20] It is the naming-rights sponsor of the annual Medibank International Sydney tennis event, and Junior Tennis in New South Wales.[21]

Medibank supports the West Coast Eagles AFL football team and the Medibank Private Active Tasmania Awards. Medibank also has the naming rights to Medibank Private Stadium (formerly Leederville Oval), home of WAFL teams East Perth and Subiaco, as well as Medibank Icehouse, home of the AIHL teams Melbourne Mustangs & Melbourne Ice, and the Olympic Winter Institute of Australia.[22][23] The Medibank subsidiary ahm is a supporter of the 2009/10 NBL Grand Finalists, the ahm Wollongong Hawks.[24]

Until 2008, Medibank Private was the principal sponsor of the rugby league team Melbourne Storm.

Community[edit]

In 2009, under its new sponsorship policy, the company reduced its sponsorship of high profile sports teams in favour of improving the health of Australians and re-allocated sponsorship funds to create a new joint initiative. Medibank Private teamed up with The Wiggles to launch "Wiggle Into Health"[25] with the aim of inspiring young families to adopt healthy behaviours that lead to a healthy life.

Medibank also supports the community through staff charity and volunteering activities.[26] The company gives paid leave to staff for volunteering activities with the charities it supports and 'gift matches' staff donations to charitable organisations nominated by the staff member (up to A$500 per staff member per annum). The organisations Medibank supports through volunteering are:

  • White Lion - Courage to Grow - empowering disconnected young people[27]
  • JDRF - Juvenile Diabetes Research Foundation Australia[28]
  • The Salvation Army in Australia[29]
  • Ronald McDonald House Charities[30]

Health and well-being promotion in the community is advocated by Medibank through the financial support for research, with a particular focus on the risks associated with inactivity.[31][32]

Medibank Special Purpose Fund[edit]

Medibank previously operated a special purpose fund that gave grants for medical treatment that is not covered by traditional insurance policies for its members. Typically the grants were for rare, innovative clinical treatments that are not covered by private health insurance or Medicare. The grants did not cover members who were under-insured, or cosmetic procedure,or experimental treatments. The fund was open only to Medibank Private members. The fund is now closed.[33]

References[edit]

  1. ^ a b c Medibank
  2. ^ "Opposition plans to sell Medibank Private". ABC News. 21 February 2010. Retrieved 29 June 2013. 
  3. ^ Reece, Nicholas (16 February 2013). "Hanging on to Medibank is a national health hazard". Sydney Morning Herald. Retrieved 29 June 2013. 
  4. ^ Packham, Ben (13 September 2006). "Election fight over $2b Medibank plan". Herald Sun (News Limited). Retrieved 29 June 2013. 
  5. ^ "Medibank Private: Government announces sale through IPO, subject to market conditions". ABC News. 26 March 2014. Retrieved 26 march 2014. 
  6. ^ a b Lindsay Tanner Press Release
  7. ^ Medibank Health Solutions "about us"
  8. ^ Metherell, Mark (25 March 2010). "Medibank slashes benefits". The Age. Retrieved 30 March 2010. 
  9. ^ Medibank Press Release - Medibank simplifying hospital products, 25 March 2010
  10. ^ Governance framework and principles for operating government owned business entreprises
  11. ^ PHIAC Press Release: PHIAC approval for conversion to a 'for profit' insurer
  12. ^ Dept. of Parliamentary Services 2006 research brief into the proposed sale of Medibank Private
  13. ^ Medibank Private: Corporate Information
  14. ^ Aston, Heath. "For sale: Medibank readied for $4b float". Sydney Morning Herald. Retrieved 14 February 2014. 
  15. ^ Thomson, Phillip (28 March 2014). "Medibank Private sale 'tantamount to theft', says founder". The Canberra Times (Fairfax Media). Archived from the original on 28 March 2014. 
  16. ^ PHIAC
  17. ^ Department of Health
  18. ^ PHIO
  19. ^ Medibank
  20. ^ Medibank Sponsorship Policy
  21. ^ Tennis NSW
  22. ^ Austadiums
  23. ^ West Coast Eagles
  24. ^ NBL
  25. ^ Wiggle into Health
  26. ^ Medibank Community
  27. ^ White Lion
  28. ^ JDRF
  29. ^ Salvation Army Australia
  30. ^ Ronald McDonald House Charities.
  31. ^ Stand Up Australia
  32. ^ The Cost of Physical Inactivity
  33. ^ Medibank Private: Special Purpose Fund

External links[edit]

Corporate Websites[edit]

Information websites[edit]

Charities supported[edit]

Research papers and Safer Healthcare Advice[edit]