Summary of the twelfth meeting of the Private Health Ministerial Advisory Committee, 13 February 2018, Department of Health offices (Scarborough House), Canberra

This page contains information on the Private Health Ministerial Advisory Committee – Meeting Summaries

Page last updated: 04 April 2018

Summary of the twelfth meeting of the Private Health Ministerial Advisory Committee (PDF 139 KB)


Dr Jeffrey Harmer AO, ChairSusan Azmi, Secretariat
Marcus Dripps, Allied Health Professions AustraliaMargaret Noris, Secretariat
Anne Trimmer, Australian Medical AssociationDebbie Hurlbut, Secretariat
Michael Roff, Australian Private Hospitals AssociationJosh Shanahan, Secretariat (Items 3 – 4)
Philip Truskett AM, Royal Australasian College of Surgeons Jane Ranson-Smith Smith, Secretariat (Item 4)
Tony Lawson, Consumers Health ForumVanessa Sheehan, Secretariat (Items 5a – 5b)
Matthew Koce, Members HealthCharles Maskell-Knight, Secretariat (Item 5)
Jane Griffiths, Day Hospitals AustraliaMitch Docking, Secretariat (Item 6a)
Dr Rachel David, Private Healthcare AustraliaPierre Nijssen, Secretariat (Item 9)
Garry Richardson, Expert memberNicole Keeling, Secretariat
ProxiesOther Attendees
Andrea Kunca, Medical Technology Association of Australia

Annette Panzera, Catholic Health Australia

Sue McGrath, COTA

Natasha Ploenges, Department of Health, Observer

Alex Caroly, Senior Adviser to the Minister for Health


Ian Burgess, Medical Technology Association of Australia
Toby Hall, Catholic Health Australia
Ian Yates AM, COTA
Mark Cormack, ex-officio
Penny Shakespeare, Department of Health

1. Welcome, apologies and introductions

    • The Chair noted apologies for this meeting.

2. Private Health Insurance reform implementation - Role of PHMAC

    • The Chair discussed the ongoing role of PHMAC based on his recent meeting with Minister Hunt.
    • Following the Government’s October 2017 private health insurance reform announcements the Committee will move from providing advice on the design of policy changes to assuming an implementation oversight role.

3. Mental Health

    • The Secretariat provided an update on implementation of the new mental health coverage requirements coming into effect on 1 April 2018.
    • Members noted that the Department had circulated to insurers for comment an exposure draft of the proposed legislative amendments for this change (rule changes), and that the Department would be holding a roundtable on 26 February 2018 with insurers, hospitals and consumer groups to discuss implementation and operational issues.
    • The Secretariat indicated that feedback received through these processes will help to inform the final drafting of the rule changes.

4. Product Design

    • The Secretariat provided the Committee with revised draft minimum product requirement options for Gold/Silver/Bronze/Basic hospital product categories based on feedback received.
    • The Committee noted the key themes arising from the feedback. Members discussed options for the treatment of restrictions, and the potential impact of the draft clinical definitions on minimum product requirements.
    • Members discussed whether proposed changes to the draft clinical definitions would provide greater clarity of inclusions within the Gold/Silver/Bronze/Basic product categories. This will be subject to further development work.
    • Members agreed to provide the Secretariat with feedback on the revised drafts of the hospital product categories and clinical definitions that were circulated at the meeting. It is expected that further updates will be provided out-of-session for comment.

5. Risk Equalisation update

    • The Committee considered the final report from its Risk Equalisation Working Group and related actuarial analysis on possible recalibration of existing risk equalisation aged-based factors to achieve a drawing rate net of risk equalisation that is broadly similar across age cohorts.
    • The Working Group’s report described the deliberations of the Working Group and provided a number of key findings and recommendations for possible reform.
    • Members were generally supportive of the recommendations of the Working Group with some qualifications.

6. Implementation of Reforms Update

    1. Improved Models of Care (IMOC) Working Group
      • Members endorsed the terms of reference for the Improved Models of Care Working Group.
      • An update on the establishment of the Working Group, which is expected to hold its first meeting in March 2018.
    2. Second tier update
      • At the last PHMAC meeting in November 2016 members were advised that the second tier default benefit would be retained with simplified administrative processes.
      • Members were advised that the Department will take over the administrative processes from the Australian Private Hospitals Association and that second tier eligibility will be aligned with the independent accreditation cycle.
      • Amendments to both the Private Health Insurance Act 2007 and the Private Health Insurance (Benefit Requirements) Rules will be required.
      • Changes to second tier will be implemented by 1 January 2019.
    3. Ministerial Advisory Committee on Out-of-Pocket Costs
      • The Secretariat advised that on 2 January 2018 the Ministerial Advisory Committee on Out-of-Pocket Costs (the Committee) was established and its first meeting was held on 8 February 2018.
      • Information about the Committee including a communique from the first meeting, the Terms of Reference and membership are available on the Department’s website.
    4. Private Health Information Statement
      • As part of the Reforms, the Standard Information Statement will be replaced by a new minimum data set.
      • Members were advised that a workshop will be held on 27 February 2018 with a range of stakeholders to discuss the information that would assist consumers in making informed decisions about private health insurance products.
    5. PHI Legislation
      • Secretariat advised members that the legislation to give effect to the Reforms is expected to be introduced into Parliament by the end of March 2018.
      • Rules will be made by June 2018 to support a range of the Reforms.

7. Update on the public consultation on funding for private patients in public hospitals

    • The secretariat advised members that towards the end of last year a public consultation on funding for private patients in public hospitals was held. Submissions to the public consultation can be found on the Department’s website.
    • At the 9 February 2018 meeting of the Council of Australian Governments (COAG), the Commonwealth presented the states and territories a Heads of Agreement for public hospital funding and health reform.
    • The Heads of Agreement contains further work for jurisdictions around the issue of public patients in private hospitals and can be found on the Council on Federal Financial Relations website.

8. Other regulatory issues

    • The members were advised that the focus of the Government would be to implement the package of Reforms by 1 April 2019.

9. Premium Round and the average formula

    • The Committee noted that the Department was considering establishing a working group of insurers to develop options to adjust the industry and insurer average formula to reflect the potential disruptive impact to the formulas of consumer movement across policies as a result of the private health insurance reforms.

10. Other Business