Serendipity: On the same day private health insurer NIB reports an increased profit and gross margin, a decades-long, top-tier customer tells me coverage of the extra costs for superior, robotic prostate surgery is “discretionary”.
The customer, a friend of mine, is waiting to hear back from an NIB superviser whether his long membership might work in his favour for the extra thousand dollars or so for the robot’s use.
He is already going to be many thousands of dollars out of pocket for his surgeon’s “gap” fee.
Meanwhile, NIB happily reports it increased the gross margin on its Australian residents’ health insurance business from 17.5 per cent to 18.6 per cent.
That means 18.6 per cent of NIB’s $2,013 million of premium revenue – $374 million – did not go to hospitals, doctors, nurses, equipment or any kind of medicine.
The net profit margin increased to 7.3 per cent – $147 million. Dividends were increased by 18 per cent to 13 cents a share. Nice.
Another friend, a doctor, tells me some health funds have been resisting robot-assisted prostate surgery on the basis that the final outcome – curing the cancer – was about the same.
Not much the same is the considerable journey between diagnosis and that final outcome, a quicker recovery time from surgery being just one aspect.
A quick Google search finds plenty of medical evidence for why a bloke would prefer the robot, such things as “blood loss, transfusion rate and positive surgical margin rate were significantly lower … operation time was also shorter … rates of nerve-sparing, recovery of complete urinary continence and recovery of erectile function were significantly higher”.
But paying for the disposable bits required in robot-assisted surgery is “discretionary” for NIB.
NIB may be best known for its CEO’s desire to scrap Medicare and make private health insurance compulsory.
To repeat a phrase I’ve used before, private health insurance is the sheltered workshop of Australian capitalism, rolling in subsidies while the government also uses the tax system as a cattle prod to force customers to pay.
Despite that, most Australians don’t have private health insurance and the young continue to drop out of it in growing numbers.
No wonder the health insurance lobby would like it to be made compulsory.
The sharemarket wanted an even better story from NIB on Monday as the shares finished down 48 cents at $7.15.
Nonetheless, they are up $1.26 – 21 per cent – since the federal election.
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