Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Southern Cross posts $1.1 mln loss after unexpected claims

Southern Cross posts $1.1 million loss after unexpected claim costs

By Fiona Rotherham

Sept. 15 (BusinessDesk) - Southern Cross Medical Care Society, New Zealand's largest medical and health insurer, has recorded a $1.1 million annual loss after higher than expected claims from members.

The not-for-profit insurer's annual report for the June 2014 financial year showed a record $694.5 million claims were paid out, up 8.7 per cent on the previous year and that led to a turnaround from last year's $22,106 surplus to a $1.1 million loss.

Society chairman Graeme Hawkins said there was an unexpected increase in claims in the last four months of the financial year, particularly for orthopaedic procedures and specialist consultations.

"Although the society is not concerned with generating profit, the continuing rise in claims cost is of concern because it directly impacts the premiums of our members," Hawkins said.

The society earned $768.4 million in premiums, up 5.9 per cent on the previous year, while overheads were slightly reduced by $700,000 to $93.5 million.

For every dollar in premium income, the society paid out 90.4 cents to members, well above the industry average of 67.5 cents. Membership also declined but in line with the industry trend to 815,447 members, down 0.3 per cent on 2013. Still, the society continues to have strong reserves of $394.3 million, equivalent to about seven months in claims.

Society chief executive Peter Tynan said the society's affiliated providers programme was a key way of helping mitigate the impact of rising treatment costs. Begun in 1997, the programme now involves over 1,000 providers who seek prior approval and handle claims on behalf of members.

Around 34 per cent of all Southern Cross claims now come under the programme and the aim is to grow that to 60 per cent by 2016. Ten new procedures that would be covered by affiliated providers only were added this year and more will come this year, Tynan said.

There is resistance to the programme, now being copied by other industry providers, as it restrains the fees they can charge and locks out those that won't agree.

Southern Cross is the industry heavyweight covering 61 per cent of New Zealanders with health insurance and pays out 72 per cent of all health insurance claims.

Other tools for reducing costs include restricting new medical technology and procedures unless there is clear clinical benefit and also working with members who have been denied funding for accident or injury treatment by ACC. Tynan said the society helped 319 members challenge Accident Compensation Corp in the past financial year, leading to cost recovery of $1.7 million.

The society was also refunded a further $2.8 million for health services payments it had paid out that should have been covered by ACC.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>