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Most expensive health insurance claims

18 July 2019

Knees and hips top list for most expensive health insurance claims

Figures released today by New Zealand’s largest health insurer, reveal that knee and hip replacements top the list of recent claims for surgical procedures made by Kiwis, with a combined value of $ 94.7 million paid out by Southern Cross Health Society.

Knee and hip replacements were in every region’s list of top five claims made to Southern Cross Health Society in the last year, except Gisborne, where hip replacements didn’t make the top five.

In total, more than $47.4 million was paid out on knee replacements and $47.2 million on hip replacements, with colonoscopies coming in close behind at almost $44 million. Skin lesion removals and cataract extraction and inserts followed, with $37.5 million and $28.2 million paid out respectively.

Though just 8 per cent (240,000 procedures) of all claims were for elective surgery, they accounted for 70 per cent of overall claims costs, with the most expensive surgery coming in at $211,978, for a spinal fusion.

Southern Cross Health Society Chief Medical Officer, Dr Stephen Child, says that the not-for-profit Friendly Society provides cover for about 870,000 Kiwis, which is roughly eighteen per cent of the population, providing huge insight into the health requirements of New Zealanders.

“Many conditions require very complex and expensive treatment. While we have a very good public health system in New Zealand, it’s under increasing pressure. You never know what’s around the corner, and the safety net that health insurance provides can be a huge relief to ensure you receive high quality treatment when you need it,” says Astwick.

The three most expensive claims from the last year were all for spinal fusion procedures. While less common, these procedures are often the most expensive to fund due to their complexity. This procedure type came sixth on the most expensive claims list, requiring $25million to be paid out to New Zealanders for just 539 spinal fusion surgeries.

The surgical procedure types with the highest paid amount overall by Southern Cross Health Society were:

Top 5 claims for surgical procedures by total paid – nationwide

From 1 April 2018 to 31 March 2019

ProcedureTotal paidVolume
1Total Knee Replacement$47.40M1,870
2Total Hip Replacement$47.30M2,005
4Excision Skin Lesion$37.57M29,812
5Cataract extraction and insert$28.23M7,638

Child explains that claims differ greatly according to age and gender.

“We see a lot of claims for tooth extractions from those aged under thirty. As the age of our members increases, we see a lot more of the claims on our top five list – hip and knee replacements, colonoscopies, skin lesion removals, and cataract extraction and insertions.”

The data reinforces Southern Cross’ position as an industry leader in paying claims. In the 2018 financial year, for every one-dollar Southern Cross Health Society received in premiums, it paid out 92c in claims. This is greater than the average rate of return among other insurers which sits at 65c and in some cases, as little as 59c.

The Society’s Affiliated Provider programme has helped to keep rising healthcare costs in check. Following the last financial year, the programme achieved $91 million in price-related savings over five years*.

Data specific to each region has also been collected, including the top five claims by total paid in regional areas across the country – available on request.

*To calculate the estimated price-related savings, the impact on claims of utilisation and the addition of new benefits was identified and excluded.


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