Southern Cross in good health
The financial year to 30 June 2015, saw Southern Cross Health Society pay out $738 million - 73% of the country’s health insurance claims.
Southern Cross Health Society CEO, Peter Tynan said that is a phenomenal amount considering that our 811,462 members make up only 61% of the insurance market.
“For every dollar received in premiums, the not-for-profit Society paid out an industry-leading 90.2 cents in claims. This clearly represents excellent value for our members, especially when you consider that the average for the industry’s for-profit insurers was 60 cents in the last financial year,” said Tynan.
The Society processed 3.1 million claims last year, with members benefitting from:
- 170,000 elective surgical procedures (up 15,000 from the previous year)
- 405,000 specialist consultations
- 687,000 prescriptions and
- 781,000 GP visit
“Because we don’t have to pay dividends to shareholders, here or overseas, any premium income not used to fund healthcare services is used for the benefit of members – either expanding policy coverage, improving services, strengthening reserves or running the Society. However, delivering value in an environment of rapid claims inflation isn’t without challenge,” says Tynan.
“We’re working hard to mitigate rising claims inflation and our main way to address this is the Affiliated Provider programme where we work with providers to agree prices.
“By joining the programme, providers are showing support for a sustainable private healthcare sector that remains accessible and affordable for New Zealanders. It also means they are able to better service their patients and receive payment for their services faster than through traditional claiming and payment processes.”
Southern Cross has 1266 Affiliated Providers across 20 specialties - such as skin, ophthalmology and orthopaedic. The programme currently accounts for around 45% of claims, and the business aims to grow this to 60% by the end of 2016.
Given the growth of claims and demand for easy access, electronic capability has also been a key focus for the business.
“In streamlining our service, we’ve created tools – such as the ‘My Southern Cross’ portal, where members can manage everything from claiming and updating contact details to AGM voting online.
“Members also have Southern Cross Health Society Easy-claim - point of sale, electronic claiming for eligible items and services. We currently have more than 1,300 Easy-claim providers, including GPs, pharmacies, physiotherapists, optometrists, audiologists and dentists.
“We will continue to develop these and the other initiatives in response to member demand for easier and faster service,” says Tynan.
Southern Cross Health Society overview for the financial year ended 30 June 2015:
- For the 13th consecutive year the Society received an A+ (stable) financial strength rating from Standard and Poor's.
- The Society made a modest surplus of $5.8 million (from a deficit of 1.1 million in 2014).
- The Society received premium income of $818m, a 6.4% increase from the previous year. This mirrored claims incurred, up 6.2% to $738m.
- The Society paid 90.2 cents in claims for every dollar of premium received (this figure was 90.4 cents in 2014)The Society’s membership decreased slightly by 0.5% to 811,462.
- Southern Cross funds 73% of the country’s health insurance claims.
- Members make up 61% of all New Zealanders with health insurance.
- The financial position of the Society remains strong and stable with $400m in reserves, equivalent to around seven months of claims.