Southern Cross results show growing demand for private healthcare
Southern Cross Health Society released its annual financial results today, showing growth in both membership and the number of elective surgical procedures performed.
The 2016 financial year saw the Health Society membership grow to 820,469 – a net increase of just over 9000 members – and the number of elective surgical procedures grow by 10%, reaching 200,000 for the first time.
During the year the Society received $871m in premiums and paid $749m in claims. This included:
- 206,000 surgical procedures
- 428,000 specialist consultations
- 650,000 prescriptions
- 726,000 GP visits
Southern Cross Health Society CEO Peter Tynan says the growth in members is pleasing as the Society’s focus is on organic growth and retention.
“The Health Society continues to attract new members by providing excellent value for money – we pay 86 cents for every dollar received in premiums.”
The growth in new members and accompanying lower levels of claiming has resulted in a surplus of $35 million. This will be used by the Society to mitigate future premium increases, to improve services and to maintain reserves at appropriate levels.
“Because we don’t have to pay dividends to shareholders, here or overseas, any 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,” says Tynan.
“However, our key concern remains the rising cost of medical treatment and how we deliver value to our members in this environment.”
In the past year the business has continued to grow its Affiliated Provider programme – Southern Cross’ vehicle to mitigate medical inflation where specialists and providers provide healthcare services at agreed prices – to the point where it now accounts for over 50% of all claims costs.
The business has also continued to invest in digital transformation projects that make it easier for members to claim for healthcare services such as the My Southern Cross online platform and app where members can manage their policy online, as well as growing the Easy-claim network of providers.
“We want our members to make the best use of their policies– one way of doing this is by making the claiming process as easy as possible. We believe we’re on the right track as 71% of all claims received are now done electronically.”
Southern Cross Health Society overview for the financial year ended 30 June 2016:
To align with the annual financial results all amount are exclusive of GST.
- The Society’s membership increased by 1.1%, from 811,462 to 820,469.
- For every dollar of premium income received, the Society paid out 86 cents.
- The Society received premium income of $871m, a 6.4% increase from the previous year, and paid claims of $749m, up 1.4% from FY15.
- The Society made a surplus of $35million which can be attributed to the growth in new members and the accompanying lower levels of claiming (a smaller surplus of $5.8m was made in 2015 and a deficit of $1.1 million in 2014).
- Health Society Members make up 61% of all New Zealanders with health insurance.
- Southern Cross funds 71% of the country’s health insurance claims.
- The financial position of the Society remains strong and stable with $435m in reserves, equivalent to around seven months of claims.
- For the 14th consecutive year the Society received an A+ (stable) financial strength rating from Standard and Poor's.
Further information can be found in the 2016 Annual Report - Summary.