Health funds get poor report, but some stand out

The nation’s health funds lodged their premium increase proposals last week to the Federal Government. Timely then that a survey by Roy Morgan out this week confirms satisfaction with private health insurers has declined to 2013 levels.

Results show more than 10 per cent of Australians plan to leave their funds in the next 12 months and are shopping around. Lucy Cormack writing in the Age this week reported:

“The results, from Roy Morgan's Single Source survey of more than 50,000 Australians, found nearly all major health insurance providers had shown declining customer satisfaction in the past year, with overall satisfaction at 74.4 per cent, down from 76.3 per cent at the same time last year.”

The research revealed that over the past three years, HBF has maintained the highest satisfaction level of the five largest funds at 80.2 per cent, followed by HCF (74.3 per cent), Bupa (73.6 per cent), NIB (70.9 per cent) and Medibank Private (70.1 per cent).

Satisfaction scores with most of the largest 16 funds decreased in the past year.

Although nearly three quarters (74.4%) of private health insurance policy holders are either ‘very’ or ‘fairly’ satisfied with their provider, only 27.9% report being ‘very satisfied’.

The significance of looking at ‘very satisfied’ customers is that they are much less likely than any other segment (including those who are ‘fairly satisfied’) to either change to a different company or shop around before deciding what to do with their renewal.

Retaining customers is a key component of growing the customer base and as such, increasing the proportion of ‘very satisfied’ customers is an important metric to track and improve on.

Norman Morris, Industry Communications Director, Roy Morgan Research says:

“Price remains the primary reason that people shop around or change private health insurance providers, and any increase in rates normally attracts negative attention from politicians and the media. This research has shown that, in order to reduce the likelihood of their customers shopping around or changing funds, private health insurers need to pay more attention to increasing the proportion of their customers who are ‘very satisfied’. Currently, just over one in four customers are classified as being ‘very satisfied’ on average, yet they are the group more likely to renew without shopping and so increase retention levels.”

We asked members on social media:  Are you planning on switching? Do you think the switching process is easy? Here are some replies:

Patricia: 

We have been seriously thinking about dropping out......we are pensioners and its getting harder and harder to pay. We don’t have huge superannuation either to help us.

Anne Marie:

Already have [pulled out]. Insurance is a scam Tell people to give up alcohol, sugars, tannins, & exercise - good luck! Reap what you sow.

Have your say below in the feedback forum.