Nib puts caps on amount it will pay for surgeries
Health insurer Nib will start capping the amount it will pay for some surgeries from September in a bid to stem rising premiums.
Nib said the move was designed to make health insurance more affordable by better managing medical claims.
Chief executive Rob Hennin said claims data revealed Kiwis were paying thousands of dollars more for surgery depending on where they live.
"We are seeing some shocking surgical cost variations between regions with no evidence of better quality health care, which is simply not acceptable," he said.
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"For instance customers in Auckland on average are being charged almost 40 per cent more for a knee replacement than those living in Canterbury. That's around a $15,000 difference. This has a very material impact on the price of premiums."
Health insurance payes medical bills for things like elective surgery should.
Under Nib's "First Choice" policy, the insurer will make policyholders aware of health providers who charge below the maximum.
But any policyholders who decide on treatment from a surgeon who charges more, will have to pay the difference out of their own pocket.
"Customers will still be able to choose any Nib registered medical professional from around the country. However, by selecting a First Choice network provider, they are guaranteed to have zero out-of-pocket expenses," Hennin said.
"Until now, our customers and in turn Nib has just had to accept these costs. This makes it very difficult for us to control claims costs which means that ultimately we have to charge our customers a higher premium."
"The First Choice network takes away this cost uncertainty by offering a network of medical professionals that provide our customers with services and treatment within a determined price range, meaning customers will have 100 per cent of their approved costs covered."
One of the biggest disparities was in the cost of mastectomies with customers in Auckland and Wellington paying significantly more that the national average, up 83.5 per cent and 62 per cent respectively.
Of three largest cities, Wellington, is paying the most, with customers living in the area paying 31 per cent more in total costs than the national average across the 26 surgical procedures surveyed.
Southern Cross, the largest health insurer in the country, launched its Affiliated Provider programme in 1997. The move was prompted by the variation in the costs of procedures, and the need to stem annual premium rises.
More than 60 per cent of Southern Cross-funded treatments by value are provided by health professionals like surgeons who have signed up to be Affiliated Providers.