Outsourcing for the Future Presentation to the AHIA

Outsourcing for the Future Presentation to the AHIA National Conference 2007 Mr Keith Joyce Benefits Risk Manager Medibank Private

What are the Benefits to Outsourcing? • Savings of FTE positions –Equivalent 16 FTE. • FTE’s can be returned to core business functions. • Reduced on costs/overheads. • Use of specialist expertise & services. • Network with professional organisations eg Australian Lawyers Association, Leading National Law Firms. • Low impact at customer level, improved service and delivery of service.

Recoveries • Common Law & Medical Negligence Compensation. • Growth area for compensable recoveries – medical indemnity & increase in litigious society • Medibank Net rate of return has increased 12 fold. • Major areas include class actions, product liability (prostheses) & asbestosis.

Who do we use? • NHRA has 40% Insured Market Share Australia Wide. • Industry Knowledge, Specialist Skill Set & Contacts. • Innovative and Market Leader. • Quick reaction to current issues. • Greater returns, lower costs and quicker results than using traditional process eg- court/legal strategies.

The Statistics • Over 50, 000+ transactions conducted by NHRA on behalf of MPL last Financial Year. • Zero Member/Customer Complaints.

The Journey so Far

Added Value Rates of return guaranteed for every dollar accrued. • Before outsourcing less than 30 Cents in the dollar. • Now Increased to over 70 Cents in the dollar.

Traditional Intelligence Leads TRADITIONAL LEADS Members Or Providers • Members. • Providers. • Claims. Traditional Leads • Solicitors. Claims Solicitors

Use of Intelligence Non Traditional Legal Network Professional Associations Media/Courts

Medical Indemnity Claims in Australia 2004 -05 • Common incident/allegation type leading to a claim: • Procedure 30. 5% • Diagnosis (23. 6%) • Treatment (13. 2%) • Age Demographic of those affected: • Babies <1 yr Old 3. 6% of new claims • Children <18 yrs old 5. 0% of new claims • Adults 18+ 61. 7% *Source Australian Institute of Health & Welfare Canberra May 2007

Medical Negligence – A Comparative

Case Study: Medical Negligence • Member contracted severe secondary infection while in emergency at a major hospital. • Subsequent amputations and reconstructive surgery were required. • Negotiations resulted in an out of court settlement reached. • Medibank Private obtained restitution agreement of in excess of $200, 000 to cover the payment of past medical expenses. • Case management of more than 3 years involving negotiations meetings with member, solicitors and medical professionals.

Summary • Rates of return outweigh managing in house. • No interruption to the business interface. • Increased cash flow. • Greater Returns. • Company able to focus on core business. • Improved customer outcomes.