Powerful stakeholder groups in the medical industry are lobbying Health Minister Greg Hunt, who has promised to tackle health insurance premium costs and is weighing potential changes to hospital and medical device regulations, in a bid to safeguard their industries. Mr Hunt has also promised to publish a website listing specialist doctor fees. Loading Private Healthcare Australia chief executive Rachel David said rising healthcare costs were being fuelled by "an ageing population, increased use of health services and the rising cost of medical technology". "Premiums increase because these costs increase," she said. "Without further reforms to address rising healthcare costs, people will be forced into the public system." Think tank the Grattan Institute last month cast doubt on the future of the sector in a report that warned private health insurers faced a "death spiral" of rising premiums and the falling participation of healthy and generally younger members.

Grattan Institute health economist Stephen Duckett on Tuesday said private hospitals were the biggest cost to insurers, with prostheses such as hip replacements another significant cost, along with doctors' out-of-pocket fees. "All of them need to be looked at and it's absolutely right that we've got to actually rein in the cost," Dr Duckett said. "There are re-admissions and low-value care that need to be addressed, and we've got very expensive prostheses that need to be addressed." Loading Replay Replay video Play video Play video The APRA data shows the proportion of the population with hospital cover dropped to 44.2 per cent in the June quarter - the lowest level of hospital coverage since 2007 - as 28,539 people dumped their policies. The number of young people with private health insurance fell by 28,000 people, or about 6 per cent, in the 12 months to June 30, despite insurers offering 25 to 29-year-olds discounts of up to 10 per cent.

Dr Duckett said benefits paid to young people with health insurance were about half those paid to fund members generally. "So even with a 10 per cent discount, it's still a bad deal," he said. Australian Private Hospitals Association chief executive Michael Roff said insurance products with exclusions were turnings Australians off private health cover, while the practice of public hospitals pressuring insured patients to be admitted as private patients was costing health funds $1.2 billion a year, contributing to higher premiums. Dr David said the only way to bring down costs was to "address waste in the system" and regulate the "inflated prices" of medical devices.

"Removing red tape to allow insurers to fund more care out of hospital will also reduce costs," she said. Loading "In-hospital treatment doesn't have to be the default method of care as some patients prefer to be treated at home if suitable." But Ian Burgess, chief executive of the Medical Technology Association of Australia, said insurers had paid $13 million less for medical devices over the past financial year. "After-tax profits for insurers are up 15 per cent over the past three years as affordability for ordinary Australian families goes down," Mr Burgess said.

"The suggestion that an increase in use of medical devices by privately insured patients is somehow a negative is a clear demonstration that the private health insurers have lost focus on consumers." Loading A spokesman for Mr Hunt said the government was delivering "the most significant reforms to private health insurance in over a decade", making insurance "simpler and more affordable". "These reforms have helped to deliver the lowest private health insurance premium changes in 18 years," the spokesman said. "Work has already commenced with the healthcare sector to identify and implement the next wave of improvements for private healthcare."