Idea of eradicating Covid-19 is ‘nonsense’, says NIB boss Mark Fitzgibbon

Mark Fitzgibbon, chief executive of health insurer NIB, has slammed the idea of ‘eradicating Covid-19’ as ‘a nonsense’.

Nib chief executive Mark Fitzgibbon says ‘what we have to learn as a society, just like we do with other disease states, is how to manage it (Covid-19) and get vaccinated’. Picture: Hollie Adams

Mark Fitzgibbon, chief executive of health insurer NIB, has slammed the idea of “eradicating Covid-19” as “a nonsense” — saying the world has yet to stamp out bubonic plague after 700 years.

His comments are at odds with Queensland Deputy Premier Steven Miles, who — amid enjoying a fresh spree of zero coronavirus cases — said the state may not relax border restrictions, even if the national vaccination rate hits 80 per cent.

But vaccination is the main tool in returning the country to some kind of normality. Business Council of Australia chief executive Jennifer Westacott said once we “hit 80 per cent, we cannot turn back, statewide lockdowns and border restrictions must be a permanent thing of the past”.

“Australian businesses, whether they are big or small, cannot continue to deal with the what-if and maybes – that’s no way to plan the reopening of the economy,” she said.

Mr Fitzgibbon said “nobody knows the duration of the pandemic” and society must learn to manage the virus.

“As a community I think we are now expecting that this idea of eradicating Covid-19 is a nonsense. We are no more likely to eradicate Covid-19 than we are bubonic plague,” Mr Fitzgibbon said.

“People can still get bubonic plague. But what we have to learn as a society, just like we do with other disease states, is how to manage it and get vaccinated.”

Mr Fitzgibbon backed the idea of mandatory Covid-19 vaccinations for health workers, with Australia’s second biggest private hospital operator Healthscope preparing to make jabs compulsory for its 18,000 staff, in-line with a new NSW policy.

He said NIB had considered following suit across its workforce but concluded it was difficult to implement unless the government issues a formal directive — something that Prime Minister Scott Morrison is preferring to leave to business, the unions and courts to sort out.

“I don’t think we will see much mandated vaccination as a condition of employment unless government legislates that’s possible because the exposure is too great,” Mr Fitzgibbon said.

“What do you say to Betty who’s been here for 25 years? ’Sorry Betty, you’re sacked if you don’t get vaccinated’?

“We have considered the idea but our position is we are going to do our best to encourage vaccination first and see how things pan out before we take a big step.”

Mr Fitzgibbon was speaking as NIB’s full-year revenue firmed 2.9 per cent to $2.6bn, outpacing claims, which increased 2.5 per cent to $2bn.

While he said it was a “strong result” he was quick to highlight challenges remain, particularly around elective surgeries. The Newcastle-headquartered group said catch-up surgeries were less than expected in the 12 months to June 30 and “remained difficult to forecast” as Australians stayed clear of hospitals out of fear of catching Covid-19.

It comes as hundreds of medical staff at Melbourne’s main public hospital, the Royal Melbourne, are on forced leave after a man infected with Covid-19 from Shepparton had surgery at the hospital. Meanwhile, two weeks ago a woman infected with Covid-19 attended Sydney’s Northern Beaches Hospital’s emergency department, sparking an alert at the hospital in Frenchs Forest.

“While there was some catch-up of deferred treatment during the year it was less than initially anticipated,” chief executive Mark Fitzgibbon said.

“There’s a lot of new ground here. Obviously people are going to be a lot more nervous having surgery during a pandemic and some cases just able to have surgery because of lockdown.”

But pandemic has reduced the spread of other common illnesses, such as influenza, has Australians adopt social distance, greater hygiene practices and are forced to stay at home during lockdown to contain Covid-19’s spread.

“Because of all the risk management measures we’ve taken as a community around Covid-19, it is having flow on effects to other diseases like other respiratory infections and flu,” Mr Fitzgibbon said.

“So we are seeing a drop-off in activity associated with those diseases, which is good.”

It still presents a double-edged sword for the health sector. While NIB’s net profit jumped 84.5 per cent to $160.5m — prompting NIB to return $15m in “additional claim savings” to members via an ex-gratia payment — the company’s shares plunged more than 11 per cent to $7.10.

“There seems to be a general thesis that while the pandemic persists, is good for payers of healthcare like insurers, like us, and not so good for providers you know like dentists and doctors and hospitals.

“And that’s true. We are benefiting from that and I guess the market expected us to benefit financially a bit more than we did.”

An increased focus on health pushed NIB’s flagship Australian residents health insurance (arhi) business to record 26,000 extra policyholders — a 4.2 per cent leap on the previous year.

“The pandemic has clearly heightened people’s awareness of the risk of disease and the need for financial protection as well as timely access to treatment. This is reflected in our policyholder growth which has also benefited from improvement in retention and resumption of previously suspended policies,” Mr Fitzgibbon said.

“(But) neither FY21 or FY20 can be considered “normal” given fluctuation in healthcare utilisation and claims experience. A high level of provisioning in our accounts for deferred claims especially caused a substantial decline in FY20 underlying operating profit, while our FY21 claims experience has turned out better than expected.”

Mr Fitzgibbon said NIB’s international inbound health insurance (iihi) and travel businesses continued to suffer from travel bans. Iihi membership fell 6.5 per cent, while NIB Travel sales revenue dived 74.1 per cent.

“While it wasn’t positive for our iihi and travel businesses we’re confident they will bounce back post-pandemic. Pre-pandemic in FY19, together these two businesses contributed $41.5m to group earnings compared with a loss of $19.5m in FY21.

“It speaks of the opportunity ahead and we’re using the current hiatus to modernise our systems and improve operating efficiency.”

NIB will pay a final dividend of 14c per share, fully franked, on October 5. This takes the full year investor payout to 24c.