New Medibank chief David Koczkar’s aim to eliminate out-of-pocket costs

Incoming Medibank chief executive David Koczkar will continue the health insurer’s strategy of acquiring strategic stakes in hospitals.

New Medibank CEO David Koczkar.

Incoming Medibank chief executive David Koczkar will continue the health insurer’s strategy of acquiring strategic stakes in hospitals as it aims to stamp out out-of-pocket costs and make private healthcare more affordable.

Medibank has promoted Mr Koczkar from its chief customer officer to the top job after seven years with the organisation. Before joining Medibank he was chief operating officer at budget airline Jetstar.

He will be paid fixed remuneration of $1.5m, with potential to double that in bonuses, and increase that by 150 per cent under Medibank’s long-term incentive plan. Short-term bonuses will be half paid in cash, with the other half in 12-month deferred performance rights.

Mr Koczkar told The Australian the private health insurer needs to ensure its policies reflected changing consumer preferences as well as make its offering more affordable as younger Australians continue to leave the industry.

“The majority of the population in Australia, which includes 3.5 million of our Medibank and AHM members have a diagnosed health issue, underlying health risk,” he said.

“Our opportunity is to play a role to ensure our customers have more choices for their health and wellbeing to offer them support to navigate the health system and support them with preventative healthcare options.”

This includes continuing Medibank’s strategy of acquiring strategic stakes in hospitals with short-stay models, which aim to divert money that would normally be spent on lengthy admissions into operation, reducing out-of-pocket costs.

Last month Medibank extended its foray into hospital ownership to Melbourne, signing a joint venture with 42 doctors to build a $64m short-stay hospital, which is expected to be completed in 2023.

It follows Medibank secured a 49 per cent stake of East Sydney Private Hospital at Woolloomooloo last August.

“There are many stakeholders in health and many stakeholders need to be aligned to make changes,” Mr Koczkar said.

“We will continue to advocate for our customers to give them a better deal in health and will also ensure that it’s clinically led and preserve clinical autonomy between patients and doctors.”

Retiring CEO Craig Drummond will remain with Medibank until June 30. Picture: Peter Ristevski

Medibank shares closed flat at $2.88, in line with the broader share market, after jumping as high as $2.91 in earlier trade.

Mr Koczkar will start on May 17, succeeding the retiring Craig Drummond, who will stay on until June 30 to ensure a smooth transition.

Medibank chairman Mike Wilkins said Mr Koczkar’s has been “a champion for our customers and has played an instrumental role in the growth and re-positioning of Medibank”.

His appointment comes after Medibank recorded its first six-monthly policyholder growth since 2013, signing up 49,000 new policyholders in the half-year to December 31. This included 17,600 to the Medibank brand, bucking the trend of people — particularly the young and healthy — withdrawing from health insurance in recent years.

“As our chief customer officer, David has been a champion for our customers and has played an instrumental role in the growth and re-positioning of Medibank. This has enabled Medibank to implement some of the largest changes undertaken by the private health insurance sector in Australia,” Mr Wilkins said.

“These changes have resulted in improved advocacy, retention and growth of customer numbers, significant improvement in the products and services experienced by our customers and enhanced performance for our shareholders.

“David’s experience and customer focus ensures that Medibank will continue to capitalise on the strength of its position. The board and I look forward to working with David as Medibank continues its journey to becoming a broader healthcare company.”