�GRAND

GRAND UNITED GROUP LIMITED ABN89087648726

GRAND UNITED HEALTH FUND PTY LIMITED ABN 11 oas 266 986

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GRAND UNITED CORPORATE HEALTH LIMITED ABN 99 002 985 033
NATIONAL HEAD OFFICE Phone: (02) 9370 6700
GRAND UNITED BUILDING FreeCall: 1 800 800 245
149 Castlereagh Street Fax: (02) 9261 4656
YOUR ALTERNATIVE HIULTH FUND SYDNEY NSW 2000 Website: www.grandunited.com.au
Email: pbemer@grandunited.com .au
Correspondence to GPO Box 1507 SYDNEY NSW 2001

By email:

Dear ,

Further to our discussion last week, I am pleased to provide the following topline results from analysis of
Grand United Health Fund claims data over the last three years. The analysis was carried out by
PricewaterhouseCoopers.

The keynote finding from the analysis is that members with top hospital cover who also
choose to receive ancillary benefits for natural therapies and so-called 'lifestyle services',
claim $430 per person less every year in hospital and medical costs than members with top
hospital cover only, or top hospital cover with conventional ancillary benefits.

Across all levels of hospital cover, members who also receive ancillary benefits for natural
therapies & lifestyle services, claim almost $200 per person less every year in hospital and
medical costs than their counterparts who do not choose these services.

A simple extrapolation of these results across the entire privately insured population indicates the
potential cost savings for the nation's health system would be at least $1billion pa if all insured
people were appropriately supported with private health insurance benefits for natural and
preventative healthcare.

While limited access and support does exist in the private health insurance market, the fact that
Grand United expends 18% of it's top ancillary cover benefit costs on these services compared to
the industry's 2.4% overall clearly indicates how much potential exists to leverage this health
fund's approach of encouraging and financing relatively low cost preventative health _and lifestyle
measures in the short term to save significant medical and hospital costs in the medium to long
term.

I also wanted to share with you some of the output from our latest focus group research conducted with
women who utilise complementary healthcare benefits as part of their health insurance program. I am sure
these insights to their attitudes are no news to you, however it may surprise some to learn that these
people are intelligent and educated with a healthy mindset rather than radicals, 'hippies' or desperates
searching for a miracle cure!

Attitudes on Well-Being
• Natural therapies are about prevention, they are gentle, non-toxic, holistic, intuitive and balance
mind and body
• Natural therapies let her take responsibility for her own body and health. They make her feel
informed, confident and in control
• Diet and nutrition are a key focus in her life
• She resents the 'western' approach to medicine - but would turn to it for major illnesses or disease
• Counter balancing work and relationship stresses with (eg) yoga and meditation is about her
mental/emotional escape more than her physical release

Attitudes on Health Insurance

• Having Health Insurance is a sign of responsibility; it's about planning ahead and taking her health
and wellbeing seriously
 2
a She sees health insurance as a positive rather than a negative - her pro-active approach to
prevention and an integral, on-going part of her wellbeing
a She does not begrudge payment to GU - she sees it as 'building an asset' - her health

As you know Grand United has offered health cover for the widest range of natural and preventative heatth
care since the early 1990s. We are now able to demonstrate that our platform of support for
complementary health has delivered substantial cost savings to the health system and of course to Grand
United as a payer of healthcare costs.

We have been able to generate positive loyalty towards us as a service provider in a consistently
negatively perceived industry and our pioneering of health cover for complementary healthcare resulted in
55o/o business growth in the five years precedinq the Federal Government reforms that provided a shot in
the arm for a declining private health insurance industry.

Grand United is committed lo achieving sustainable long term improvements in health and cost outcomes.
We are very keen to work with the complementary health industry to ensure it achieves appropriate
recognition and support for the vital role it plays in preventative health and well-being.

Yours sincerely,

grr*/
È¿r,
Phillip Berner
Gcncral Managcr
A 2003 review conducted by PWC and commissioned by Grand United showed that
members with top hospital cover who also choose to receive ancillary benefits for natural
therapies and so-called 'lifestyle services', claimed $430 per person less every year in
hospital and medical costs than members with top hospital cover only, or top hospital cover
with conventional ancillary benefits.
As Australia faces a future of an ageing population and burgeoning healthcare costs it is
important together we continue to encourage Australians to be proactive in managing their
health.
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