The Australian Medical Association (AMA) is urging Healthscope, Bupa and the Australian Health Service Alliance (AHSA) to immediately resolve their respective funding disputes for the sake of patients.
Last month, Healthscope, which runs 38 private hospitals across Australia, making it the nation’s second-largest private hospital group, announced it planned to charge members of several health funds a “hospital facility fee” of $50 for same-day services and $100 for overnight services from November 26.
At the time, Dr Rachel David, the CEO of Private Healthcare Australia, the peak body for health funds, described the as an “unethical new low” from a $1 trillion North American private equity firm that “appears intent on holding health fund members hostage, while also trying to bully health funds into paying them more so they can increase their profits”.
Healthscope is owned by North American private equity group Brookfield, which controls more than a trillion dollars’ worth of assets worldwide.
In the latest development, Healthscope has informed the same funds it is instead exercising its termination rights and has provided 90 days’ notice as required under the contracts.
In a release, the AMA said the latest move was of grave concern, as it meant Australian patients would face disruption to their planned surgeries or higher out-of-pocket costs.
AMA president Dr Danielle McMullen said unless all parties could come to an agreement before the contracts are terminated in February and March next year, some patients may face higher out-of-pocket costs for care in Healthscope hospitals.
“Last month, when initial tensions emerged between Healthscope, Bupa and the AHSA, we warned of consequences for patients, who are merely innocent bystanders in these kinds of squabbles,” Dr McMullen said in the AMA release.
“We have been in contact with all parties today to once again urge them to return to the negotiating table and sort out their disputes.”
Dr McMullen said these kinds of disputes caused mass confusion for patients, who understandably started questioning whether they needed to change health funds or seek care at a different hospital.
“This places doctors in difficult positions as their patients start asking them for advice on switching funds — but our focus as a profession is on providing the best possible clinical care, not becoming de-facto financial advisors,” she said.
Dr McMullen said this latest development reinforced the need for a Private Health System Authority.
“These kinds of disputes seem to be breaking out more frequently, much to the annoyance of policy-holders who need care, and doctors who just want to get on with the job of providing that care,” she said.
“This highlights the urgent need for a Private Health System Authority, which can have a crucial role in helping solve disputes like those between Healthscope and Bupa and the AHSA.
“An independent authority can drive long-term reform and ensure the sector is appropriately regulated, ensuring patients get real value for money from their private health insurance.”
In the meantime, the AMA said in the release that it “urges all parties to strike a deal that puts the needs of patients first, while also delivering a reasonable return for all parties and recognising the rising costs of providing quality care”.
Some 4.1 million Australians take out their private health cover with Bupa, while AHSA represents more than 20 not-for-profit and member-owned private health insurers that collectively cover more than 2.5 million people.
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