Medical bodies are calling for Australia’s only national private hospital operator, Healthscope, and private health funds to resolve their dispute so that patients can avoid out-of-pocket price escalations, including those seeking eye surgery.
From 26 November 2024, private hospital operator Healthscope says it will begin charging an out-of-pocket fee to Bupa and Australian Health Service Alliance (AHSA) members in its 38 hospitals after failing to reach an agreement.
Healthscope, which lists 44 ophthalmologists working within its facilities, said this was “due to these insurers’ failure to sustainably cover the cost of patient care”.
The hospital network said members of these funds will pay a ‘Hospital Facility Fee’ to access care in Healthscope hospitals. The fee is $100 for overnight patients per admission and $50 for same day patients per admission.
Healthscope confirmed ophthalmology patients holding policies with these health funds would be charged the fee, but they could switch insurers to avoid it.
Some 4.1 million Australians take out their private health 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.
The Royal Australian College of Surgeons (RACS), which counts ophthalmologists among its fellows, said the breakdown in discussions will have significant implications for patients and surgeons.
“At a time when we know that cost of living pressures are hurting Australians, this is a terrible outcome,” said RACS president Associate Professor Kerin Fielding.
“This will result in healthcare costs going up and may lead to patients deferring or cancelling their surgeries or opting to undertake them in the public hospital system. This would only create issues downstream, or add significant pressure to an already under pressure public health system.”
He said RACS’ primary concern was ensuring patients received the care they needed when they need it.
“We also want to feel confident that surgeons have the necessary resources to provide that care, in an appropriate, high-quality manner. Patients would rightly be confused about why they are being charged an out-of-pocket fee on top of the insurance premiums they are paying, which they were told would cover the cost of these surgeries when they were needed,” A/Prof Fielding said.
“We ask that they resume negotiations in good faith and find an agreement that balances the needs of patients, surgeons, and healthcare providers, while recognising the increasing costs of delivering quality surgical care.”
Australian Medical Association president Dr Danielle McMullen said patients were at risk of being the collateral damage in each of the funding disputes between the private hospital operator and the private health funds.
“Patients are completely innocent bystanders in this unacceptable squabble, as they now face higher out-of-pocket costs imposed by Healthscope from 26 November,” she said.
“Doctors are also caught in the middle of these kinds of disputes, as they receive limited information about the proposed new fees and are inevitably forced into situations where patients ask for advice on whether they should switch funds.
“Our focus as a profession is on providing the best possible clinical care, not becoming de-facto financial advisors for our patients.”
Dr McMullen said the disputes reinforced the need for a Private Health System Authority.
“Policy holders are sick of private hospital groups and insurers constantly at loggerheads,” she said.
“It undermines the confidence Australians have in private health insurance arrangements and almost always leads to higher out-of-pocket charges at a time people are facing significant cost-of-living pressures.”
Healthscope and Bupa statements
CEO Mr Greg Horan commented said it was an outcome that Healthscope had been trying to avoid.
“We will not compromise on patient care. The high-quality healthcare provided every day by our dedicated clinicians and staff requires that these insurers provide adequate funding across all hospital treatments,” he said.
“The fee will go towards covering the patient’s care in one of our facilities.”
In a statement, Bupa was “shocked and disappointed” at Healthscope’s decision.
“Bupa continues its efforts to reach a fair and sustainable revised agreement just one year into our current three-year contract set to end on 31 October 2026,” the health insurer said.
“These planned additional charges to Bupa members is an unprecedented and unfair move by Healthscope. We have reminded Healthscope of its contractual obligations under our current three-year agreement which is designed to give patients certainty when they are at their most vulnerable seeking medical treatment.
“Our members come first. Bupa is committed to protecting its members and is considering all its options with respect to Healthscope proposing to unfairly charge Bupa members.”
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