A growing imbalance of power, transition towards US-style ‘managed care’ and integration of private hospitals poses a threat to Australian patients’ right to choose their doctor, their procedure or treatment, and their preferred hospital or facility.
It also brings an increased risk that many consumers will be priced out of healthcare, with the domino effect crippling an already struggling public health sector in Australia.
The Australian Society of Ophthalmologists’ (ASO) recent e-petition (EN6877) through the Parliament of Australia is not the first time the association has lobbied the government in the interests of Australian patients – which is pending a formal response from the Minister for Health.
Launched in late 2024, the e-petition called for the government to establish a Private Health Commission or Independent Authority to play referee to a divided private health sector, where hospitals are losing their footing as private health insurers (PHIs) reach for greater control and influence.
The ASO is not alone, with the Australian Medical Association (AMA) and numerous other bodies requesting the same as current mechanisms prove ineffective, at best.
The ASO has long campaigned to protect patient choice and limit PHI influence, successfully lobbying in 2015 to stop pre-approval activities and leading the ‘Your Right to Switch’ campaign since 2018 that educates consumers on their right to change PHIs without affecting waiting periods, if they’re dissatisfied. Our 2021 ‘Send the Eagle Home’ campaign prompted the Australian Competition and Consumer Commission to impose strict criteria on a US health fund from extending its ‘buying power’ and influence across the Australian health fund sector.
All of these issues remain live, however, a crumbling private hospital sector is now the backdrop, where PHIs stand to cash in as facilities close their doors and become available for sale at reduced rates.
There are questions around whether this has been an intentional PHI move to limit the premiums returned to private hospitals, contributing to their demise, and ultimately their own profit-driven, managed care interests.
What Australian patients need to know, and the government needs to factor into decision making, is the cons outweigh the pros with managed care.
Whilst it may arguably help to control healthcare costs and increase system efficiencies, as shown in the US, it comes with major losses for patients and their long-term health outcomes.
Patient choice can become significantly restricted with an inability to see preferred providers and incur out-of-network penalties, even in emergencies, if they are outside of the PHI’s doctor and hospital network.
We fear the ultimate decision to proceed with a procedure or treatment will no longer reside with the patient and be informed by advice from their treating doctor.
Pre-authorisations may often be requested by a PHI for procedures, tests or medications that can lead to treatment delays, denial of coverage if deemed “not medically necessary”, and result in added emotional and psychological distress for patients seeking to appeal such decisions.
There’s a risk comprehensive patient care will take a back seat to profits, with some examples reported to offer financial rewards to their in-network providers for limiting services or reducing costs – a clear conflict of interest.
An example currently under the microscope is Bupa’s Medical Gap Scheme (MGS). Concerns have been raised about whether this current structure disincentivises consumers from using hospitals outside Bupa’s network.
ASO president Dr Peter Sumich has written to Bupa several times, the latest on 2 April 2025, requesting clarity around the impacts to hospitals without a Bupa contract and subsequently on second-tier default benefits:
“It is understandable that the hospital fee paid to the day surgery by the private health insurer will be according to the contracts between those parties. However, the gap scheme product used by the surgeon should have nothing to do with the hospital’s contractual status. The financial arrangement between the doctor and the patient is separate to the financial arrangement between the patient and the hospital,” he said.
“Bupa are effectively penalising a patient because they are receiving treatment at a hospital which has decided for its own separate financial considerations not to adopt your contractual arrangements and therefore chosen second-tier default benefits.”
The facilities most at risk are smaller, independent sites operating outside of metropolitan cities and hubs. Australians living in regional and remote communities are already at a geographical disadvantage when it comes to accessing healthcare and being provided with local choice.
No Australian patient or doctor should be intimidated from visiting an accredited hospital or day surgery operating under second-tier default benefits, let alone the members of our community doing it the toughest with minimal resources.
ABOUT THE AUTHOR:
Name: Katrina Ronne
Qualifications: BBus (IR), MBA
Affiliations: Australian Society of Ophthalmologists, CEO
Location: Brisbane, Queensland
Years in industry: 15
Bupa’s response
“Our customers tell us that along with quality of care, reducing out-of-pocket costs is their highest priority, and one of their biggest frustrations when they’re going to hospital is these costs are often ‘unclear’.
Independent research by Patients Australia and La Trobe University reinforces this as a significant proportion of patients report being charged additional and unexpected fees for hospital-related services that were not included in the initial quote provided by their specialist.
We are focused on keeping costs as low as possible for our customers while supporting new, innovative models of care in collaboration with our hospital partners that ensure optimal health outcomes for patients.
Our Medical Gap Scheme (MGS) is designed to work together with our extensive network of contracted hospitals to promote transparency and cost certainty for patients on their admission. It means that when their doctor agrees to use the Gap Scheme for their treatment, they are also protected from any undisclosed or additional hospital gaps.
Our MGS also offers market-leading rates to participating doctors, including in ophthalmology where Bupa’s no-gap rates for the 10 most commonly claimed items are 6.5% higher on average than other major funds.
Bupa supports full clinical autonomy for all medical practitioners. We believe preserving the autonomy of healthcare providers and allowing them to make independent clinical decisions is fundamentally important to delivering the best health outcomes for a patient.
Of the 12 non-contracted hospitals providing ophthalmology services (where it would not be possible for Bupa‘s MGS to apply), only two are not in major metropolitan locations – Orange and Wollongong. Both of these regional cities also have local contracted hospitals available, which means patients and doctors have a choice.
Having 283 high-quality contracted hospitals that provide ophthalmology services all around Australia, means there that doctors and Bupa customers have a significant network to choose from. We are always open to engaging with any other facilities that are interested in partnering with us.”
