Patients at dozens of private hospitals around the country will be left without health cover after operator Healthscope tore up agreements with major funds including Bupa and members of the Australian Health Services Alliance.
In October, Healthscope proposed a $100 fee for Bupa and AHSA members using Healthscope care facilities, in response to what it called “chronic underfunding” from insurers, and the rising cost of providing care.
In response, the insurers threatened legal action, Healthscope said.
“We were proposing the hospital facility fee following Bupa’s and the AHSA’s failure to recognise and fairly fund the rising cost of care. In the absence of fair funding, this fee was Healthscope’s best option,” Healthscope CEO Greg Horan said.
“The response from the insurers was lawfare, and we are not prepared to engage in protracted and expensive legal challenges.”
The agreement terminations will come into effect from February 20, 2025, for Bupa members, and from March 4, 2025, for the AHSA funds.
This latter group includes the health funds Australian Unity, GMHBA, Health Partners, Westfund and HIF.
“Healthscope cares for over 650,000 patients every year and we are absolutely committed to providing the best possible care,” Horan said.
“But we can only do this if we are adequately funded.”
Horan claimed that while private hospitals were losing money, health insurers were “banking record profits”.
“In an environment of rising costs and private hospital closures, it is unacceptable for insurers to fail their core purpose – funding the care of their members, particularly those like Bupa who are boasting of record profits,” he said.
AHSA said its own affected customers would amount to 2.5 million Australians.
Alliance CEO Andrew Sando accused Healthscope of “gouging” the public.
“Healthscope is driven by one thing – maximising returns for their investors, regardless of the impact upon the Australian private health care system,” he said.
“If the member-owned and not-for-profit insurers are forced to pay more to Healthscope to improve the profit of its Canadian private equity owners, then it inevitably stands that premium prices will be impacted, further compounding the cost of living pressures facing ordinary Australians.
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“Higher premiums create greater affordability challenges for ordinary Australians, fewer private health insurance memberships and participation, more reliance and pressure on public services and longer waiting lists.”
Healthscope is owned by Canadian multinational Brookfield.
Bupa issued a statement reassuring customers that they remained covered at Healthscope hospitals until at least February 20, 2025.
“Since March, Bupa has worked tirelessly to engage constructively with Healthscope and negotiate amendments that they requested to our current contract,” Bupa APAC CEO Nick Stone said.
“We are shocked and deeply disappointed by Healthscope’s action.
“They appear to be disregarding the interests of our shared patients and customers by seeking to impact their access to healthcare.”
Stone said he understood that Brookfield may have “viability” concerns for the business but said insurers and hospital operators should be working together to build trust in the system.
“This is a critical time for the private healthcare sector,” Stone said.
“Insurers and hospitals need to put aside their individual interests and work productively together, along with government, to ensure our joint customers and patients continue to have choice and access and our private health sector remains affordable and sustainable.”
