Healthscope's latest move may change private health insurance soon
- Replies 0
Private healthcare in Australia is on the brink of a massive change.
The massive change could affect millions of Aussies in the process.
Healthscope, Australia's second-largest private hospital operator, terminated its contracts with two major health insurers, Bupa and the Australian Health Services Alliance (AHSA).
Healthcare's bold step followed after a standoff over a proposed hospital facility fee.
The proposed fee would range from $50 for same-day patients and $100 for overnight admissions.
Healthscope argued it was necessary to bridge the gap between insurance payouts and the rising costs of hospital care.
However, Bupa and AHSA refused to agree to the said fee and threatened legal action to prevent its implementation.
Healthscope will terminate its contract with Bupa by 20 February 2025
Meanwhile, its contract with AHSA will end by 4 March 2025.
This sudden change could affect around 6.6 million Australians, who may face higher out-of-pocket expenses for treatments at Healthscope hospitals.
Healthscope also confirmed that Medibank, nib, and HCF members will not be affected.
'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,' Healthscope CEO Greg Horan stated.
The private healthcare sector has seen the closure of 70 private hospitals within the past five years, indicating an 'unsustainable' trend.
The recent shutdown of a new private hospital in Melbourne's west after 14 months of operations, along with the closure of several private maternity services, underscored the fragility of the current healthcare system.
Private Healthcare Australia accused Healthscope, owned by North American private equity group Brookfield, of 'throwing its toys out of the cot'.
Private Healthcare Australia's CEO, Rachel David, stated that fee increases would inevitably lead to higher premiums.
This increase could cause them to downgrade their insurance or drop their coverage.
AHSA CEO Andrew Sando has echoed Ms David's sentiments.
'How and why the Australian government permits foreign private equity owners such as Brookfield to extract more profits from the already financially challenged private health care system is unclear,' Mr Sando said.
Mr Sando then reassured AHSA policyholders that they would still have access to healthcare under their extensive network of hospitals and providers.
Bupa expressed its disappointment over Healthscope's decision and emphasised its commitment to finding a solution that prioritises customers and patients.
Bupa CEO Nick Stone assured members that there will be no immediate changes to their coverage.
Additionally, other private hospital options should be available for Bupa members by February 2025.
The Australian Private Hospitals Association (APHA) warned that the standoff was indicative of a more significant problem.
According to APHA, private hospitals are underfunded by insurance companies.
CEO Brett Heffernan pointed out that despite inflation, the average payment received by hospitals from insurers has decreased over the years.
As the situation unfolds, the outcome could have significant implications for the future of private healthcare in Australia.
For those who rely on private health insurance for timely and quality medical care, the potential for increased costs should be a concern.
What are your thoughts on this issue? Do you have concerns about the future of your private health insurance? Share your experiences and opinions in the comments below.
The massive change could affect millions of Aussies in the process.
Healthscope, Australia's second-largest private hospital operator, terminated its contracts with two major health insurers, Bupa and the Australian Health Services Alliance (AHSA).
Healthcare's bold step followed after a standoff over a proposed hospital facility fee.
The proposed fee would range from $50 for same-day patients and $100 for overnight admissions.
Health insurance is important, especially for seniors who rely on it for regular check-ups. Image Credit: Pexels/Leeloo The First
Healthscope argued it was necessary to bridge the gap between insurance payouts and the rising costs of hospital care.
However, Bupa and AHSA refused to agree to the said fee and threatened legal action to prevent its implementation.
Healthscope will terminate its contract with Bupa by 20 February 2025
Meanwhile, its contract with AHSA will end by 4 March 2025.
This sudden change could affect around 6.6 million Australians, who may face higher out-of-pocket expenses for treatments at Healthscope hospitals.
Healthscope also confirmed that Medibank, nib, and HCF members will not be affected.
'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,' Healthscope CEO Greg Horan stated.
The private healthcare sector has seen the closure of 70 private hospitals within the past five years, indicating an 'unsustainable' trend.
The recent shutdown of a new private hospital in Melbourne's west after 14 months of operations, along with the closure of several private maternity services, underscored the fragility of the current healthcare system.
Private Healthcare Australia accused Healthscope, owned by North American private equity group Brookfield, of 'throwing its toys out of the cot'.
Private Healthcare Australia's CEO, Rachel David, stated that fee increases would inevitably lead to higher premiums.
This increase could cause them to downgrade their insurance or drop their coverage.
AHSA CEO Andrew Sando has echoed Ms David's sentiments.
'How and why the Australian government permits foreign private equity owners such as Brookfield to extract more profits from the already financially challenged private health care system is unclear,' Mr Sando said.
Mr Sando then reassured AHSA policyholders that they would still have access to healthcare under their extensive network of hospitals and providers.
Bupa expressed its disappointment over Healthscope's decision and emphasised its commitment to finding a solution that prioritises customers and patients.
Bupa CEO Nick Stone assured members that there will be no immediate changes to their coverage.
Additionally, other private hospital options should be available for Bupa members by February 2025.
The Australian Private Hospitals Association (APHA) warned that the standoff was indicative of a more significant problem.
According to APHA, private hospitals are underfunded by insurance companies.
CEO Brett Heffernan pointed out that despite inflation, the average payment received by hospitals from insurers has decreased over the years.
As the situation unfolds, the outcome could have significant implications for the future of private healthcare in Australia.
For those who rely on private health insurance for timely and quality medical care, the potential for increased costs should be a concern.
