Private hospital operator Healthscope to terminate contracts with health insurers

ABC NEWS (Australia)

Australia’s second-largest private hospital operator is terminating its contracts with two private health insurers in a move which could affect millions of Australians

Transcript

00:00HealthScope is the second largest operator of private hospitals in Australia and they

00:07say they're doing this to cover the rising gap between what insurers are paying and how

00:12much it costs to provide healthcare.

00:15So in Australia, private hospitals have contracts with insurers to set an agreement on the price.

00:21So they've been in negotiations for quite some time now.

00:25Some insurers have agreed to up the funding that they're giving basically, others such

00:30as Bupa and the Alliance have said we're not doing that.

00:34So HealthScope came back and said, look, we're going to charge you a fee then.

00:38It'll be $50 per day per patient or $100 for an overnight admission.

00:44That's a one-off fee to cover the entire time you're in hospital.

00:48And Bupa and the Alliance refused to pay that and they're saying that they're threatening

00:53legal action now.

00:54And that's why HealthScope today has made this announcement saying they have no choice

00:58but to rip up these contracts.

01:00The peak body for private health insurers has accused HealthScope of, quote, throwing

01:05the toys out of the cot.

01:07It says the company, which is owned by a private equity firm in the US, is putting profits

01:11ahead of healthcare and they say, you know, giving more money basically can translate

01:17to high premiums for members.

01:19And then what can happen is the following effect is people will downgrade their policies

01:24or just cancel them outright.

01:26And then, of course, we have extra pressure on the public health system.

01:30So they're saying that this fee is unprecedented and it's an American way of doing business

01:36basically.

01:38And so the Alliance has told its members that there are 500 other hospitals that they can

01:43use where this won't apply.

01:46And Bupa says it's hoping to find a mutually sustainable solution with HealthScope.

01:52So this is looking at next year.

01:54So if the contracts are terminated, Bupa would end in February and the Alliance would end

02:01in March.

02:02HealthScope's warning that that could mean patients are paying hundreds of more dollars

02:06to be treated in a HealthScope hospital.

02:09There's around 30 of those across Australia.

02:13Private Health Australia is warning that that actually could be in the thousands.

02:17So pretty scary figures here.

02:21And some industry insiders told me this morning that we're really at a crisis point.

02:25There's been a lot of maternity services particularly cut or reduced this year.

02:30So the private hospital association says what's happening today could be a sign of the times

02:36and we can expect more of this to come.

02:39Insiders say HealthScope might be bluffing so it's a wait and see until early next year.

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