This appeared last week:
Insurers deny caving in to Healthscope demands
Michael Smith Health editor
Sep 13, 2024 – 5.37pm
Private health insurers deny that they caved in to public pressure from hospital operator Healthscope to give it more money, accusing the private equity-owned group of launching an “unethical” advertising campaign that had been a “dismal failure”.
Medibank Private, NIB and HCF have agreed to out-of-cycle funding payments in the “tens of millions of dollars” in the past three weeks following intense lobbying from debt-laden Healthscope, which owns 38 private hospitals.
On Friday, the insurance lobby denied that the payments revealed in The Australian Financial Review were in response to Healthscope’s advertising campaign launched last week singling out three other insurers, including Bupa, which it accused of “bleeding it dry” by underfunding its hospitals.
Healthscope is owned by Canadian investment giant Brookfield.
“Out-of-contract payments have not occurred in response to Brookfield and Healthscope’s heavy-handed US-style campaign,” said Rachel David, the chief executive of Private Healthcare Australia, an industry body representing big insurance companies.
“The Brookfield campaign has been designed to pressure health funds into unsustainable, above-inflation contracts that would drive up the cost of health insurance for millions of Australians working hard to contribute to their own healthcare in a cost-of-living crisis.”
On Friday, Healthscope welcomed the funding injections but accused the insurance lobby of hyperbole and personal attacks.
‘Hyperbole and personal attacks’
“We’ve been in constructive dialogue with a number of health insurers, who have recognised the serious issues at hand for private hospitals and engaged with finding sensible solutions,” Healthscope chief executive Greg Horan said. “The insurers’ lobby group has offered no ideas or solutions, just hyperbole and personal attacks.”
Health funds said they had been making out-of-contract payments to private hospitals to help with financial difficulties for the past two years. Those payments are rarely disclosed, although Medibank said last month that it had contributed $63 million in additional funding across the sector.
On Friday, the insurers were keen to distance their latest payments from Healthscope’s campaign, although they did not say what specifically triggered the funding injection.
Sources said Healthscope had wanted insurers to tip in more than they agreed, demanding indexation gains that would have locked insurers into funding increases in the future. Insurers rejected that request, instead offering one-off payments as a consolation prize.
Even before it launched the campaign on September 4, Healthscope had been aggressively lobbying insurers to give it more money. In negotiations with them, it warned that it would be forced to close hospitals without financial help, something insurers want to avoid as well.
Dr David said the public campaign had caused distress for people planning treatment in Healthscope hospitals, including pregnant women booked to give birth, cancer patients, and people relying on mental health services. If a hospital operator goes out of contract with an insurer, patients often have to pay more for their treatment.
“It’s deeply unethical that they are threatening these vulnerable people with extra fees. There is no need to bring consumers into contract negotiations with health funds,” Dr David said.
“The Healthscope campaign has been a dismal failure, with minimal engagement from consumers. This is undoubtedly an embarrassment for Brookfield and its investors. This is not how we do business in Australia.”
Mr Horan hit back, saying Healthscope’s Protect Your Hospitals campaign focused on the insurers that were refusing to fund patient care fairly. He said thousands of health fund members participated in the campaign, which included advertisements radio and newspaper advertisements and on social media. He said nurses and hospital teams had also supported the campaign.
Bupa declined to comment on Friday, but sources said the insurer was still in talks with Healthscope and had previously made out-of-cycle payments. The Australian Health Service Alliance, which represents not-for-profit insurers being targeted in the Healthscope campaign, said it continued to work with Healthscope.
“The Australian Health Service Alliance (AHSA) and Healthscope entered into a new, two-year agreement earlier this year, which includes more than 20 of the nation’s not-for-profit health funds. The agreement is valid up until 2026,” AHSA chief executive Andrew Sando said.
Unexpected cost inflation
Ramsay Health Care, Australia’s biggest healthcare operator and one of the few profitable private hospital owners, declined to comment when asked if it was seeking similar payments. Although this was unlikely as it was in a better financial position, the company has previously brought health funds back to the table early or out of the normal contract cycle because of unexpected cost inflation.
Relations between hospital operators and insurers are more strained than usual because of cost inflation and a federal government review of the industry that has put the spotlight on the challenges facing the sector.
Last month, the country’s largest non-profit provider with 10 hospitals, St Vincent’s, reached a last-minute agreement with NIB after threatening to walk away and leave the insurer’s customers paying higher prices.
UnitingCare Queensland, which owns and operates four private hospitals, threatened to walk away this week from its contract with the Australian Health Service Alliance, a large buying group representing 22 not-for-profit insurers.
In 2022, Bupa and Ramsay hospitals failed to reach an agreement on how to cover costs. Bupa has more than 4 million customers.
Here is the link:
The bottom line here is that pretty much all health care costs are rising much more quickly than inflation and funding will become increasingly stretched! What this has to mean that both sides will have to give a little or get better and cheaper at what they do.
With the way healthcare is going the pressure can be assumed to be relentless!
David.
3 comments:
Here's a thought. If the use of medical and health data resulted in a net benefit, the private sector would be adopting it as fast as they could.
They haven't.
The same probably applies to the public sector.
They haven't either.
So who promotes it?
Governments, both state and federal.
Governments are the only ones who would spend so much on health records and not worry about the cost.
I wonder what they get out of having access to all that lovely personal data.
Whatever it is is of no benefit to health service providers, other than the data providers need to treat their own patients, but they don't share it with other providers or with many patients.
Dear Anonymous, when the likes of a former AMA President waxes lyrical about the huge benefits why would any Government or Politician believe otherwise?
I despair, because if only "they" would stop, sit back, and 'think, think, think' they would come up with a completely different view of the MHR world and how [another way] to tackle the 'problem'. Real progress would then be made and a useful valuable working 'solution' would emerge to the benefit of everyone. Such a pity.
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