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
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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.