Australia’s second-largest private hospital operator has announced it will terminate its contracts with two major private health insurers.
Healthscope said it had no choice but to end its contracts with Bupa and Australian Health Services Alliance (AHSA) after they refused to pay a proposed hospital facility fee.
Healthscope said the fee would help cover the gap between health insurance payouts and the rising cost of hospital care, but said Bupa and AHSA threatened legal action to stop the introduction of the fee.
The contract with Bupa is set to be terminated from February 20, 2025 and AHSA will be cancelled from March 4, 2025.
The cancellation will impact about 6.6 million people who have private health insurance with these companies.
Healthscope CEO Greg Horan said it meant Bupa and AHSA members could pay hundreds of dollars more to be treated in a Healthscope hospital.
“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,” Mr Horan said.
Loading…
Healthscope said private hospital cost inflation was a sector-wide challenge and in the last five years 70 private hospitals had closed which showed the economics were “simply unsustainable”.
Earlier this year a new private hospital in Melbourne’s west closed just after 14 months of operation and there have been several closures of private maternity services across multiple states.
The peak body for health funds, Private Healthcare Australia, accused Healthscope of “throwing its toys out of the cot” and suggested patients speak to their doctor or health insurer if they were concerned about potential impacts.
CEO Rachel David said insurers couldn’t pay above-inflation increases to hospitals as the costs would be passed onto members ,who would most likely then downgrade or drop their health cover.
“This is another unethical tactic from a $1 trillion North American private equity firm that appears intent on holding health fund members hostage, while also trying to bully health funds into paying them more so they can increase their profits,” she said.
The ABC has approached Bupa and AHSA for comment.
