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CHA has argued that a national private price would ensure the funding from health insurers reflects the cost of delivering care (Bigstock)

After very public blows traded between hospital service St Vincent’s and insurer NIB, health advocates are lobbying for a private “umpire” charged with regulating prices and preventing future disputes. Source: The Australian.

Advocates for the regulatory change argue it would benefit flagging private hospitals like St Vincent’s, given that annual price negotiations between insurers and providers are often modelled on insurance premium rate rises.

Last week, St Vincent’s made the unexpected decision to publicly air its fraught negotiations with NIB. Without successful negotiation, their contract will end in October.

Both Catholic Health Australia and the Australian Medical Authority have argued that health insurance providers have an obligation to return 90 per cent of the premiums accrued to customers, and that future rate rises should be tied to this target.

In order to do so, the two institutions have pushed for private health “umpires” modelled on the Independent Health and Aged Care Pricing Authority, which determines fair, competitive ­prices for public sector treatments.

Australia’s health insurers returned 83 per cent of premiums in 2023.

“The AMA has been calling for the establishment of a Private Health System Authority to drive the required reforms with a long-term view of the sector and the involvement of all stakeholders,” AMA president Steve Robson said. “This would also serve as an ‘independent umpire’ to ensure the system evolves as government policy intends.”

CHA has said in submissions to the federal government that it should be the role of the Health Department to ensure returns for patients and hospitals. In its submission, the CHA floated a model in which health funds with low returns were locked from higher premium increases.

CHA director Katharine Bassett said a national private price would reduce “complexity and debate”.

“A similar model already works well for public hospitals,” Dr Bassett said. “A national private price would ensure the funding from insurers reflects the cost of delivering care.”

Health insurer representative Private Healthcare Australia argued that a centralised government price setting system could be “disastrously inflationary”, but was not fully opposed to a new regulator.


Pricing authority the answer to NIB and St Vincent’s contract feud, experts say (By James Dowling, The Australian)