Not-for-profit hospital operators want to overhaul how they negotiate funding deals with health insurers, as private hospitals fight to ensure their survival. Source: Australian Financial Review.
Catholic Health Australia, which represents 63 private hospitals, has asked the competition regulator to approve a new provision that would stop Medibank Private, Bupa, NIB, HCF and HBF Health from negotiating individual funding contracts with hospitals while collective talks are under way.
The gambit, known as a collective boycott, is an attempt by hospital operators struggling with soaring costs to gain more leverage with the powerful health insurance sector which has condemned the proposal as “anticompetitive”.
“This proposal is necessary to level the playing field because the bargaining power of private health insurers has been growing for several years, resulting in terms that are extremely challenging and place enormous financial pressure on the day-to-day operations of not-for-profit private hospitals,” Alex Lynch, Catholic Health Australia’s director of public health, said.
The proposal was lodged with the Australian Competition and Consumer Commission last week as part of a submission to renew an existing ten-year deal covering the way Catholic Health negotiates with its suppliers and health insurers.
The deal will expire on September 5.
Insurance industry sources warn that if the ACCC approves Catholic Health Australia’s proposal, they could be forced to increase premiums. Policyholders might also have to pay extra for care in Catholic hospitals where funding contracts have lapsed.
Hospital operators say the $22 billion sector is at a crunch point, and it is time for profitable insurers to redistribute the spoils.
Soaring costs, rising wages and tanking patient numbers since the COVID-19 pandemic have led many of the country’s 650 private hospitals to lose money.
The Australian Medical Association also backs an overhaul of the way insurers negotiate funding deals, warning the existing system threatens to undermine the entire private hospital sector at a time when wait lists at public hospitals are at record levels.
Health Minister Mark Butler has launched a review of the sector with findings due next month.
FULL STORY
Hospitals seek right to boycott big insurers from funding talks (By Michael Smith, Australian Financial Review)
