Private Healthcare Australia CEO says ‘out-of-contract payments have not occurred in response to Brookfield and Healthscope’s heavy-handed US-style campaign’.
Three of Australia’s largest health insurers have apparently “caved” to Healthscope’s calls for additional funding, agreeing to out-of-cycle funding payments in the order of “tens of millions of dollars”.
But Private Healthcare Australia CEO Dr Rachel David says out-of-contract payments have not occurred in response to the “dismal failure” of a recent public campaign by the private hospital operator.
The Australian Financial Review reported that health insurers Medibank Private, nib and HCF had agreed to provide additional funding to Healthscope, after a nationwide campaign was launched by the private hospital operator last week against health insurers “bleeding local private hospitals dry”.
Additional payments have not yet been announced or confirmed by the insurers or Healthscope, but were leaked to the AFR by “five people with direct knowledge of the discussions but prohibited from speaking publicly about the deal”.
The new payments would be in addition to the regular three-year funding contracts, said the AFR.
None of the three insurers provided Health Services Daily with commentary on speculation of additional out-of-contract payments before deadline.
“We don’t publicly discuss contract negotiations,” a nib spokesperson told HSD.
Dr David told HSD that “out-of-contract payments have not occurred in response to [Healthscope’s Canadian owners] Brookfield and Healthscope’s heavy-handed US-style campaign”.
“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,” she said.
“This is occurring despite all health funds already having contracts in place to pay Healthscope hospitals for their services to insured people.”
Dr David added that some health funds were already providing out-of-contract payments to private hospitals to assist with the financial fallout of covid over recent years.
“Some of these payments have already been publicly disclosed and the details were provided to the federal government several months ago to inform its financial health check of the private hospital sector,” she told HSD.
Medibank announced last month that it had already provided $63 million over the last two years in additional one-off support to private hospitals.
According to Dr David, Healthscope’s recent campaign had minimal engagement from consumers and was a “dismal failure”.
“This is undoubtedly an embarrassment for Brookfield and its investors.”
Dr David said the campaign caused “unnecessary fear and distress” for consumers.
“There is no need to bring consumers into contract negotiations with health funds,” she said.
“This is not how we do business in Australia.
“Health funds continue to prioritise their members’ interests above all else and that includes keeping a lid on premium rises.
“Health funds will not give into Brookfield’s US-style bully tactics to prop up Healthscope.
“Brookfield has more than $1 trillion in assets. It can afford to pay Healthscope’s rent.”
Healthscope did not reply to HSD’s request for comment before deadline.