Why Aussies are losing out when private hospitals and health insurers fall out

You might think that a dispute between a private health insurer and healthcare provider is just that – someone else’s dispute that has nothing to do with you. However, one recent dispute temporarily had the potential to put more than one million Australians out of pocket, according to financial publication Your Life Choices.

The recent dispute was between private hospital owner Healthscope and insurance group AHSA, who have, Australian Unity, Teachers Health Fund, CUA Health, Reserve Bank Health Society, CBHS Corporate Health, and CBHS Corporate Fund as their members.

So what happens if your health fund gets into a dispute with a hospital? Would you be at risk of losing out? And what can you do if you are affected? We answer these questions below. And remember, if you’re at all worried about being left out of pocket, you can speak to one of our experts at healthinsurancecomparison.com.au.

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Disputes between insurers and healthcare providers

Private health insurers enter into agreements with healthcare providers, including private hospitals, so that they can offer better value for their customers – including lower out-of-pocket expenses for a hospital stay.

Where there is no agreement between your insurer and a particular private hospital, or there’s a dispute preventing the renewal of an agreement, you can expect to pay more for treatment in that hospital. 

Healthscope vs smaller private health funds

ASX-listed hospital operator, Healthscope, is a leading private hospitals operator in Australia.

Healthscope was negotiating a new three-year contract to provide services to several smaller health funds who are members of The Australian Health Service Alliance (AHSA), but talks broke down and it took nearly a month for the two to reach an agreement in principle.

In this particular dispute, Healthcope considered the rates offered by the funds as insufficient to cover the cost of providing hospital service, while the AHSA viewed Healthscope’s proposed terms as too high for their members.

The dispute affected 42 private hospitals, including several major facilities across the country such as the Prince of Wales Private Hospital, Northern Beaches Hospital and Newcastle Private Hospital in NSW, Melbourne Private Hospital and La Trobe Private Hospital in Victoria, the ACT’s National Capital Private Hospital. Brisbane and Gold Coast private hospitals in Queensland, Darwin Private Hospital in the Northern Territory, Hobart Private Hospital in Tasmania, Mount Hospital in WA and Ashford and Flinders private hospitals in South Australia.

So how do disputes affect health fund members? 

In the case of Healthscope and AHSA’s dispute, if your preferred private hospital was one of the 42 owned by Healthscope and you were a member of one of the affected private health funds, then the dispute would have left you seriously out of pocket should you have needed to stay in that hospital. 

Essentially, if your fund and a private hospital can’t reach an agreement, you’d need to choose an alternative hospital that is covered by an agreement or be prepared to pay a portion of costs and any out-of-pocket expenses for your stay in hospital.

What can you do?

When funds and private hospitals owners are in dispute, you’ll need to study the list of private hospitals carefully and ask a number of questions.

Is one of your popular local private hospitals affected? Could you end up in a difficult position, having to choose between your hospital of choice and a more affordable hospital?

In the case of Healthscope and AHSA, there was a period where members had the potential to be left out of pocket if they needed hospital treatment, and there wasn’t a clear timescale when the dispute would be resolved. 

If you’re at all worried, the logical solution is to switch funds. You won’t need to serve any new waiting periods if you take out equivalent cover. And, in addition to avoiding the costs associated with any dispute, you may even save hundreds of dollars on your premiums when you switch insurers.

By using Health Insurance Comparison, a 100% Australian health insurance team, you can quickly and easily compare other health insurers from our panel of Australian funds to choose the best alternative policy.

Knowing the ins and outs of any dispute – and its potential impact on you – gives you the power to avoid the potential costs and protect your financial situation. 

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*Average savings based off 25,311 customers during 2020

Our experts can guide you through these uncertain times and make sure you’re not out of pocket. Talk to our experts now.

This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

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