Healthscope, which runs Nepean Private Hospital, has dramatically terminated its contracts with two major health funds.
The termination will impact all Bupa customers as well as the customers in the Alliance Group, which includes Australian Unity, GMHBA, Health Partners, Westfund and HIF.
It comes after an ongoing dispute regarding funding.
Healthscope has already reached agreements with other major insurers including NIB, HCF and MediBank Private, who will pay more in funding.
But it has been unable to come to agreement with Bupa and Alliance, last month announcing it would charge patients insured with Bupa and Alliance extra fees.
Legal action by one of the health funds to enforce the contract terms and prevent patients being charged the extra out-of-pocket fee appears to have prompted Healthscope’s decision.
Healthscope CEO Greg Horan said it was left with “no option” but to terminate the agreements altogether.
“Healthscope cares for over 650,000 patients every year and we are absolutely committed to providing the best possible care. But we can only do this if we are adequately funded,” Horan said.
“We were proposing the hospital facility fee following Bupa’s and the AHSA’s failure to recognise and fairly fund the rising cost of care. In the absence of fair funding, this Fee was Healthscope’s best option.
“The response from the insurers was lawfare, and we are not prepared to engage in protracted and expensive legal challenges.”
CEO of Private Healthcare Australia, Rachel David, said it was an unprecedented move.
“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.
“If Healthscope was serious about delivering patient care to Australians in a cost-of-living crisis, it would negotiate an affordable and sustainable outcome, rather than throwing its toys out of the cot.
“There is no scope for health funds to pay across the board, above-inflation increases to private hospitals. People struggling with the cost of living will simply drop out or downgrade their health cover, which leaves Healthscope worse off as its customer base dries up.”
The terminations will come into effect on February 20 for Bupa and March 4 for Alliance.
Bupa has been contacted for comment.
Troy Dodds
Troy Dodds is the Weekender's Managing Editor and Breaking News Reporter. He has more than 20 years experience as a journalist, working with some of Australia's leading media organisations. In 2023, he was named Editor of the Year at the Mumbrella Publish Awards.