Australia: Dispute brewing over health cost transfers to insurers

Source: eDaily | 30 Sep 2016

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An A$1-billion (US$766 million) dispute is simmering between health insurers and public hospitals which admit patients and have them bill their insurer for the treatment.

State governments are encouraging public hospitals to identify patients with private insurance and convince them to bill their health fund, even though Australians have a right to be treated publicly for free, reported the newspaper The Australian. Patients are under no obligation to declare their insurance status.

However, hospital administrators now offer to pay their insurance excess and, in some cases, offer additional incentives such as free parking and meals for family members. But the practice is helping to drive up insurance premiums and has inflamed tensions between health funds and hospitals.

Australian Private Hospitals Association Chief Executive Michael Roff said: “If the government ended the compulsion for private health insurers to pay public hospitals for private patients, the insurers would save over A$1 billion a year, which could provide a cut in premiums of around 12%.”

Ms Rachel David, the head of insurance lobby Private Healthcare Australia, said that public hospital billing made up about 6% of premiums, but was growing at an average annual rate of 12%, partly fuelled by the states opening more single-bed rooms to members. “We can’t ban private patients in public hospitals altogether, as many private patients receive care in this setting for a legitimate reason,” she said.

Instead, insurers want monitoring of private patient flows through public hospitals, particularly emergency departments where they might be vulnerable to coercion; an end to state government quotas; and enhanced financial consent processes and greater transparency.

Health Minister Sussan Ley, who is conducting a review of the private health insurance market, said: “Our reform package will undertake a balanced approach to investigating issues across the supply chain that are putting pressure on premiums.”

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