Northern Beaches Hospital operator Healthscope has confirmed it intends to terminate agreements with more than 20 mostly not-for-profit insurers, which will leave many Northern Beaches residents without full private cover at the local hospital in a matter of weeks.
This will not affect public patients and will no longer affect Bupa members after a deal was reached between Healthscope and Bupa in the last fortnight.
Who does it affect?
An agreement has not been reached between Healthscope and Australian Health Service Alliance (AHSA), which means there will be no private health cover (aside from transitional agreements and second tier default benefits – more on that below) for members of AHSA funds after 4 March 2025. AHSA funds include:
1. ACA Health Benefits Fund
2. AIA Health Insurance
3. CBHS Corporate PTY LTD
4. CBS Health Fund Limited
5. Defence Health
6. Doctors Health Fund
7. Emergency Services Health Pty Ltd
8. Australian Unity Health Limited
9. HBF Health Ltd (excluding WA)
10. Frank Health Insurance
11. GMHBA
12. Health Partners
13. Navy Health
14. Nurses & Midwives Health Pty Ltd
15. Onemedifund
16. Peoplecare Health Insurance
17. Phoenix Health Fund
18. Police Health Limited
19. Queensland Country Health
20. Reserve Bank Health Society Ltd
21. See-u by HBF
22. Teachers Health Fund
23. Territory Health Fund
24. TUH
25. UniHealth Insurance
26. Union Health
27. Westfund
28. HCI
29. Health Insurance Fund of Australia Limited
These members would move onto what’s called a second-tier default benefit, where an insurer pays at least 85 per cent of the average cost of the same treatment at a similar private hospital that it has an agreement with, and the customer pays the gap. The hospital determines the fee. This can still mean significant out-of-pocket expenses for patients.
Major headache for many
Described by Mackellar MP Dr Sophie Scamps as posing a “significant challenge for many Northern Beaches residents who rely on accessible and affordable healthcare services close to home”, Dr Scamps put the onus on the hospital operator. She urged Healthscope to “listen to the Northern Beaches community and prioritise the needs and wellbeing of patients and reach an agreement now.”
The impasse has led the Commonwealth Ombudsman to arrange a mediation session between Healthscope and ASHA next week, on 18 February.
On Monday, 10 February, Andrew Sando, CEO, AHSA, confirmed to Manly Observer they had “agreed to meet with the Ombudsman and Healthscope in the coming weeks, and are hopeful that we can reach a positive outcome. We remain committed to the values of affordability, accessibility and quality.”
Who’s the bad guy here?
That, of course, depends on who you ask.
In short, everything costs more, but no one seems willing or able to pay for it.
Healthscope argued that the private health insurers are not paying enough to cover the costs of private medical care. Healthscope reported losses in the last financial year and there have been increases in the costs of healthcare services, and projected increases in staff costs.
But AHSA CEO, Andrew Sando, said they should not be forced to “fund the profits of one of the world’s largest alternative investment management companies, which, in 2023, had net income of US$5.1billion.”
AHSA said the initial dispute erupted after the hospitals (via Healthscope) demanded health funds pay an additional out-of-pocket Hospital Facility Fee.
“Healthscope is driven by one thing – maximising returns for their investors, regardless of the impact upon the Australian private health care system,” Mr Sando added.
“Gouging the Australian public to generate profits for their private equity owners is not in the national interest, and flies in the face of compassionate, equitable and sustainable healthcare.”
“If the member-owned and not-for-profit insurers are forced to pay more to Healthscope to improve the profit of its Canadian private equity owners, then it inevitably stands that premium prices will be impacted, further compounding the cost-of-living pressures facing ordinary Australians.”
“Gouging the Australian public to generate profits for their private equity owners is not in the national interest, and flies in the face of compassionate, equitable and sustainable healthcare.”
But Healthscope said the insurers are “refusing to fairly and sustainably fund the care we provide for their members now and into the future.”
“In an environment of rising costs and private hospital closures, it is simply unacceptable for health insurers to fail at their core purpose – sustainably funding the care of their members. We also stand ready to reach an agreement with [them].”
Healthscope CEO Greg Horan said, “Consumers pay their insurance premiums with the expectation they will have access to privately funded care at their local private hospital. Without hospitals, the private insurance that 46 per cent of all Australians pay handsomely for is virtually worthless.”
Just sort it out
The Australian Medical Association has urged for both parties to “immediately resolve their respective funding disputes for the sake of patients.”
AMA President, Dr Danielle McMullen, said these kinds of disputes cause mass confusion for patients, who start questioning whether they need to change health funds or seek care at a different hospital.
“This places doctors in difficult positions as their patients start asking them for advice on switching funds — but our focus as a profession is on providing the best possible clinical care, not becoming de facto financial advisors,” she said.
Dr McMullen said the latest developments reinforced the need for a Private Health System Authority.
“These kinds of disputes seem to be breaking out more frequently, much to the annoyance of policy holders who need care, and doctors who just want to get on with the job of providing that care,” Dr McMullen said.
“An independent authority can drive long-term reform and ensure the sector is appropriately regulated, ensuring patients get real value for money from their private health insurance.”
In the meantime, the AMA urged all parties to strike a deal that puts the needs of patients first, while also delivering a reasonable return for all parties and recognising the rising costs of providing quality care.
You can learn more about how this affects you at Northern Beaches Hospital here.
Is your health insurer affected? A few need to knows
As at 11 February, the following information is correct:
Admissions between now and 4 March 2025
Patients are covered by the current agreement if they are admitted into a Healthscope hospital between now and 4th March 2025 and will not face any additional out-of-pocket expenses (and are covered through to their discharge date).
Admissions from 4 March 2025
For patients admitted into a Healthscope hospital from 4th March 2025, note that there are a number of transitional arrangements in place.
Patients admitted for the following admission types will not face any additional out-of-pocket costs, see table below:
| Admission Type | Duration |
| Emergency | 3 months |
| Pre-bookings (non-pregnancy and birth) | 6 months |
| Pre-booked maternity | 9 months |
| Course of treatment (eg. Chemotherapy and renal dialysis) | 6 months |
For any other admission, patients may experience additional out-of-pocket costs as determined by Healthscope from 4 March 2025.
It is important that patients speak directly with their fund should they have any queries in relation to this information.
