Healthscope said it had no choice but to terminate its contracts with two insurers after they refused to pay proposed hospital charges.

The terminations will take effect from February 20, 2025 for Bupa and from March 4, 2025 for AHSA funds.

Bupa said the extra charges provided no additional benefit to customers, while Healthscope said it was vital to close the gap between what insurers pay and the rising costs of hospital care.

Healthscope CEO Greg Horan said the hospital provider was forced to terminate its contract with insurers after both threatened legal action to prevent the introduction of new charges.

“Healthscope cares for more than 650,000 patients each year and we are absolutely committed to providing the best care possible. But we can only achieve this if we have adequate funding,” Mr Horan said.

“We were proposing hospital charges following the failure of Bupa and the AHSA to recognize and fairly fund the rising cost of care. In the absence of equitable funding, these fees were Healthscope’s best option.

“The insurers’ response has been legal action, and we are not prepared to engage in lengthy and costly legal proceedings. »

Nick Stone, CEO of Bupa APAC, said the insurance company had worked “tirelessly” to negotiate the fees.

“We are shocked and deeply disappointed by Healthscope’s action. They appear to be ignoring the interests of our mutual patients and customers in seeking to impact their access to health care,” Mr. Stone said.

“We are concerned that Healthscope’s actions will cause undue stress to patients and customers seeking to access private healthcare at a time when we should be working together to build confidence in the private healthcare system and ease pressure on hospitals and their front-line teams.

The AHSA, in a statement titled “Healthscope seeks to line the pockets of private equity owners by announcing plans to terminate deals with 22 nonprofit health insurers,” said it had more than 2 .5 million customers who would be affected by the separation.

Andrew Sando, CEO of AHSA, said Healthscope was driven by maximizing investor returns, rather than Australia’s private health system.

“Exploiting the Australian public to generate profits for its private equity owners is not in the national interest and runs counter to compassionate, equitable and sustainable healthcare,” Mr Sando said.

“It is not clear how and why the Australian government is allowing foreign private investors such as Brookfield to extract more profits from an already financially distressed private health system. »

Healthscope is owned by Canadian private equity group Brookfield and operates 38 private hospitals across Australia.

Dr Rachel David, CEO of Private Healthcare Australia, the leading body for health funds, outlined Healthscope’s plan to charge a hospital fee of $50 for same-day services and $100 for hospital services. night as a “new unethical low”.

“This is yet another unethical tactic by a trillion-dollar North American private equity firm that appears to want to hold health plan members hostage, while also trying to bully health funds into paying them more so they can increase their profits,” Dr David said.

“If Healthscope was serious about providing 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 cradle.

“Health funds have no ability to pay overall increases above inflation to private hospitals. People struggling with the cost of living will simply drop or reduce their health coverage, making Healthscope worse off as its customer base dries up.