Healthscope: What insurers and hospitals will be affected by the decision, when does it come into effect?

More than six million Australians are set to be left in an out-of-pocket lurch when the country’s second-biggest private hospital operator tears up its contracts with two health insurers in 2025.

Healthscope announced on Friday it was terminating its contracts with Bupa and the Australian Health Services Alliance (AHSA) — which represents 26 funds — over the insurers’ refusal to pay rising hospital facility fees.

The decision represents a dramatic breakdown in an ongoing battle over who should foot the bill for medical expenses and other operating costs..

Other big hospital operators are also reportedly privately warning they are willing to terminate contracts if insurers don’t help to offset costs, the Australian Financial Review reports.

While Healthscope and the insurers’allies sling accusations of “greed” at one another and the sector reels from the move, more than 6.6 million insurance customers must find answers to a flurry of questions about how it affects their future healthcare.

What is Healthscope and what does it want?

Healthscape, which is owned by Canadian private equity fund Brookfield, operates a network of 38 private hospitals across Australia.

In October, it announced it would charge Bupa or AHSA customers an extra gap fee of $50 for hospital treatments. The fee doubled to $100 for overnight stays.

Healthscope CEO Greg Horan said the “modest” fee would have helped bridge the “chronic underfunding” from insurers and the rising cost of providing care at its facilities.

“The response from the insurers was lawfare, and we are not prepared to engage in protracted and expensive legal challenges,” Mr Horan said.

“In order for us to remain viable, we are left with no choice but to terminate the contracts.

“There is a viability crisis impacting private hospitals across the country. Hospitals are losing money, and cannot attract new investment.”

He accused the private health insurers, singling out Bupa, of “banking record profits ... while refusing to pay fairly for the care of its Australian members at Healthscope hospitals”.

Which insurers are involved?

So far, Healthscope has terminated its two contracts with Bupa and AHSA — which has a network of 27 small and medium-size insurance providers, including Australian Unity HBF and Westfund.

Other AHSA members include Union Health, Navy Health, Teachers Health, Nurses & Midwives Health, Emergency Services Health, Doctors’ Health, and Defence Health.

Bupa accused Healthscope of engaging in “a public scare campaign designed to unsettle patients”.

It said it had made”reasonable offers” of additional funding which Healthscope had rejected.

AHSA, meanwhile, called the move “a disgrace” and accused Healthscope of breaking a new binding services agreement that took effect in March.

Private Health Alliance chief executive Rachel David also attacked the “unethical tactic” and said it was an attempt to hold health members hostage “while also trying to bully health funds into paying them more so they can increase their profits”.

“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,” Dr David said.

All AHSA funds affected:

• Union Health
• Navy Health
• Westfund
• HBF
• HCi
• Uni Health
• Latrobe Health Services
• Queensland Country Health
• Teachers Health
• CBHS Corporate Health
• Phoenix Health Fund
• Territory Health Fund
• Nurses & Midwives Health
• Emergency Services Health
• Peoplecare Health Insurance
• Doctors’ Health
• Health Insurance Fund
• Hunter Health Insurance
• Mildura Health Fund
• Health Partners
• ACA Health
• RT Health
• Police Health
• Defence Health
• Australian Unity
• Reserve Bank Health Society
• TUH

Which hospitals are affected and when?

Healthscare’s deal with Bupa will end on February 20 next year and on March 4 for ASHA funds.

Almost 40 hospitals across Australia will be affected by the termination, including 14 in Victoria, 13 in NSW, and five in Queensland.

Four South Australian hospitals will be affected, and one each in WA, Tasmania and the NT and ACT.

Here is a full list of the affected facilities.

NEW SOUTH WALES

• Campbelltown Private Hospital
• Hunter Valley Private Hospital
• Lady Davidson Private Hospital
• Nepean Private Hospital
• Newcastle Private Hospital
• Northern Beaches Hospital
• Norwest Private Hospital
• Prince of Wales Private Hospital
• Sydney Southwest Private Hospital
• The Hills Private Hospital
• The Sydney Clinic
• Tweed Day Surgery
• Windsor Road Private Clinic

VICTORIA

• Dorset Rehabilitation Centre
• Holmesglen Private Hospital
• John Fawkner Private Hospital
• La Trobe Private Hospital
• Knox Private Hospital
• Melbourne Private Hospital
• North Eastern Rehabilitation Centre
• Northpark Private Hospital
• Rehab at Home
• Ringwood Private Hospital
• The Geelong Clinic
• The Melbourne Clinic
• The Victoria Clinic
• The Victorian Rehabilitation Centre

QUEENSLAND

• Brisbane Private Hospital
• Gold Coast Private Hospital
• Peninsula Private Hospital
• Pine Rivers Private Hospital
• Sunnybank Private Hospital

SOUTH AUSTRALIA

• Ashford Hospital
• Flinders Private Hospital
• Griffith Rehabilitation Hospital
• The Memorial Hospital

WESTERN AUSTRALIA

• Mount Hospital

TASMANIA

• Hobart Private Hospital

AUSTRALIAN CAPITAL TERRITORY

• National Capital Private Hospital

NORTHERN TERRITORY

• Darwin Private Hospital