Healthscope boss Greg Horan accuses major health insurers of bleeding private hospitals dry

Private hospital operator Healthscope has taken aim at major insurers like Bupa, accusing them of bleeding local private hospitals dry.

Launching a nationwide advertising campaign on Wednesday, Healthscope accused Bupa and non-profit insurer Australian Unity of under-funding its 38 hospitals across the country, including 12 in NSW and 13 in Victoria.

Healthscope is the nation’s second-largest private hospital operator.

Healthscope said the insurers were refusing to meet the rising costs of patient care — including cancer treatments, maternity and mental health — while hoarding super profits and surpluses. The campaign blitz will target radio, newspapers and digital media.

Chief executive Greg Horan warned that without improvement to industry funding arrangements, there would be catastrophic impacts to the entire health system.

“Bupa and the Alliance insurers including Australian Unity are bleeding local private hospitals dry,” Mr Horan said.

“If the funding from Bupa and the Alliance health funds like Australian Unity doesn’t cover private hospitals’ costs, further cuts to services, higher out-of-pocket costs for patients or indeed hospital closures will become inevitable.

“This is unsustainable and without urgent action, ordinary Australians will suffer.”

Mr Horan said Bupa paid 81¢ for every dollar it collected for hospital benefits in the 2023 financial year, while Australian Unity paid just 70¢ in the dollar compared with the industry average of 83¢.

But the peak body for health funds hit back to assure that Australians with health insurance will not lose access to private hospitals, despite what it called a “scare campaign” from Healthscope and its private equity owner, Brookfield.

Private Healthcare Australia chief executive Rachel David said the campaign was designed to pressure health insurers and the Federal Government into a bail out, which would drive up the cost of insurance for millions of Australians.

Dr David added while Healthscope was threatening to terminate contracts with some health funds — suggesting it would result in increased costs for patients — insurers would not permit hospitals to charge customers more.

“I want to reassure the 12 million Australians with hospital cover that health funds will not let hospitals in genuine areas of need close,” she said.

“Health funds are helping private hospitals recover from a difficult period, but we will not do anything that unnecessarily drives up the cost of health insurance in a cost-of-living crisis.

“Healthscope is the one threatening to charge consumers more, not health funds. It’s a disgrace they are threatening pregnant women and people with cancer with extra fees.”

Hospital operators have warned they were facing an existential threat because higher costs for medical equipment, supplies, maintenance are surpassing the payments they receive from private health funds.