00:00With many private hospitals under increasing strain, the peak body has written a letter
00:06to Prime Minister Anthony Albanese pointing the letter at insurers and calling for a voluntary
00:12code of conduct to be made mandatory.
00:15In the letter, the Australian Private Hospitals Association's Chief Executive Brett Heffernan
00:20argues that many private hospitals are on the brink of collapse, with the folding of
00:25health scope and about 70 other smaller operations nationally since 2020.
00:30And he leaves much of the blame at the feet of private health insurers, detailing a raft
00:36of allegations about their conduct, including that alleging that private insurers are misusing
00:42their market power by issuing contracts that leave no room for negotiation, and also saying
00:47that insurers effectively are delaying entering new contracts with hospitals, so they're
00:53forced to run on previously agreed lower prices.
00:57Take a listen to the Australian Private Hospitals Association's Chief Executive Brett Heffernan.
01:03People with private health insurance are getting less for their money year on, year out.
01:08They're getting less choice, less access, and quality is being compromised, and that means
01:14that your insurance dollars aren't going as far as they should.
01:18The industry's peak body, Private Healthcare Australia, says that there's already a voluntary
01:23code of conduct that's overseen by the ACCC and the Commonwealth Ombudsman, and when it
01:29comes to those allegations of anti-competitive contracting processes, Private Healthcare Australia
01:35CEO Rachel David says they're simply not true.
01:38Take a listen.
01:39And the contracting process puts a bit of friction in the sector to keep downward pressure on
01:47premiums and keep them affordable for consumers.
01:50That's not to say the contracting process is foolproof.
01:55So the federal government's actually reviewing it formally, and there's a collaborative group
02:00with private hospitals and private health insurers called the CEO Forum, which is currently
02:06reviewing the contracting process.
02:08It's been in place for a few decades now, and I think it is ripe for an overhaul, but
02:13I would utterly reject those comments about take it or leave it contracts.
02:17There's tough behaviour on both sides.
02:20With private hospitals declaring the multi-billion dollar sectors at a crunch point, the federal
02:25government last year took the unusual step of asking them to open up their books so it
02:30could try to see what's going on, what's leading to these issues.
02:34But getting to the bottom of the problem has been made more complicated by claims and blame
02:39on both sides that the other isn't being transparent.
02:44And I spoke to an expert, the Grattan Institute's health program director, Peter Brayden, who said
02:48that this relationship has turned toxic and unless something is done, this fighting will continue.
02:53In a statement, a spokesperson for Health Minister Mark Butler said a forum had been comprised
02:59of stakeholders and experts to try to get to the bottom of this issue, to try to improve
03:04the financial viability of the sector, and that as part of that they would look at whether
03:09regulation was fit for purpose.
03:11The spokesperson said while the Health Minister reserves the right to intervene in the regulatory
03:16process if he deems it necessary, his clear preference is for those who have a stake in this sector
03:23to come up with a workable solution themselves.
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