NIB boss flags retirement while St Vincent’s funding agreement stoush plays out

Mark Fitzgibbon has announced his intention to retire in the middle of a fight with hospital group St Vincent’s, which says it is walking away from their funding agreement.

NIB managing director Mark Fitzgibbon will retire at the start of September.

NIB’s long-time managing director Mark Fitzgibbon has announced his intention to retire in the midst of a crucial stoush with private hospital group St Vincent’s, which has warned it will walk away from their payments deal.

Mr Fitzgibbon has told the ASX he will provide notice of his retirement some time from September 1, which is a month before the October 3 date St Vincent’s has given as the deadline for a better deal to be struck between the provider and the insurer.

St Vincent’s – which operates 10 private hospitals in NSW, Victoria and Queensland – gave NIB notice in early July that it was prepared to walk away from their funding agreement, saying, “NIB has not put a fair offer on the table and has closed the door on any reasonable proposal from St Vincent’s”.

“Unless a new funding agreement is reached within the notice period, St Vincent’s will end its contract with nib in early October (final day of notice period – Thursday, 3 October).

“This means that, after this date – unless an agreement is reached in the meantime – patients who use NIB for their private health insurance may be required to contribute more to the cost of their care when using a St Vincent’s private hospital.”

St Vincent’s chief executive Chris Blake said there was “a crisis in private healthcare in Australia” with private hospitals not being paid enough by insurers to remain viable.

This had led to more than 70 private hospitals closing over the past five years, he said.

NIB shares were 2.5 per cent down at $7.05 in a higher market on Monday morning.

Mr Fitzgibbon, who is 64 years old, started at NIB in October 2002 as chief executive and led the organisation through its demutualisation and 2007 listing on the ASX.

He flagged two years ago that the company had succession plans under consideration, while not forecasting when he would retire.

He will be replaced by Ed Close, who is currently chief executive of NIB’s Australian Residents Health Insurance (arhi) business.

Mr Close is expected to move into the top job before the end of the calendar year following a handover period with Mr Fitzgibbon.

NIB chair David Gordon said Mr Fitzgibbon had been a “tremendous” leader and had made an extraordinary contribution to the Australian healthcare sector.

“From modest beginnings in 1952, today NIB provides more than 1.6 million Australian and New Zealand residents with private health insurance; it looks after the health and wellbeing needs of more than 200,000 international students and workers,’’ Mr Gordon said.

“NIB is Australia’s third-largest travel insurer, a 24-7 global business; and it helps around 40,000 participants in Australia’s disability sector.

“For the last 22 years, Mark has been at the helm of a company that has undergone a remarkable transformation, and that transformation is a great credit to his leadership.”

Mr Gordon said he was “delighted” with Mr Close’s appointment and said he was an exceptional leader.

“Ed has deep insights into the way NIB can continue to help shape the future of healthcare in Australia, and he has the support of NIB’s senior executive team and the board to achieve that,” he said.

“We look forward to working with him.”

Mr Close will be paid a base salary of $1.05m, compared with Mr Fitzgibbon’s base salary last financial year of $1.25m.

He will be able to earn up to 150 per cent of his base salary in short term incentives and another 125 per cent in long term incentives for a total possible salary package of $3.94m.

Mr Fitzgibbon owns 2.62 million NIB shares and 925,425 performance rights which will vest in 2026.

NIB will announce its results on August 24.

Originally published as NIB boss flags retirement while St Vincent’s funding agreement stoush plays out