Healthscope, Australia’s second-largest private hospital operator, will launch a nationwide advertising campaign on Wednesday accusing health insurers of under-funding its hospitals and has refused to rule out walking away from contract negotiations with major funder Bupa.

In a major escalation of hostilities between hospital operators and insurers that potentially affects the medical bills for millions of Australians, Healthscope will blitz radio, print and digital media with a campaign accusing insurers of failing the health system.