The country’s second-biggest hospital operator, Healthscope, has agreed a new funding deal with a group of not-for-profit insurers, ending a long-running dispute with health funds that will spare thousands of patients from paying higher hospital fees.

The group of 29 non-profit insurers known as the Australian Health Service Alliance had been holding out against Healthscope’s demands for more funding and risked going out of contract with the hospital operator meaning its members would pay more out-of-pocket costs for treatment.