Bupa and Healthscope end battle over hospital payments, meaning no gap fees for stays

More than four million Bupa customers can continue to use Healthscope hospitals with no gap fee after the companies ended a months-long stand off. But others aren’t so lucky.

The battle over fees for hospital stays between Bupa and Healthscope has ended.

Millions of Bupa customers will avoid incurring gap fees for stays at Healthscope hospitals after the two companies ended their months-long war over payments.

But more than two million people insured by the 26 small to medium-sized private funds which come under the Australian Health Services Alliance still remain on the outer, with an agreement announced on Friday only relating to Bupa.

Healthscope broke its contracts with Bupa and the AHSA funds in November, saying they were failing to adequately cover costs for hospital stays.

This would have meant that, in the absence of a new deal, patients would have had to pay more for stays in Healthscope hospitals from March 4, compared with no out of pocket fees currently.

Bupa has 4.1 million health insurance members and the AHSA members collectively cover more than 2.5 million people.

Healthscope chief executive officer Greg Horan said at the time that Bupa and the AHSA funds’ refusal to sustainably fund hospitals in a high-cost environment left Healthscope no option but to end the contracts.

It came after Healthscope in October proposed a fee to help bridge the gap between what it says is the chronic underfunding from these insurers and the rising costs of providing high quality care.

Healthscope operates 40 hospitals and clinics across Australia.

On Friday Bupa announced that the stand off was over, with a two year “in principle” agreement struck between the two companies.

Bupa Health Insurance acting managing director Kate Williams said the agreement confirmed both companies' shared commitment to work collaboratively to deliver affordable, high-quality care for their shared patients.

“We understand this may have caused our customers some uncertainty while we were working towards an agreement, and I want to thank them for their patience and understanding during the past few months,” Ms Williams said.

“Our priority throughout negotiations has been ensuring private health remains affordable for our customers while also acknowledging the cost pressures hospitals are facing, and supporting Healthscope to continue to deliver high-quality care, in a sustainable way.’’

Healthscope chief commercial officer Dhruv Gupta said the new agreement “gives certainty

to our staff, doctors and Bupa customers, while also acknowledging the financial challenges

facing private hospitals’’.

“This new agreement means we can continue to care for Bupa members in our hospitals

across Australia, without the need for additional fees,’’ he said.

“We look forward to continuing our partnership with Bupa, working constructively together to deliver outstanding and efficient patient care, and collaborating on initiatives to support the long-term sustainability of the sector.”

“It’s disappointing that the AHSA has so far declined to recognise and address the

increasing costs of providing private hospital care for their members.

“Nevertheless, we remain ready to work with the AHSA, to reach an agreement that

acknowledges the vast funding gap that currently exists.’’

The termination of the AHSA contract will come into force on March 4.

Originally published as Bupa and Healthscope end battle over hospital payments, meaning no gap fees for stays