Cash-grab and penny pinching: Insults fly between Healthscope and HCF

Not-for-profit health insurer HCF is returning $130m of pandemic savings back to members and Healthscope wants a bit of the action as funding talks stall.

It’s claimed HCF members will be left $1000 more out of pocket if they are treated at one of Healthscope’s hospitals.

Negotiations between HCF and one of the country’s largest hospital operators, Healthscope, have dramatically soured as the two companies trade barbs about which most cared for customers.

Healthscope, which operates a string of private hospitals, has accused HCF of not being “equally as willing” to fund care after the insurer returned $130m to members as part of a commitment to hand back savings made during the Covid-19 pandemic.

The return of funds comes after discussions between the not-for-profit fund and the hospital operator broke down, with Healthscope warning HCF members they would be forced to pay higher out-of-pocket costs if they were treated at its facilities.

“While we applaud HCF’s willingness to return funds to their members, it’s disappointing that they are not equally as willing to properly fund the cost of providing hospital care for those same members at Healthscope hospitals,” a spokesman said.

HCF bridled at the criticism over it returning cash to members while being locked in a stalemate with Healthscope – saying the move was “completely unrelated” – and the Brookfield-owned hospital operator was engaging in an “obvious cash grab”.

“This is a prime example of Healthscope’s ‘profits before patients’ approach, while HCF works hard as a not-for-profit health insurer to provide the best value we can for our members,” an HCF spokesman said.

“Healthscope is asking us to pay them for services they did not provide HCF members during a time when access … treatment was restricted; (it) is an obvious cash grab which was a strong theme of their negotiations.”

HCF estimates that if it fails to salvage its deal with Healthscope, its members will be forced to pay an extra $1000 on average if they are treated at one of the company’s hospitals from January 31.

Health insurers have saved $2.25bn in claims that have not materialised from pandemic-­related restrictions, particularly on elective surgery. About $2.1bn of these savings have so far been returned to policyholders, but hospitals have also asked for increased funding.

“The sector has also had to deal with Covid-related increases in operating costs in the order of 5 to 10 per cent – remembering that the average margin in ‘normal’ times is just 4.5 per cent,” the Australian Private Hospitals Association wrote in its federal budget submission this year.

“The ongoing viability of the private hospital sector will be essential in addressing the significant backlog in essential elective surgery that has developed in both the public and private sectors over the last two years.

This has set the scene for fierce negotiations when agreements between hospital and funds expire. Ramsay and Bupa was the first high-profile dispute, after the ASX-listed hospital giant terminated its agreement with the insurance giant this year.

However, the pair managed to renew their agreement before its expiry in August.