Bupa, Healthscope reach last-minute deal to keep hospitals open
Millions of patients could benefit as Bupa and Healthscope reach a deal at the 11th hour to get patients back into Healthscope hospitals.
A last minute in-principle deal has been struck between health insurer Bupa and hospital provider, Healthscope, meaning patients covered by the insurer will not be left further out of pocket when their contract was due to expire next month.
Last November, Healthscope dramatically announced it would terminate its hospital contract with Bupa on February 20, and with the AHSA on March 4, after both insurers threatened legal action for what they claimed was a breach of contract.
Healthscope is Australia’s second-largest private hospital operator, with 38 facilities across the country. Bupa has 4.1 million clients and the AHSA represents 22 small to medium-sized private health insurance funds.
If the contract did end, patients covered by Bupa would be left to pay more for services at Healthscope facilities. However, in many cases still qualify for what’s known as second-tier default benefits. Under the scheme, patients with private cover can still seek treatment at a hospital where there is no negotiated contract with their health insurer.
The insurer will usually pay a percentage – typically around 85 per cent of the hospital costs – leaving the patient to pay the remainder of the bill.
Today, Bupa Health Insurance Acting Managing Director Kate Williams said the agreement confirmed Bupa and Healthscope’s shared commitment to work collaboratively to deliver affordable, high-quality, and innovative 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.
She also acknowledged private hospitals were facing financial operational pressures.
“Together, we’re committed to improving health outcomes and enhancing patient experiences. We will do this by creating greater system efficiencies, and investing in patient-centred innovations and initiatives that modernise care.”
Healthscope Chief Commercial Officer Dhruv Gupta said the new agreement would provide certainty to patients and staff.
“This new agreement means we can continue to care for Bupa members in our hospitals across Australia, without the need for additional fees. 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.”
Mr Gupta said Healthscope had now reached agreements with four of Australia’s five major
insurance groups – Bupa, Medibank, NIB, HCF.
“Unfortunately, our notice of contract termination with the Australian Health Service Alliance funds remains in place, effective from 4 March 2025.
“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.”
