‘No cover’: Contract between UnitingCare Queensland hospitals and 20 health funds collapses

Up to 2.5 million health fund members may no longer be able to use their hospital cover amid a deepening crisis over the viability of private hospitals around the nation.

The Wesley Hospital in Brisbane. Picture: Mark Cranitch

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UnitingCare Queensland has terminated its agreement with more than 20 private health funds, meaning 2.5 million fund members may no longer be able to use their hospital cover at the Wesley Hospital in Brisbane and other private hospitals in the state.

The collapse of negotiations between UnitingCare Queensland and the Australian Health Service Alliance comes amid a deepening crisis over the viability of private hospitals around the nation, with the health insurance industry facing the prospect of unprecedented government inter­ven­tion in its contracting with ­hospitals.

UnitingCare said it had been unable to reach an agreement with the AHSA after six months of negotiations and its contract would terminate on November 21.

UnitingCare chief executive Craig Barke said he was “disappointed to have reached this point in negotiations” and “the decision to terminate our contract has been a difficult one”.

“Like all private hospitals, we are facing increased costs in areas including wages, technology, food, energy and maintenance,” Mr Barke said.

“Now more than ever, we need to ensure our sustainability so we can continue to provide high-quality care for our patients.”

UnitingCare said it had never before issued a notice of termination and maintained agreements with all other major Australian health insurers.

UnitingCare would continue negotiations throughout the termination period in the hope of reaching agreement, Mr Barke said, but if it was unable to do so, “additional out-of-pocket costs will apply for patients of AHSA member funds when attending a UnitingCare Hospital”.

The affected hospitals are the Wesley Hospital and St Andrew’s War Memorial Hospital in Brisbane, Buderim Private Hospital on the Sunshine Coast and St Stephen’s Hospital in Hervey Bay.

St Andrew’s War Memorial Hospital in Brisbane. Picture: Mark Cranitch

AHSA chief executive Andrew Sando said UnitingCare had demanded a 10 per cent increase each year over the next two years and that it was “extremely disappointing” that UnitingCare had terminated the agreement.

“We understand the pressures that private hospitals are under and have worked to balance their needs while being conscious of the potential impact on premiums that private health insurance members pay, remembering the funds we represent are not-for-profit and member-owned,” Mr Sando said. He said the Health Minister approved industry-wide average premium increases of 3.03 per cent earlier this year.

The AHSA represents not-for-profit and member-owned private health insurers including Australian Unity Health, Defence Health, Teachers Health and HBF, covering 20 per cent of the 15 million Australians who have private health cover.

Mr Sando accused Uniting­Care of “disregarding the current cost-of-living pressures felt by the majority of Australians” and warned that when the termination came into effect in November, policy holders could face “significant” out-of-pocket expenses.

“Of course, patients have the option to go to any of the other 500 private hospitals we have contracts with,” Mr Sando added.

“We ideally want an agreement with UnitingCare (Qld), but it cannot be at any cost. We are not unsympathetic to private hospitals’ requests because we want our members and their doctors to have access to quality private services. But we must ensure private health insurance remains affordable for the majority of people.”

Health Minister Mark Butler has ordered an urgent review into the viability of the nations’ more than 600 private hospitals, with concerns an increasing number of closures will force patients into the already overburdened public ­system. Private hospitals provide one-third of all hospital admissions and 60 per cent of all surgery nationwide.

Uniting Care chief executive Craig Barke.

Last week, St Vincent’s Health Australia, the country’s largest not-for-profit health and aged care services provider, brokered a new funding agreement with health insurance giant NIB, averting a major crisis after earlier threatening to walk away from ­negotiations.

That move would have left the health fund’s 1.3 million members unable to use their policy to cover the costs of surgery at 10 private hospitals that are operated by St Vincent’s.

UnitingCare said patients of AHSA member funds who are ­currently being treated at UnitingCare hospitals and those booked before November 21 will not immediately be affected.

“The decision to terminate our contract has been a difficult one,” Mr Barke said.

“But we require funding agreements which financially support innovative care in our hospitals and return patients to their homes as soon as clinically appropriate.

“It is openly recognised that the pressures on our industry are significant and, like all private hospitals, we are facing increased costs in areas including wages, technology, food, energy and maintenance.”