Private Hospital patients face costly decision as Ramsay Health duels with Bupa over contract

Cairns Private Hospital is facing a showdown with a major health insurance company over rising costs. WHAT IT MEANS FOR YOU

UP to a third of people receiving care at Cairns Private Hospital could face a major private health insurance dilemma from August.

A duel between Ramsay Health Care Australia, owner of Cairns Private Hospital, and Bupa, Australia’s second largest private health insurer by market share, over indexation, the amount paid by an insurer to a healthcare provider to cover the cost of treatment, could see contract cessation from August 02, 2022.

If this happens, Bupa customers will need to decide whether to change insurers or pay additional gap fees, currently undisclosed, if they wish to continue treatment at Cairns Private Hospital.

Cairns Private Hospital CEO Ben Tooth said the amount of PPE worn by staff during Covid, additional infection control measures and additional staff training drove up the cost of treatment at his hospital.

“Over the last couple of years we’ve been doing an incredible job looking after patients and the community in a very difficult environment with the pandemic,” he said.

“Wage costs are increasing, supply costs are increasing, infection control measures are increasing. What we’re disappointed by is that Bupa hasn’t recognised the additional work and additional cost to provide safe, high-quality care.

“While we’re mostly through the pandemic, the risks are still there. We need to ensure those high level infection control measures are still in place.”

Mr Tooth said Ramsay Health Care was trying to reach agreement with Bupa.

“We’re hoping there will be a change of heart,” he said.

“But there is a risk that won’t occur. Therefore, we’re recommending that all customers review their options for health insurance at the moment.”

Susan Hurlock, an orthopaedic patient at Cairns Private Hospital, is one Bupa customer considering a switch to another insurer because of this announcement.

Ms Hurlock foresees months of ongoing rehabilitation to recover from a knee operation and said Bupa wouldn’t cover all of her costs. She said now was not the time for her to be uncertain about health insurance.

“I was very disappointed. I’m seriously thinking of switching to HCF because it’s what I’ve been recommended from a few different people,” she said.

Ms Hurlock said she tried to contact Bupa to obtain more information but was not given any assistance.

Bupa recorded an “underlying profit” of $407m in FY2021, a 69 per cent growth on FY2020. Picture: David Geraghty / The Australian.

Bupa Asia Pacific announced an underlying profit of $407m for FY2021, an increase of 69% on FY2020, attributable in part to financial hardship relief offered by Bupa during the Covid pandemic.

Chris Carroll, Managing Director Bupa Health Insurance, said Bupa does acknowledge increased costs in hospitals and Ramsay Health Care needs to take into account cost of living pressures and work with Bupa to keep private healthcare affordable.

“It’s our job to keep premiums as low as possible without compromising on the choice that comes with private health insurance,” he said.

“The reality is private health insurers and our customers cannot absorb high rate increases. This could force some people out of private healthcare putting pressure on public hospital waiting lists.

Chris Carroll, Managing Director Bupa Private Health Insurance. Photo: supplied

“The important thing for customers is they continue to be covered. If you’re booked in for an operation between now and August 2, nothing will change. For some patients, such as obstetrics and neonatal, oncology and renal conditions, they will have the same cover they have now for up to one year later, depending on their condition.

“Even if we end up out of contract with Ramsay, Bupa has made the decision to continue to pay the same rates as our current contract.

“We continue to negotiate with Ramsay and want to find an outcome that strikes a fair and reasonable balance.”

The Private Health Insurance Act includes portability rules that protect consumers who choose to change health insurers.

This means people who switch insurers due to this announcement will not have to wait normal waiting periods before benefits can be paid to them by their new insurer.

Mr Tooth said that Ramsay Health Care had agreements in place with all other health insurers. Therefore, this tussle with Bupa is not going to impact any other customers.

Mr Tooth also confirmed the potential contract cessation would not affect staffing levels in Cairns Private Hospital.

Originally published as Private Hospital patients face costly decision as Ramsay Health duels with Bupa over contract