US-style managed healthcare given green light by Australian consumer watchdog

US-style managed healthcare has been given the green light by the consumer watchdog, and Australia’s peak medical body fears patients could lose out.

Exclusive: Life-saving healthcare could be denied by health funds and patients could face higher medical bills, as insurers move to an Americanised system.

In a controversial move, the consumer watchdog has greenlighted a new health services buying group that doctors claim will allow health insurers — instead of trained medical professionals — dictate what care a patient receives.

Health fund Nib has won ACCC approval to join with US managed care behemoth Cigna Corporation to set up a health services buying group called Honeysuckle Health.

Honeysuckle Health wants to negotiate contracts on behalf of 31 of the nation’s 35 health funds.

If it is allowed it would mean 31 health funds would all pay the exact same rebate to every doctor, private hospital, physiotherapist, dentist, optometrist and other providers.

The ACCC has given the go-ahead to the project for five years even though the vast majority of the submissions it received on the issue opposed the new buying group.

ACCC Chairman Rod Sims. Picture: Jonathan Ng

Health fund lobby group Member’s Health told the ACCC that in December, 2007 Cigna had refused to pay for a liver transplant of a California teenager, on the grounds the procedure was experimental.

There was a liver ready and waiting to be transplanted and doctors estimated the teen had a 65 per cent chance of surviving at least six months. Cigna ultimately reversed its decision but the girl died awaiting the transplant.

Member’s Health also told the ACCC the California Nurses Association determined that Cigna denies roughly 39.6 per cent of all insurance claims.

USA Leukaemia sufferer Nataline Sarkisyan died while waiting for a liver transplant. Her family blames insurance company Cigna because they earlier denied her the much-needed operation.

Health fund nib already pays the least for 12 of the 19 most common hospital procedures yet it charges the highest premiums of all the major funds for its Gold hospital cover.

The Council of Procedural Specialists spokesman Associate Professor David Scott told the ACCC Honeysuckle Health “will give health funds monopoly power” and there is “no evidence” any savings will be passed on to consumers.

“In a managed care environment the insurer will say, maybe your symptoms don’t reach the threshold for that joint replacement, or, they may say you have to go to a certain small hospital, they may determine that you have to go and see a particular specialist,” Australian Medical Association president Dr Omar Khorshid said.

It was possible patients with complex conditions would not get covered at all and be pushed back to the public system, or, they would face huge gap fees because doctors could not deliver the care they needed within the budget provided by the health funds.

Nib CEO Mark Fitzgibbon said criticism from the medical profession “is simply not accurate”.

“Honeysuckle Health has no intention to ever interfere in the clinical autonomy of doctors, rather provide optional tools and services to enhance the care they already provide,” he said.

“Members will still have their choice of doctor or specialist however, it should once these models are working, result in better healthcare outcomes and lower costs. Any savings will be passed onto members in the form of lower than otherwise premiums.”

Originally published as US-style managed healthcare given green light by Australian consumer watchdog