First private hospitals operator signs deal with health services buying group

MedTech & Diagnostics News: The nation’s second-largest private hospitals operator, Healthscope, and a joint venture between health insurer nib and US health giant Cigna, Honeysuckle Health, have announced a first-of-its-kind five-year strategic partnership.

According to the organisations, the partnership will deliver simpler and more flexible funding terms and both parties will work together on the rising costs of providing quality private hospital care. Healthscope and Honeysuckle Health will also collaborate on a range of initiatives to drive new, patient-focused models of care and funding.

Honeysuckle Health Chief Executive, Rhod McKensey, said the agreement will deliver benefits for patients, insurer partners and Healthscope hospitals and doctors.

“This agreement represents a step change in the way funders and hospitals can collaborate to improve the private healthcare they offer for all parties,” Mr McKensey said.

“Embedded in the partnership is a commitment to co-develop innovative funding models that address the rising cost of providing quality private health care and ensure ongoing access for health fund members to high-quality care.

“We have been able to collaborate with Healthscope to deliver for our insurer partners innovation opportunities and efficiencies, along with rewards and incentives for improved patient outcomes. Importantly, all of this has been delivered without placing additional pressure on health fund premiums, with nib members the first to benefit from this focus on value.”

The Australian Competition and Consumer Commission (ACCC) authorised the formation of Honeysuckle Health in 2021 to provide collective contracting and related services to private-health-insurers and other healthcare-payers. A consequent legal challenge resulted in a Deed of Settlement on 18 July 2022 that for 5 years preserves doctor-patient autonomy in clinical decision-making, the medical gaps scheme, the transparency of contractual arrangements, and if clinical data of those insured are collected by Honeysuckle Health-nib, it must be with the full informed consent of patients.

Concerns have been raised previously from medical societies regarding the fear of a US style managed-care model. However, in relation to the Healthscope-Honeysuckle Health deal, a spokesperson from Healthscope told Health Industry Hub “There will be no impact at all on doctors’ clinical independence.”

Healthscope Chief Commercial Officer, Jenny Patton, said the Healthscope team looked forward to working with Honeysuckle Health to continue delivering the best possible outcomes for patients in the right setting for each patient.

“In reaching this agreement, we have appreciated Honeysuckle’s understanding of the cost pressures facing private hospitals, including rising interest rates, food, energy and power charges, and a nursing workforce shortage. I’m delighted that we have also been able to agree simpler and more flexible funding terms that remove the administrative and compliance burden from hospitals,” Ms Patton said.

“Through this long-term partnership we have created a care model that will foster innovation, best possible patient care and deliver fair funding.

“As part of the partnership, Healthscope has committed to supporting the expansion of the Honeysuckle Buying Group, and will allow all new insurer participants immediate access to the benefits embedded in the new agreement.”

There remain options for private-health-insurers to apply for formation of new buying-groups, as well as to collect data and profile the general public and insured patients using online programs. Vigilance on private-health-insurer buying-groups, and the potential for US-style managed-care is warranted, according to Associate Professor Jeffrey Looi from the Australian National University.

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