Health insurers accused of hijacking patient care

The healthcare sector is under intense scrutiny, as the Australian Medical Association (AMA) and Catholic Health Australia (CHA) warn that private health insurers’ growing control over medical centres and hospitals threatens to further erode patient choice and put profits ahead of care.

AMA President, Dr Danielle McMullen, has slammed reports that health insurer Bupa aims to funnel up to 30% of the patients it manages through its own tightly controlled network of facilities.

“We are concerned Australia is hurtling towards a US-style system of vertically integrated managed care, where health funds have too much say over the clinical care that patients receive,” Dr McMullen said.

Bupa’s expansion plans are no minor tweaks. They include 130 new medical centres and 60 in-house mental health clinics, intensifying concerns over managed care.

Dr Katharine Bassett, Director of Health Policy at Catholic Health Australia, was equally blunt.

“Insurers gaining more control of our health system is unlikely to be in the best interests of patients,” she said. “The more control insurers gain, the greater the risk that patients will be limited to the doctors and treatments their insurer approves – rather than the care they truly need. This would be a dangerous shift toward a US-style managed care model that puts profits ahead of patients.”

In a bid to downplay the criticisms, Private Healthcare Australia CEO Dr Rachel David claimed via social media that “there is no risk of a US-style health system in Australia. Under Medicare and health insurance legislation, ‘managed care’ is illegal here.”

Yet, frontline professionals aren’t convinced, and they’re pushing back. One GP pointed out that regardless of legislative semantics, health insurers already dictate care through their control of reimbursable “items. So perhaps not managed care, perhaps more so manipulated cover…?”

A specialist revealed ongoing frustrations with one of the major insurers, saying “Having contacted [the insurer] multiple times…and not received payment for service nor any response to my formal complaint, I’ll be escalating the complaint to the Ombudsman. If insurers did what is required of them by law they’d have better reputations, and receive fewer complaints.”

Another shared a personal account of health insurance denial, stating “The private health fund told a family member that robotic surgery for prostatectomy was a choice, and they wouldn’t cover it.”

“The conflict of interest in an insurer both funding and delivering care is incredibly obvious – and while these insurers will use spin to explain away these concerns, it is vital the new government moves quickly to address this, including through the establishment of a private health system authority to oversee the sector,” Dr McMullen said.

“Patients should be very worried when private health insurers are setting up an environment where they are potentially able to access more information than ever before about a patient’s health and interfere with decisions that should be made by a patient after talking with their doctor in the safety of a private consultation.”

And it’s not just Bupa. The floodgates are open.

While Bupa already owns 180 dental clinics, 50 optical stores, and 22 medical centres in Australia, Medibank is fast catching up, with its subsidiary Amplar Health holding a 90% stake in Myhealth Medical Group and expanding into mental health, chronic disease, and “virtual” hospitals.

Meanwhile, nib has partnered with Honeysuckle Health – a joint venture between nib and Cigna – offering mental health and chronic disease rehabilitation services to nib members. The insurer also has agreements with Bupa to provide the chronic disease rehabilitation services.

“Health insurers owning hospitals and medical clinics is already reshaping the healthcare landscape – undermining patient choice, threatening quality of care, and impacting the clinical autonomy of healthcare professionals,” Dr Bassett said, adding that the U.S. experience with vertical integration has led to “higher premiums, reduced provider earnings, and compromised patient care quality.”

The red flags don’t end there. The AMA is alarmed by Bupa’s plan to offer whole genome sequencing to select customers – a move that could quietly subvert existing laws.

“Patient gene information is not to be taken lightly, and it is too risky to give this to insurers, who could use it to quietly bypass existing community-rating legislation that requires private health insurers to charge Australians the same price for any given private health insurance product, irrespective of their medical risk,” Dr McMullen warned.

“While the federal government has promised to pass legislation that would ban the use of adverse genetic test results in life insurance underwriting, this has yet to happen.”

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