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News & Trends - Medical Technology

Is Australia sleepwalking into a managed care ecosystem?

Health Industry Hub | August 5, 2022 |
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MedTech News: Despite widespread opposition to managed care in Australia, the first ACCC-approved healthcare buying group has cleared the final hurdle to get a foothold in the healthcare ecosystem.

The approval for Honeysuckle Health (acting as an agent for nib health fund) from the Australian Competition and Consumer Commission (ACCC), was delayed after two groups lodged an application for review through the Australian Competition Tribunal.  

The Rehabilitation Medicine Society of Australia and New Zealand (RMSANZ) and the National Association of Practising Psychiatrists (NAPP) withdrew their applications for review last week, after a mutually agreed deed of settlement was reached. The Australian Medical Association (AMA) had joined the proceedings as an interested party.  

The AMA made multiple submissions to the ACCC expressing concern at the level of market power that would flow from including the major private health insurers in the Honeysuckle Health Buying Group and its opinion on the public detriment that would result.

The ACCC imposed significant conditions on the proposed Honeysuckle Health’s buying group, excluding the major private health insurers from participation, and limiting the authorisation to five years. 

Rhod McKensey, CEO of Honeysuckle Health, said “I’m pleased to announce that after what has turned out to be a slower than expected start, Honeysuckle Health’s ACCC authorisation is now a-foot to allow us to establish a health services buying group that will serve private and public healthcare payers. This is the first such group authorised in Australia by the ACCC. This is an important milestone in Honeysuckle Health’s journey to deliver better health outcomes and better value for consumers. We look forward to working collaboratively with the provider community in creating better pathways to better health.”

Honeysuckle Health will have the power, for example, to create an agreement through their clinical partners program (a carry-over from nib) with a group of orthopaedic surgeons.

In exchange for a slightly higher fee than the normal no-gap nib payment, these surgeons would agree to never charge a nib client any out-of-pocket costs for something like a hip replacement and commit to working with an anaesthetist who agrees to do the same.

Former AMA President Dr Omar Khorshid had criticised the ACCC’s decision to authorise the proposed buying group.

He said “Insurers want to exercise greater control over the care that patients receive and this is a recipe for less choice and inferior care in the long term. A GP referring a patient privately under these circumstances may be frustrated and concerned that their patient’s choice and improved access to care – the very reasons for their cover – will be constrained by the ‘straitjacket’ created by these arrangements.”

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