The agreement follows a period of negotiations between the two organisations amid broader discussions on private hospital funding and patient costs, with nearly one in four Australians taking out hospital insurance mainly to avoid the Medicare Levy Surcharge (MLS).
Bupa Health Insurance acting managing director Kate Williams said the agreement aligns with both organisations’ efforts to balance affordability and service quality in the private healthcare sector.
“We understand this may have caused our customers some uncertainty while we were working towards an agreement, and I want to thank them for their patience and understanding during the past few months,” she said.
She added that Bupa and Healthscope would continue to collaborate on measures aimed at improving healthcare delivery and system efficiency.
Healthscope chief commercial officer Dhruv Gupta said the agreement provides clarity for hospital staff, doctors, and Bupa-insured patients.
“We look forward to continuing our partnership with Bupa, working constructively together to deliver outstanding and efficient patient care, and collaborating on initiatives to support the long-term sustainability of the sector,” he said.
The agreement comes after Healthscope’s October 2024 announcement of a “hospital facility fee” for patients covered by certain health funds.
The fee, introduced on Nov. 26, applies a $50 charge for same-day visits and a $100 fee for overnight stays. Healthscope, owned by North American private equity firm Brookfield, stated that the charges were necessary to address operational cost pressures.
The introduction of the fee drew criticism from industry bodies, including Private Healthcare Australia (PHA), which represents health insurers.
PHA chief executive Rachel David argued that the charges place financial pressure on patients and disrupt existing agreements between insurers and hospitals.
Bupa, one of the major insurers impacted, had raised concerns about the fee’s impact on its members. The health fund engaged in discussions with Healthscope throughout 2024 to negotiate commercial terms that balanced financial sustainability and affordability for patients.
The Australian Medical Association (AMA) also weighed in, calling for regulatory measures to prevent cost disputes between insurers and hospital operators from affecting patient access to care.
AMA president Dr Danielle McMullen said the introduction of facility fees places patients at the centre of commercial disagreements between healthcare providers and insurers. She added that a regulatory framework could provide clearer guidelines for negotiations between health funds and hospitals, ensuring greater transparency in pricing and funding arrangements.
