Healthscope, Australia’s second-largest private hospital operator, announced it will soon charge a “hospital facility fee” of up to $100 per visit, creating friction with health funds and sparking a strong response from industry bodies.
The fee will apply to patients covered by certain health insurers starting Nov. 26, with charges of $50 for same-day services and $100 for overnight stays, as the hospital operator – owned by North American private equity firm Brookfield – seeks to address financial pressures in its Australian operations.
Private Healthcare Australia (PHA), the industry’s peak body for health insurers, expressed concerns over the fees, which it argued place undue financial pressure on patients.
PHA CEO Rachel David called the fees a “new low” and suggested they could increase profits for Brookfield at the expense of Australians seeking medical care.
“This is a deeply unethical move from a $1 trillion North American private equity firm holding patients hostage and trying to bully health funds into paying them more so they can increase profits,” she said.
She warned that patients might feel pressured to change insurers, adding that targeted health funds already have contracts in place that set terms for funding these services.
“Targeting patients is a new low. I have never seen a hospital group do this before. This will cause great distress and uncertainty for thousands of people trying to plan healthcare across Australia right now,” David said.
PHA expects Healthscope’s move to impact nearly half of Australia’s insured patients, including many covered by major health fund Bupa, which has been vocal about the potential implications for its members.
Bupa’s leadership said it had engaged with Healthscope repeatedly this year in an attempt to reach new commercial terms to support both parties, but reported that these negotiations had not been successful.
“Our members come first. We will always advocate for their best interests by negotiating fair, mutually beneficial, and sustainable contracts with our hospital partners. We have demonstrated this by successfully renewing contracts with a number of other private hospital operators this year,” Bupa said in a statement.
Bupa reminded Healthscope of its current contract, which the health fund said should protect members from unexpected expenses when accessing services.
It is advising its members to verify charges in advance with Healthscope to make informed decisions about costs associated with planned care.
The Australian Medical Association (AMA) joined PHA and Bupa in voicing concerns, noting that patients and healthcare providers alike face uncertainty over this fee increase.
AMA president Dr Danielle McMullen described Healthscope’s decision as putting patients in the middle of commercial disagreements, with limited clarity on what the added costs would mean for their treatment plans.
“Patients are completely innocent bystanders in this unacceptable squabble, as they now face higher out-of-pocket costs imposed by Healthscope from 26 November,” she said.
She added that the ongoing dispute highlights the need for systemic reform, suggesting that a dedicated regulatory body could better manage health fund and hospital relationships to protect patient interests.
