AMA report finds health insurers' push for vertical integration threatens patient care

Friday 6 October 2023

AMA report finds health insurers' push for vertical integration
threatens patient care
Australia could be heading towards a US-style managed care health system if health insurance companies continue
their push for vertical integration, according to a new report from the Australian Medical Association (AMA).

The 'Out-of-hospital models of care in the private system' report released today, says private health insurers push
for vertical integration – where they pay for and provide health services – could be pushing patients into receiving
services which may not be in their best interests.

The report says the insurers' efforts to take greater control of treatment costs risks 'the principles of patient choice
and clinical autonomy' with concerning examples of health insurers offering psychiatric patients out of hospital care
provided by the insurer, without the involvement of the treating psychiatrist or General Practitioner.

The report also raises concerns about private hospital patients' ability to access out of hospital care because health
insurance companies often refuse to pay for these services if they are provided by a private hospital.

Australian Private Hospital Association (APHA) CEO Michael Roff says private hospitals are willing and able to offer
innovative programs for out of hospital care, but they are often only funded by one insurer, meaning not all patients
have access to them.

"The AMA report suggests about 40 percent of patients are missing out on access to these services, in large part
because the funding models don't support the innovation we know exists in the private hospital sector. It also
highlights the danger that the vertical integration push is leading to outcomes that are not in patients' best interests.

"There is also a genuine threat to clinical autonomy that could have further adverse consequences for patients," he
said.

Mr Roff said he is pleased the AMA is supporting APHA's longstanding call to introduce contestability into the market
by introducing a minimum guaranteed payment scheme that ensures private health insurers pay for any out-ofhospital service chosen by the medical practitioner.

"APHA has long campaigned for a default benefit on out of hospital services. We agree that this is an important
measure to allow private hospital patients to access services no matter who their insurer is. The APHA called for this
change in its submission to the Government's review of default benefits.

"It is quite obvious that if a private hospital is allowed to provide out of hospital services to patients following an
episode of hospital care then continuity of care, quality of outcomes and patient satisfaction will improve.

Unfortunately, some health insurance companies appear more focused on their own bottom line than meeting the
needs of their members.

Level 3 /11 National Circ, Barton ACT 2600. PO Box 4502, Kingston ACT 2604. [T] 02 6273 9000 [F] 02 6273 7000
[E] [W] www.apha.org.au [FB] ValuingPrivateHospitals [Twitter] @priv8hospitals
ABN 82 008 623 809

"The report also highlights the need for the introduction of some important principles around quality and safety,
patient protection, patient choice and clinical autonomy into the system which we support wholeheartedly.

"APHA welcomes this report and looks forward to further discussion about some of the important issues raised
within it," he said.

-ENDSMedia contact: Frith Rayner, Director Communications and Marketing, 0413 971 999

Level 3 /11 National Circ, Barton ACT 2600. PO Box 4502, Kingston ACT 2604. [T] 02 6273 9000 [F] 02 6273 7000
[E] [W] www.apha.org.au [FB] ValuingPrivateHospitals [Twitter] @priv8hospitals
ABN 82 008 623 809

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