Vertical integration push a bad outcome for patients

Wednesday, 31 May 2023

Vertical integration push a bad outcome for patients
The latest effort by private health insurance organisations to justify their push towards vertical integration is a
distraction from the real work of health care reform that will help patients, says Australian Private Hospitals
Association (APHA) CEO Michael Roff.

Commenting on the release this morning of Private Healthcare Australia's (PHA) report 'There's no place like home:
Reforming out-of-hospital care', Mr Roff said private hospitals welcomed health insurance companies' new desire to
fund out-of-hospital care, but experience shows they can currently do this, they just choose not to.

"The report from the Improved Models of Care Working Group in 2018, which examined how to expand non-hospital
services paid for by health insurance and provided advice about reforms to the Government, found there were no
regulatory barriers to alternatives to traditional in-hospital care," he said.

"However, the experience of private hospitals which have developed innovative, out-of-hospital models of care
focused on the needs of their patients, is overwhelmingly that no private health fund will support them. But while
insurance companies refuse to pay for out of hospital services provided by hospitals, they are quite happy to pay for
similar services they own and operate.

"It appears this report is a shameless attempt for health insurance companies to expand vertical integration, where
they pay themselves for providing services to their members. At the same time, they deny their members choice of
service provider which is one of the key reasons people take out health insurance.

"We have to be careful that the push by insurance companies for "innovative care models" is not about pushing
customers to use services those same companies own. I don't think Australians want a system where patients are
being directed into a particular care pathway because it is in the financial interests of the insurance company rather
than the best clinical interests of the patient."
Mr Roff warned against vertical integration by health insurance companies that went unchecked as it could lead to
the same situation banks found themselves in when they owned wealth management funds.

"The Hayne Royal Commission into the banking sector found that vertical integration by the banks – offered as a
"one stop shop" - was not in the best interests of consumers, and this push by insurers wouldn't be either."
He agreed that Australia could provide more out-of-hospital care and that private hospitals were well placed to
deliver it.

"Private health insurance companies could give their members access to innovative out of hospital care today, they
just choose not to.

"Just as health insurance companies refuse to fund innovative out of hospital services provided by private hospitals,
the report from their lobby group seems to ignore private hospitals as valid providers of these services.

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

"It is frustrating to once again see the health insurance lobby put the financial interests of their member companies
ahead of the interests of the Australians who buy their products to access high quality care," Mr Roff 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

Next Media Centre:
13/6/2023 APHA President Christine Gee awarded AM

Previous Media Centre:
24/5/2023 Private hospital recovery continues but still has some way to go