Government's Private Health CEO Forum flops

WHEN the Albanese Government established its second talkfest to address the viability crisis caused by health insurers underfunding private hospitals, we labelled it "a dud" that was "set up to fail"*. More than two years after this pitiful saga began, the government's CEO Forum has met for the final time under its current terms of reference without yielding a single solution.

"We said the government's CEO Forum was a dud and set up to fail when it was formed in December 2024. Unfortunately, not only has that view not changed, but it has been vindicated," APHA CEO Brett Heffernan lamented today.

"The mail from frustrated participants is the government is set to drag this schmozzle out for another year, but that it will meet just twice over that period. Despite the goodwill of participants, who have no decision-making function but are a sounding board for government, the government continues to stall, obfuscate and avoid taking any action at all."

It has been 25 months since the Federal Government formed its CEO Roundtable, which morphed into the CEO Forum. Its purpose was to develop short and medium-to-long-term options to support the sustainability, viability and affordability of Australia's private healthcare system.

"After more than two years of talking about a crisis that emerged and deepened on the Albanese Government's watch, these government-led talkfests have failed to deliver anything at all," Mr Heffernan said.

"Apparently there are no limits to how far a government can kick the can down the road to avoid decision-making responsibility, despite a crisis it recognised in its November 2024 Private Hospital Viability Health Check. It's a remarkable feat for government to achieve absolutely nothing and avoid scrutiny, despite signing off on annual premium increases for insurance companies.

"It was 18 months ago, when the CEO Forum formed, that the Federal Government pledged a six-month timeline for "immediate solutions" to the mental health, maternity and regional hospital crises. That deadline lapsed a year ago and still nothing has emerged.

"It is now 15 months since the government publicly put health insurers on notice, citing their record profits, record management expenses and poor payouts, to demand they dramatically increase the benefits ratio to private hospitals within three months or be forced to do so. We're still waiting.

"The most recent APRA data shows the benefits ratio paid by insurers continues to languish at 83% for the quarter and around 85% for the year to date. That's a far cry from the 90% the government said it expected.

"The health insurers have had more than enough time to 'do the right thing' off their own bats. Their failure to heed the government's warning makes it imperative and appropriate that the government follow through on its vow and legislate a 90% payout ratio on insurers, returning it to pre-Covid levels.

"Health insurers must be held to account with a Mandatory Code of Conduct for contracting with private hospitals. An arbitration model with price transparency, overseen by the ACCC, is essential in tandem with the 90% guarantee to ensure consistency and fair terms."

-ENDS-

*APHA media release December 2024: Private Health CEO Forum set up to fail

Previous Media Centre:
1/6/2026 PHI payout ratio falls short despite 15 months of govt warnings