Clinical cost-cutting bad for healthcare

WHEN health insurers justify their foray into clinical services based on cost savings, be alarmed. Your piece 'There are no fees at this new private hospital. Some doctors hate it' (SMH 2/7/26), raises deep concerns.

The conflict of interest when private funders are also healthcare providers is disturbing. It skews the emphasis from quality care to cost control. It's a direct threat to patients.

Medibank has doubled its hospital ownership from East Sydney Private Hospital, Hirondelle Private Hospital and Deakin Private Hospital (Canberra), to add Adeney Private Hospital (Melbourne), Nundah Private Hospital (Brisbane) and Western Hospital (Adelaide).

'No gap surgery' sounds great. But when surgeons are working for or directly with the insurer, where does that leave you, the patient?

The once sacrosanct relationship between doctor and patient is corrupted.

The US experience is painful. A recent Harvard University-led study found that "the financial incentive structure of the integrated practices... discourages allocating expensive resources to relatively unprofitable procedures". It concluded "vertical integration negatively affects the quality of care".

When health insurers spruik cost savings in their hospitals, you have to wonder what corners are being cut in your healthcare?

Brett Heffernan, CEO, Australian Private Hospitals Association. Published in the Sydney Morning Herald on 3 July 2026.

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29/10/2025 Talk is cheap