Thousands of South Australian patients face the prospect of having to pay more for hospital visits after Australia’s largest health insurer terminated its contract with Calvary Health Care.
Medibank Private gave notice yesterday that it would terminate its contract with Calvary following months of negotiations over the contract.
Medibank Private members seeking treatment at Calvary hospitals in Walkerville, North Adelaide, the CBD and Elizabeth Vale will be affected by the split from August 31.
Around 7000 Medibank Private members use South Australian Calvary hospitals each year.
A Medibank spokesperson said the decision to terminate the contract followed a request by Calvary to increase the rates the insurer pays for health services “to a rate to which Medibank considers unsustainable”.
“Medibank hospital contracts contain a range of important criteria, including those designed to drive quality and affordability by removing waste and inefficiencies from the healthcare system,” the spokesperson said.
“Following three months of negotiations, Calvary Health Care (has) been unable to agree to these criteria even though we have successfully contracted with some of Australia’s best known and most highly regarded hospital operators on similar terms, in the last 12 months.
“We acknowledge that any additional out-of-pocket expense our members experience after 31 August 2015 will be unpopular, but we have a responsibility to work hard to improve the quality and long-term affordability of healthcare services provided to our members.”
However, Calvary hospital group CEO Mark Doran urged Medibank to return to the negotiating table, arguing that the conditions for the new contract demanded by the insurer were unreasonable.
“Medibank … would be better off sitting down with us so that we can get a set of quality standards and implement efficiency programs, in partnership with operators,” Doran told ABC 891 radio this morning.
“What’s happened here is (that) they have simply dictated the terms under which they’re going to have these things.”
“Some of the rules around it are quite onerous, and I don’t think (they) are fair.
“For example, Medibank is insisting on expanded access to patient records.”
He said consultation would have to take place with patients and with medical professionals before Calvary could accept such a condition.
“If common sense doesn’t prevail then we are going to be in a situation where patients are going to (be) out of pocket.”
Photo: Nat Rogers / InDaily
After the August termination date, according to Medibank, the insurer’s members will continue to have “a large portion” of their bills covered.
However, “members should be aware there may be an increase in out of pockets costs as Calvary Health Care will be able to charge their own rates”.
The Medibank spokesperson said the current contractual arrangements would continue to apply for some pre-booked procedures after the cut-off date.
The current contract will continue to apply:
- for another nine months, if the pre-booking is for pregnancy care;
- another six months if the pre-booking is for a chronic condition;
- and another two months for all other pre-booked admissions.
Late last year, Calvary terminated its agreement with the Australian Health Service Alliance (AHSA was negotiating on behalf of Defence Health).
AHSA claimed Calvary Health Care was proposing unreasonable increases in hospital charges.
However, a week later, Calvary backed away from the termination.
Calvary operates four hospitals in South Australia: Calvary North Adelaide, Calvary Wakefield, Calvary Central Districts and Calvary Rehabilitation Hospital.
