The warning came some time ago, when Medibank described itself as a ‘sleeping giant’ set to awaken and show its muscle. The results are a standoff that could herald a major and dangerous paradigm shift in our health system.

What we are seeing is an impasse between Medibank Private and Calvary hospitals. But with other insurers nib and Bupa indicating their support of Medibank’s stance, this may well go further. While it is Calvary’s contracts that cease on 31 August, other private hospitals are in the health insurers’ sights.

Calvary may not be a big player nationally but here in SA, Calvary is a big deal. A charitable enterprise founded by nuns over 100 years ago, it is responsible for four of our private hospitals, and has touched the lives of countless South Australians. Now it is in a war of words, and full page ads, with the nation’s largest health insurer.

With Medibank holding a 23.3 percent market share in SA, a significant number of South Australians stand to be affected by the outcome of discussions.  Make no mistake, if this dispute is not resolved there are consequences across our state health system.

The issue at hand is provisions Medibank seeks to put into private hospital contracts, which mean the insurer will not pay the costs for episodes where one of 165 events it has mistakenly badged as  ‘highly preventable’ occur. Medibank Private has effectively taken an administrative list and turned it into 165 reasons not to pay for care, including readmission in 28 days.

The results would be increased costs to patients – or high risk patients will be redirected to public hospitals, despite their private cover. The rhetoric is one of ‘quality’ but the subtext is ‘cost’.

The only hospital with no falls, no infections, no readmissions, no complications, is the infamous ‘hospital with no patients’ in the TV comedy classic Yes, Minister.

With the public health system already stretched to the limit, the last thing it needs is more patients being added to the already long public waiting lists. However, if people walk, or are turned away, from private hospitals, or abandon their private cover, that is where they will go. At present, health insurance companies can’t charge more to the sick or elderly.  This laudable Australian government policy of a “fair go” for people with chronic illnesses is at risk.  

The serious risk to accessible private patient care is the reason the AMA has strongly called on the federal and state health ministers to intervene.  So far they have refused, despite the risk to the public system they are responsible for being overwhelmed. Health insurance must deliver when we need it most.

Health is not perfect and complications happen.  But safety and quality measures need to be judged through independent bodies such as the Australian Commission on Safety and Quality in Health Care, not by insurers’ shareholder interests. Improving safety is in health professionals’ DNA, and we are always examining what we do.

The only hospital with no falls, no infections, no readmissions, no complications, is the infamous ‘hospital with no patients’ in the TV comedy classic Yes, Minister. Unfortunately though, this is no laughing matter, and no minister is in sight!

Dr Janice Fletcher is the president of the Australian Medical Association (SA).