Macquarie Health, one of Australia's largest privately owned hospital groups, is preparing to terminate contracts with dozens of private health insurers, escalating a funding dispute that could leave hundreds of thousands of patients facing significant out-of-pocket costs or needing to seek treatment elsewhere.
The standoff, the most serious hospital–insurer conflict since Healthscope's threatened split with Bupa 18 months ago, underscores mounting tensions in the private health sector as labour shortages, wage claims and inflation push hospital costs higher.
Not-for-profit insurers belonging to the Australian Health Services Alliance warned 2.5 million members last week that contracts covering 11 Macquarie-run hospitals and mental health clinics in Sydney and Melbourne expired on March 16, potentially exposing patients to steep fees.
Macquarie Deputy CEO David Wenkart accused insurers of taking a "hostile" approach to negotiations and failing to recognise rising operating costs, arguing that funds were unwilling to share what he described as "super profits".
He said insurers were also paying inconsistent rates for the same services across different hospitals. Insurers, however, claim Macquarie has charged patients out-of-pocket admission fees not covered by insurance, a practice the company says is permitted under its contracts and disclosed on admission.
AHSA CEO Andrew Sando said the alliance had made a fair offer, which Macquarie rejected.
The dispute comes as 14 million Australians brace for above-inflation health insurance premium increases from April 1, with analysts forecasting rises of around 3.8% to 3.9%, further intensifying pressure across the private health system.