Healthscope boss Greg Horan accuses major health insurers of bleeding private hospitals dry

The nation’s second-largest private hospital operator has taken aim at major health insurers like Bupa, accusing them of under-funding and bleeding its hospitals dry. Launching a nationwide advertising campaign on Wednesday, Healthscope accused Bupa and non-profit insurer Australian Unity of under-funding its 38 hospitals across the country, including 12 in NSW and 13 in Victoria. In WA, it operates Mount Hospital on Mounts Bay Road. Healthscope said the insurers were refusing to meet the rising costs of patient care — including cancer treatments, maternity and mental health — while hoarding super profits and surpluses. The campaign blitz will target radio, newspapers and digital media. Chief executive Greg Horan warned that without improvement to industry funding arrangements, there would be catastrophic impacts to the entire health system. “We have been in conversations with both Bupa and the (Australian Health Service Alliance funds, which include Australian Unity) and the reason we’re here is because those talks have not yielded in fair funding for our 38 local private hospitals,” he told The West. Those talks determine how much insurers pay the hospital operator for providing care. “Our intention here is to get a fairly-funded contract . . . it is not to walk away or tear up those contracts, however if we’re unable to achieve that, everything is on the table,” Mr Horan said. “You’ve got funds like Bupa and Alliance bleeding us dry and not contributing to the cost of the quality healthcare that we provide.” Hospital operators have repeatedly warned they were facing an existential threat because higher costs for medical equipment, supplies, maintenance are surpassing the payments they receive from private health funds. Mr Horan said Bupa paid 81¢ for every dollar it collected for hospital benefits in the 2023 financial year, while Australian Unity paid just 70¢ in the dollar compared with the industry average of 83¢. Australian Unity rejected that claim, saying recent accounts lodged with the corporate regulator showed the payout figure was around 81¢ in 2023 and 2024. “During the COVID-19 pandemic, Australian Unity provided $115 million in givebacks to support members, reflecting our 185-year commitment to prioritising member needs and delivering value for money in healthcare services,” Australian Unity private health insurance chief executive Rebecca Windsor said. Healthscope and Bupa last August signed a three-year hospital contract, which Mr Horan at the time described as a collaborative partnership that recognised rising costs faced by private hospitals. The peak body for health funds hit back on Wednesday to assure that Australians with health insurance will not lose access to private hospitals, despite what it called a “scare campaign” from Healthscope and its private equity owner, Brookfield. Private Healthcare Australia chief executive Rachel David said the campaign was designed to pressure health insurers and the Federal Government into a bail out, which would drive up the cost of insurance for millions of Australians. Dr David added while Healthscope was threatening to terminate contracts with some health funds — suggesting it would result in increased costs for patients — insurers would not permit hospitals to charge customers more. “I want to reassure the 12 million Australians with hospital cover that health funds will not let hospitals in genuine areas of need close,” she said. “Health funds are helping private hospitals recover from a difficult period, but we will not do anything that unnecessarily drives up the cost of health insurance in a cost-of-living crisis. “Healthscope is the one threatening to charge consumers more, not health funds. It’s a disgrace they are threatening pregnant women and people with cancer with extra fees.”