Insurers being brought to heel a good start

IN A press conference today, Federal Health Minister Mark Butler said he has seen a material increase in payments to private hospitals since he made is threat to regulate insurers over three months ago, indicating the funding ratio of benefits to private hospitals will be around 87% this financial year.

"If true, we will very much welcome such a turnaround," APHA CEO Brett Heffernan said. "But, so far, our members are yet to see any evidence of the improved flow through.

"Remember the funding ratio to private hospitals over the December 2024 to March 2025 quarter, as reported by APRA, plummeted to just 80.7%, despite the insurers banking record $2 billion a year profits. So leaping to around 87%, annually, by the end of June is something we'd need evidence to be convinced.

"The APHA represents 286 private hospitals. The bulk of the sector. In the wake of the Minister's statement, we sought advice from members today, asking them to report if they have seen anything like the bump being claimed.

"The response was swift and compelling. Noone has reported this as their reality. While patient numbers are up, they are not seeing increases in rates from insurers. This compounds their losses.

"The extra $250-$350 million expected this financial year from insurers would be a good start. It's a long way short of the $1 billion annual shortfall in funding to hospitals, so the payment ratio needs to continue beyond this three-month episode. It needs to be permanent.

"We recognise the Minister has made the commitment to ensure that it does continue in perpetuity. He also made the point it is not consistent across all insurers. It is also not consistently paid across all hospitals. So we will all need to monitor this closely and hold any laggards to account.

"Given the underpayment to hospitals exceeds $1 billion a year, the extra $250-$350 million over this year is not in the ballpark.

"We want to be positive about today's development. It marks an important moment in rectifying the funding mess that sees insurers reap unprecedented profits while the providers of healthcare, private hospitals, are forced to close services or close their doors completely.

"It will be important to see how this plays out regarding inflation as time goes on."

-ENDS-

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