Medibank’s plan to shift the cost of avoidable complications back onto hospitals is taking form, with the country’s second-largest private hospital group agreeing to the change. Medibank Private, Australia’s largest private health fund, signed a two-year contract with hospital group Healthscope on Monday that the companies claim will not negatively impact patients. One of […]
Medibank’s plan to shift the cost of avoidable complications back onto hospitals is taking form, with the country’s second-largest private hospital group agreeing to the change.
Medibank Private, Australia’s largest private health fund, signed a two-year contract with hospital group Healthscope on Monday that the companies claim will not negatively impact patients.
One of the terms of the $400 million deal is that Medibank will no longer pay out claims that relate to preventable complications in hospitals, such as pressure sores and some falls.
Healthscope’s hospitals will also pay for the cost of readmissions within 28 days of a procedure for an avoidable complication.
If there is a dispute over whether the complication was avoidable, an independent medical panel is engaged to determine fault.
The change would curb the steep rise in premiums without any cost being passed from the hospital to the patient, a Medibank spokesman claimed on Wednesday.
“There is no question that our patients or members would ever be charged for one of the avoidable re-admissions or hospital-acquired complications.”
There are significant savings at stake for Medibank. About $3.5 billion of the $5b the insurer pays in claims each year goes to hospitals.
The deal represents a giant leap for the insurer, which has faced pressure from the AMA for “arbitrarily” setting safety and quality measures in order to save costs.
Medibank’s next test will come when it negotiates its next contract with Ramsay Health Care, Australia’s largest private hospital operator. The current contract is set to expire in 2016.
