St Vincent’s Health Australia, a CHA member, has today announced it will end its contract with nib after the hugely profitable insurer refused to put a fair offer on the table during negotiations.
“This year nib had one of the highest premium increases at 4.1 per cent, yet in 2022–23 only returned 79 per cent of premiums back to patients – well short of the industry’s 90 per cent gold standard and the lowest of the major insurers,” said Dr Katharine Bassett, Director of Health Policy CHA.
“It is totally unacceptable for insurers to put the squeeze on patients and hospitals while increasing their large profit margins and bank balances.
“Our not-for-profit hospitals are at breaking point, with funding from insurers failing to keep up with the soaring cost of things like food, energy and equipment.
“Today St Vincent’s is rightly taking a stand against insurer power and greed. Other hospitals may need to do the same”.
The private health industry reported a net profit of $2.1 billion for the year to June 2023, double the previous year. Yet at the same time, 71 private hospital services have closed in the past year due to financial difficulties from insurers returning less and less to patients and hospitals.
“Health insurers are making record profits while hospitals around the country are being forced to close their doors because they can’t meet soaring costs,” said Dr Bassett.
“The private sector, which conducts two thirds of elective surgeries, plays a crucial role in alleviating pressure on public hospitals and providing choice and access to patients.
“The federal government’s review into the financial health of the sector is urgently needed to stop this crisis from getting worse.
“CHA is calling for reforms to the annual premium round process and a new funding model called a National Private Price to ensure funding reflects the actual costs incurred by hospitals.”
