New data shows private health insurers making huge profits
February 28, 2025Our Position – Insurer vertical control
March 3, 2025
Allowing Healthscope hospitals to fall into the hands of private health insurers will open the floodgates to a US-style healthcare system that reduces choice and quality of care for patients, Catholic Health Australia has warned.
Reports that health insurers are considering a move to operate Healthscope hospitals raise concerns about increasing vertical integration, where health insurers control both the funding and provision of care.
“The prospect of a health insurer gaining control over a major hospital network such as Healthscope is alarming. This move could severely compromise patient choice, diminish the quality of care, and undermine the clinical autonomy of healthcare professionals,” said Dr Katharine Bassett, Director of Health Policy at Catholic Health Australia.
“If a health insurer runs Healthscope hospitals, we risk a future where patients can only see the doctors and receive the treatments their insurer allows — not the care they actually need. This would be a dangerous shift toward a managed care model that puts profits ahead of patients.”
CHA has published a position paper on insurer vertical control, warning that such consolidation could fundamentally alter patient care in Australia. It also outlines other examples of vertical integration occurring in Australia’s health system.
In the United States, vertical integration in healthcare has led to higher premiums, reduced provider earnings, and compromised patient care quality. Studies have shown that such consolidation often results in restricted patient access to necessary treatments due to insurance coverage limitations.
“We must learn from international experiences where insurer-driven healthcare models have led to increased costs and reduced quality of care. The Australian healthcare system’s integrity relies on maintaining a clear separation between insurers and healthcare providers to ensure patient choice and access remains at the centre.”
“We need to balance the need for innovation with the right checks and balances to ensure reform moves in the best interests of patients,” Dr Bassett said.
CHA is calling upon regulatory authorities and policymakers to closely scrutinise this potential acquisition.
