Medibank Private: Responsible insurer or school yard bully?


Medibank Private is at risk of becoming an industry pariah as a result of its current approach to hospital contracting, according to the Australian Private Hospitals Association (APHA).

“Medibank has said to the media that it wants to use its market power to ‘flex its muscles’ in negotiations with private hospitals,” according to APHA CEO, Michael Roff.  “The reality is that by trying to dictate terms unilaterally, they are behaving more like a school-yard bully than a responsible funder of health services.”

“We have been advised that Medibank is  unfairly refusing to negotiate with hospitals.  This “take it or leave it” approach is certainly unreasonable and arguably unconscionable, given Medibank’s market power. It will not help the thousands of Australian patients who are their customers.”

One aspect of the current Medibank approach is the refusal to pay for the occurrence of 165 events it has included on a list it calls “highly preventable adverse events.”

“This list was developed by Medibank without appropriate industry input in an attempt to improve its profitability.  It appears that much of it is not based on accepted clinical standards or evidence-based data and does not consider the risk profile of particular patients,” Mr Roff explained.

The following are examples of patients that Medibank will not pay the hospital for or will pay a reduced benefit for:

    • Infections in cancer patients who are undergoing treatment that leaves them vulnerable to infection.
    • Bleeding and haemorrhage in patients with blood clotting disorders.

“If Medibank is serious about improving safety and quality in healthcare as opposed to improving its profitability, it would work collaboratively with hospitals, doctors and experts in the field through processes and structures that already exist in correctly defining the “highly preventable adverse events”.  The only way to achieve real quality improvement is through collaboration, not bullying tactics.

“We challenge Medibank to subject its list to the independent review of an authoritative body such as the Australian Commission for Safety and Quality in Healthcare.  Failure to do so will indicate they are putting shareholder interests ahead of the welfare of their members.

“Any Medibank members concerned about their future cover should be aware they can transfer to a comparable level of cover with another health fund without having to re-serve waiting periods.  Information about the process of transferring funds is available from the Private Health Insurance Ombudsman website,

“If Medibank does not reconsider its current approach, it may result in private hospitals reluctantly reviewing their service mix and not offering services for complex cases.  It is possible this could lead to more complex patients and those with chronic conditions being forced to rely on the public system,” concluded Mr Roff.

For more information, contact:

Lisa Ramshaw, APHA Director of Communications on 0413 971 999


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