Quality of patient care threatened by Medibank contract demands: Calvary

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Quality hospital patient care at many Australian hospitals could be adversely impacted through measures that Medibank has demanded Calvary adopt as part of a new funding regime, the leading Australian health, community and aged care provider warned today.

The significant changes Medibank has sought to impose on Calvary through a new contract could ultimately disrupt patient flows to the detriment of the health system.

When more universally applied, the measures Medibank wants to unilaterally impose through a new contract could, in fact, destabilise the public and private hospital systems to the detriment of all patients, including Medibank’s own members.

In particular, people with chronic illnesses and people in their last year of life – to whom Calvary has traditionally given special attention and care – could be vulnerable.

Medibank’s measures could diminish access to private hospital services for these most vulnerable patients, despite their clinical needs, simply because of their recent health history, the hospital group warned.

Calvary has consistently stated that Australian society is best served by a single health care system where the public and private sectors play complementary roles in delivering high quality, responsive and compassionate hospital, community and aged care services.

An ill-conceived approach to defining highly preventable adverse events in the new contract – regardless of context and circumstances and without consultation by Medibank – could dilute the effectiveness of highly reliable approaches to reducing adverse events for patients occurring in the first place.

Calvary said negotiations stalled with Medibank after Australia’s largest private health insurer insisted Calvary hospitals adopt a new suite of “quality and safety” measures, which includes penalties for certain clinical events.

“The quality of care that Calvary provides and the safety of our patients have always been – and always will be – paramount in everything that we do,” Calvary National CEO, Mr Mark Doran, said today.

“In our view, many of the so-called ‘quality and safety’ measures contained in Medibank’s new contract demands appear to be more financially driven than quality-focussed.

“Calvary understands that Medibank is ‘flexing its muscles’ and would prefer to reduce its expenditure by applying these measures, however we are concerned that this is its only motivation in driving its unilateral decision while attempting to cloak these changes with another name.”

A not-for-profit organisation which operates 15 public and private hospitals, 14 retirement and aged care facilities, and 22 Community Care centres across six states and territories within Australia, Calvary said it was “surprised and dismayed” when Medibank initiated termination proceedings earlier this month.

Medibank’s demand for new measures to reduce its expenditure represents a major change in its contractual terms. Calvary believes the measures demanded are not the most reliable or robust indicators of a quality patient care system.

As part of negotiations between the two parties, Calvary requested the controversial measures sought to be introduced by Medibank be delayed for 18 months to allow for wider industry consultation with doctors and other clinicians.

Medibank refused Calvary’s request and suddenly terminated further contract talks – an action that came as a surprise to the hospital group as the parties were finalising dates for mediation.

“This situation needs an industry wide approach to developing the tools that indicate quality outcomes and not a punitive system aimed at reducing private health fund outlays. It begs the question: ‘Who does Medibank put first?” Mr Doran said.

“If initiatives are put forward that are robust, based on accepted evidence and include clinical review, then Calvary will consider them as part of its ongoing clinical improvement process – but Calvary won’t be bullied with non-negotiable ultimatums by insurers with a large presence in the market.

“Calvary is of the strong view that doctors, their patients and hospital clinical staff – and not the insurers – are best placed to make decisions on the best health care for their patients.

“All of Calvary hospitals and services are not-for profit charities and reinvest all earnings in essential infrastructure, facilities and more importantly, our staff. The reinvestment benefits the communities that Calvary serve–including Medibank members.”

As a result of Medibank’s action, if Calvary and Medibank do not reach agreement – via mediation with the Commonwealth Ombudsman’s office later this month – admissions of Medibank members to Calvary hospitals throughout Australia will be impacted from the day after the 30th August 2015 termination date.

Patients already booked before the termination date will not be impacted – provided they are admitted for treatment generally within two months from the date of termination, within six months for chronic condition treatments (such as chemotherapy and dialysis)or within nine months for obstetrics.

For bookings/admissions received after the date of termination – if that proceeds – Calvary will have no other alternative than to charge patients a “hospital-gap” to make up any shortfall in the reduced benefit it will receive from Medibank – which will be in addition to the gaps already imposed by the fund.

Mr Doran said it was Medibank that initiated an approach to the Ombudsman – a common process when two such parties can’t reach agreement. Calvary agreed to the meeting, planned for 21st July 2015, which it hoped would lead to a resolution that meets the needs of both parties.

“In these negotiations, Medibank is dictating and not collaborating,” Mr Doran said.

“Not only are the quality and safety measures glaring examples of Medibank’s dictatorial attitude, but so too are the price, terms and conditions it has put forward as part of these contract negotiations.

“As we have from the outset, Calvary remains committed to a mediation process and looks forward to resolving this issue as soon as possible.

“We ask Medibank to return to the negotiating table as soon as possible to continue talks aimed at a resolution that is in the interest of all parties – including its customers.”

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