Bupa tweaks controversial gap cover plan following public outcry
Thursday, 8th March, 2018
HEALTH fund Bupa has admitted it went a step too far amid anger over changes to its gap cover scheme and will now wind-back elements of its controversial plan.
Bupa had informed doctors that from August insured patients would only qualify for gap cover if they were treated at a Bupa-contracted hospital or day-stay facility, causing the Australian Medical Association (AMA) to warn of "US-style managed care" and policyholders threatening to leave.
The fund's managing director Dwayne Crombie told Fairfax Media that "thoughtful" feedback, especially from those in regional areas, made him realise the change to the medical gap scheme was "catching the wrong thing" and he decided on Tuesday night to make re-adjustments.
"The difference here is if you go to a public hospital and you elect to use your private health insurance and it’s a booked or arranged admission we will continue to offer public hospital doctors the Bupa medical gap scheme and the whole point of that is it takes away the chance that you’re going to get an out of pocket," he said.
"If members are in an emergency or acute situation and they don’t get to choose their doctor, then the standard Medicare arrangements will operate."
It's unclear whether this latest news will stem the flow of Bupa members leaving the fund.
Exclusive figures from comparison website iSelect shows that in the past six days about 6400 Bupa policyholders have inquired about other funds, up 82 per cent on the same period last year.
"Nearly a thousand people have actually made the switch, which is a really surprising number," said iSelect chief executive Scott Wilson.
The AMA characterised the original move, as well as Bupa's decision to restrict cover for some services on basic to standard hospital policies, as “one big leap towards US-style managed care”.
Federal Health Minister Greg Hunt requested the Private Health Insurance Ombudsman to investigate the fund.
Despite Bupa running its own aged care centres and dental clinics, Dr Crombie firmly rejected the notion of managed care, saying the law protected the "clinical autonomy" of doctors.
In regards to the gap cover scheme, he said he made "no apologies for flushing this one out", that is, prevent members from facing extreme out-of-pocket costs when there are contracted facilities where there would be no surprises.
"It’s got nothing to do with money, it’s got nothing to do with us having control, it’s got everything to do with transparency," he said.
AMA president Michael Gannon stood by his comments about US-style managed care, saying Bupa was increasingly seeking to determine where patients will receive care.
"We’ll fight any move down this road towards anything that remotely looks like the world’s most expensive health system," he said.
"Absolutely this opens the way for other funds to follow suit and if the AMA doesn’t call out this sort of behaviour, it is inevitable.
Rachel David, chief executive of Private Healthcare Australia, explained that Bupa was trying to manage a "perverse" incentive where if a patient with a minor condition is treated in a day hospital rather than a doctor’s room, the gap cover scheme can be accessed, even though the cost of the claim is much greater.
"This is not the same as US-style managed care, which refers to the health system in the US in the 1990s where health funds employed doctors and pre-approved claims," she said."Bupa is not doing this."
Leanne Wells, chief executive of Consumers Health Forum, said she didn't necessarily support the AMA's "managed care" claims, saying the moves may have been in response to "very high fees charged by surgeons and specialists".
"We urge the AMA to get behind moves to establish a public website where all individual doctors’ fees and performance data are listed," she said.
"We have called for a thorough inquiry by the Productivity Commission into government assistance of health insurance."
This call was echoed by Ian Burgess, chief executive of the Medical Technology Association of Australia, which suffered $1.1 billion worth of cuts to the cost of devices on the prostheses list amid the federal government’s push to lower premium increases last year.
“Despite a recent Senate inquiry calling for increased transparency we need a circuit breaker and a Productivity Commission inquiry is the right vehicle," he said.
Tuesday, 3rd April, 2018
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