Concerns about patient choice, market dominance and purchasing power have been raised over Honeysuckle Health and Nib Group's fresh bid to collectively negotiate with private hospitals and other health providers.
Honeysuckle Health, a subsidiary of Nib Group, has applied to the Australian Competition and Consumer Commission (ACCC) to "enable the continued operation of the HH Buying Group" for a decade.
An ACCC consultation document said the buying group sought to "undertake contracting services in relation to hospitals, medical specialists, general practitioners, allied health professionals and other general treatment providers".
The buying group's purpose was to enable collective purchasing power to negotiate agreements aimed at reducing out-of-pocket patient costs.
For example, the group states it has a program that "removes out-of-pocket expenses for total hip and knee replacement surgery through partnerships with medical specialists".
The Australian Private Hospitals Association (APHA) urged the competition and consumer watchdog to reject the application.
"The application would give Nib's insurer group unmatched bargaining power at the expense of financially struggling private hospitals, jeopardising patient access to timely, high-quality care," APHA CEO Brett Heffernan said.
"This is an attempt by Nib to gain market dominance through a buyer bloc."
Mr Heffernan said it would allow Nib, through Honeysuckle Health, to "collectively negotiate hospital contracts for itself and other insurers".
"This would further skew an already unequal playing field. If insurers are given even greater collective bargaining power, the people who will ultimately pay the price are patients," he said.
Mr Heffernan said hospitals were "already cruelled by rising wages, health inflation outstripping CPI and growing operating costs and no way to recoup them".
An Nib statement said: "We respect the ACCC's process and will continue to engage constructively, including providing the ACCC with a response to submissions".
In February, Nib Group said it recorded a strong first half operating performance for the financial year, with underlying operating profit of $129.1 million, up 22 per cent.
Also that month, Nib said it would increase its premiums by an average of 5.47 per cent. This was the highest rise among the five biggest health funds.
"We continue to invest in initiatives that help reduce out-of-pocket costs," Nib managing director and CEO Ed Close said at the time.
By expanding agreements with health providers, Mr Close said "almost 80 per cent of our customers now benefit from a no gap or known gap payment when treated by a medical specialist".
Honeysuckle Health initially applied to the ACCC for approval to operate the buying group on Christmas Eve 2020, with consultation held from January 12 to February 5, 2021.
At the time, the application was criticised by the Australian Doctors Federation for aiming to introduce "US-style managed care into Australia".
Australian Medical Association (AMA) president Dr Danielle McMullen said the AMA "fought very hard to secure critical safeguards" for that application.
"We can't support reauthorisation unless these safeguards are maintained," Dr McMullen said.
The AMA's submission said commercial arrangements "must not create pressure on doctors to make decisions that are not in a patient's best interests".
"This is fundamentally about patient choice and clinical independence. Decisions about patient care should remain between patients and their treating doctors," Dr McMullen said.
