Hunter-based health insurer nib has resolved its contract dispute with St Vincent's Health, with the two parties signing a new agreement.
St Vincent's threatened to walk away from the negotiations in July, claiming the offer from nib doesn't come close to covering the cost of providing hospital services, which would have left nib customers unable to use their hospital cover at group's 10 private hospitals that are home to some the nation's best surgeons and specialist.
St Vincent's chief executive Chris Blake said the new funding deal recognised the rising costs of private hospital care.
"Exiting our agreement with nib was never the outcome St Vincent's wanted," he said.
"This was the first time in our history that we'd given notice of our intention to exit an agreement with a health fund.
"I'm very glad both parties have been able to use the notice period to dig a little deeper and reach a fair and mutually satisfactory agreement."
Although the details of the new agreement remain confidence, Chris Blake said the deal would allow St Vincent's to cover its costs when providing care to nib members in its private hospitals.
Nib declined to comment, however Honeysuckle Health - which is half owned by nib and negotiations its health contracts - agreed the revised funding agreement recognises the balance between hospital viability and premium price containment.
"Hospital costs filter through to premiums... nib's aim is to deliver value to members, and that includes containing insurance premium price rises," Honeysuckle Health chief executive Rhod McKensey said.
"We are pleased to have reached agreement for nib and St Vincent's, providing certainty and continuity of cover for nib members," said
Mr McKensey said both parties were working toward patient care initiatives, including at-home care models for wound care and orthopaedic rehabilitation post-surgery, and palliative care for clinically appropriate patients.
In March, nib announced an increase to its health insurance premiums by an average of 4.10 per cent, which was above the insurance premium average of 3.03 per cent.
The company says after two historically low rises, it had to factor in rising inflation.
The health fund recorded a 19.4 per cent jump in profits in the first half of the financial year, with a net profit after tax of $104 million for the six months to December 31, 2023. It is due to release its full annual report next week.
Long-standing nib chief executive Mark Fitzgibbon recently announced he will retire at the end of the year, after steering the company for more than two decades.
