Doctors fear a bid by health insurer nib and a US partner to form a health services buying group in Australia will bring US-style managed care to Australia, but the deal is not assured, despite a provisional go-ahead from Australia’s competition regulator.
The Australian Competition and Consumer Commission (ACCC) gave conditional authorisation for Honeysuckle Health and nib Health Funds to establish the buying collective to negotiate and manage contracts with hospitals and medical practitioners on behalf of nib.
Honeysuckle Health is a joint venture between nib and Cigna Corporation, a powerful US health services and data provider.
The ACCC decision announced on 21 September came despite strong opposition from doctors, the AMA and hospital groups, who argued that the step could open the way for US-style managed care in Australia.
However, Stephen Milgate, CEO of the Council of Procedural Specialists (COPS), said the outcome was still being analysed and any interested party could take the matter to an appeal within a statutory two-week period.
“It is not a done deal yet,” he told the limbic.
He noted that ACCC decisions were frequently appealed but declined to comment further due to legal considerations.
In response to the doctor-led campaign, the ACCC barred the strongest private health funds – Medibank, BUPA, HCF and Western Australia-based HBF, which account for up to 70% of market share in some areas – from joining the buying collective but said smaller players would be allowed.
It is understood that Honeysuckle Health will seek partners including, travel insurers and state-based workers compensation groups, as well as other health funds.
In last week’s ruling, the ACCC also limited the buying group’s authorisation to five years, instead of 10 years sought by Honeysuckle Health.
“After an extensive investigation, the ACCC was not satisfied that granting the authorisation would result in the current Australian healthcare system changing to a US-style managed care model,” ACCC Commissioner Stephen Ridgeway said.
“We also concluded that the condition that excludes the major insurers from membership of this buying group, and the shorter period of authorisation, are likely to address concerns about the long-term effects of the authorisation.”
He said the arrangement was considered “likely” to have a public benefit by increasing competition between health services buying groups.
“We expect this is likely to result in better service and pricing provided by buying groups to smaller private health insurers, who will then be in a better position to provide reduced premiums and improved services to consumers.”
Collective bargaining
Dr David Scott, federal vice president of the Anaesthetists Society of Australia, said the ACCC could not be faulted for decisions based on consumer competition law.