Provider Agreements Deliver Divisive Two-Tiers to Private Health Care

Our practitioners are registered with private health insurance companies for rebates on massage therapy and chiropractor services. We have a HICAPS machine so the rebate can be done straight away using the private insurer's card or for some cases we can provide paper or electronic tax invoices to show payment of the service. When you use the HICAPS machine in the clinic, you only pay the gap for the service (if there is a gap) that is not covered by the insurance card. We are committed to you and your best health, so we don't enter into contractual agreements with the insurance industry to be a choice or preferred practitioner. Here's why:

As health insurance companies role out preferred provider systems for chiropractors and massage in Sydney and across Australia, participants risk it resulting in a two-tiered, inequitable health care system. This is the message emerging from a recent senate committee hearing on proposed new laws that are intended to exclude insurers from family medicine.

Greens Senator Richard Di Natale brought these proposed changes before the senate in response to a trial that Australia's largest private health insurer is conducting in Queensland. This 26-clinic trial is operating in South-East Queensland where insured patients receive perks such as priority appointments, after-hours home visits within 3 hours and bulk billing. The insurance company pays the GP clinics an administration fee and they bulk bill their patients, but it does not subsidise individual doctors, which is prohibited under the Private Health Insurance Act.

The senate committee was reminded that “Australians rely on an equitable and efficient Medicare system as a central feature of the Australian health system.”

What does the Australian Medical Association Say About Private Health Insurers?

Australian Medical Association president Brian Owler told the committee that the scheme was a step towards the managed care system that existed in the US, where private insurers dictated which doctors their customers consulted and which procedures they could get. Professor Owler told Fairfax Media that the managed care system was a "disaster".

What does the Australian Dental Association Say About Private Health Funds?

This kind of practice has long been evident in the dental sector in Australia. By encouraging their customers into preferred provider agreements, the private insurance industry have artificially inflated the cost of consultations and interfered with patients' ability to choose their own dentist, say representatives from the Australian Dental Association (ADA). ADA Chief executive Robert Boyd-Boland told the committee that this has resulted in anti-competitive practices becoming common. These practices include:

• Tactics designed to sink competitors, such as using other products to subsidise their own “no-gap” dental clinics
• Refusing rebates for arbitrary and incorrect reasons
• Enforcing insurer determined policies by removing dentists from their preferred provider lists is the privately owned company disagreed with their practices
• Refusing some dentists’ requests to become preferred providers in areas where they were oversubscribed.

Boyd-Boland also said that the ADA receives complaints “almost daily” from both dentists and patients who are upset that rebate levels vary depending on whether the dentist has relationship with the insurer. “It has resulted in a two-tiered system,” he said.

"Our experience with private health insurers is that, without better regulation by government, private health insurers are significantly impacting on the delivery of optimal patient dental care in Australia," Boyd-Boland said.

"Clearly private health insurers are [more] focused on providing greater return for their shareholders than on the health of their policy holders.

"We feel that’s unconscionable behaviour, in particular with the premium being paid to the insurer, in part, being subsidised by the Federal Government. We feel government have been remiss in not keeping a check on this."

The committee also heard from the Australian Council of Social Services (ACOSS), who are concerned that these practices are a move towards a United States-style health system. Committee representative Rebecca Vassarotti said that overseas experience demonstrates that insurers being involved in primary care pushed up the costs for everybody.

Vassarotti said "It's particularly important that primary health services are universally accessible and affordable regardless of an individual's capacity to pay.".

This would ultimately lead to "managed care" where insurers influenced who patients saw and used incentives to manipulate the way doctors treated patients.

While the senate committee hearing was focused around preventing the 2 tiered system becoming part of general medical practice, it is already happening in relation to other health service providers in Australia. These include dentists, optometrists, chiropractors, physiotherapists, podiatrists, and osteopaths. Providers of these professional health services are contracted to be preferred or the choice for members but really they are agreements with the insurance companies about how much the individual will be charged for the service.

While the idea of receiving greater discount on your services is an attractive one, it is opening the gates to insurance companies having a say in how private practices treat and manage their patients, and how much they must charge them. While it might seem worth it to the client receiving the discount, if this practice artificially inflates the cost of care in the first place, this is not in fact saving the client money, particularly as they have to pay the premium for the health insurance in the first place.

By encouraging their customers into preferred provider agreements, the private insurance industry could artificially inflate the cost of consultations and interfere with patients' ability to choose their own practitioner by offering lower rebates for non-supported practitioners, despite the client paying the same premium 

Insurance holders receiving consistently preferential treatment within clinics means that those who do not have private health cover could have trouble getting appointments and receiving equal access to quality health care. This is contradictory to the values inherent in our Medicare based health care system.

In the long run, this is not to the benefit of the patient, the chiropractor, the remedial massage or sports massage therapist nor the practice, but the preferential system benefits the health fund and their stock holders before anyone else.