Adverse events & private health insurance payments

The issue of private health insurers paying for treatment after adverse events appears to have emerged recently, ventilated in the course of a contractual dispute between a large private health insurer and a private hospital group. The private health insurer Medibank recently issued a media release which included:

Australia’s largest health insurer, Medibank, announced today that it will end its contract with the private hospitals operated by Calvary Health Care. Medibank has taken this decision after long-standing negotiations with the hospital group which was unable to agree to Medibank’s quality and affordability criteria.

The quality criteria referred to appear to focus on certain adverse events and on readmissions:

“We believe it is essential, as a private health insurer, to encourage hospitals to maintain a focus on quality health outcomes for our members, including reducing re-admissions and avoiding preventable, adverse events,” said Dr. Wilson. “We also feel we have a responsibility to work with hospitals to help reduce unwarranted upward pressure on member premiums. We think it’s the right thing to do to ensure our members get the best quality care at an affordable and sustainable cost.”

A Newscorp media report on 13 July 2015 by Sue Dunleavy expanded:

The fund says it will also refuse to pay for 165 preventable readmissions including incidents such as infections after knee surgery, hospital instruments accidentally being left inside patients and the wrong blood being transfused.

The Calvary group in a media release on its website states:

An ill-conceived approach to defining highly preventable adverse events in the new contract – regardless of context and circumstances and without consultation by Medibank – could dilute the effectiveness of highly reliable approaches to reducing adverse events for patients occurring in the first place……In our view, many of the so-called quality and safety measures contained in Medibanks new contract demands appear to be more financially driven than quality-focussed, he said.