While not exactly a lovefest, the two private providers have signed a new funding arrangement.
St Vincent’s and nib have settled their differences and signed a new funding agreement, healing the rift that hit the headlines early last month.
Contract negotiations between St Vinnie’s – which operates 10 private hospitals in Victoria, NSW and Queensland – and the private health insurer, threatening a “divorce” – a first in the health operator’s 167-year history.
St Vincent’s said in July that it intended to end its agreement with the health fund (after a notice period of 65 business days) unless a new funding agreement could be reached.
The company announced today that a deal had been reached and the new funding deal appropriately recognised the rising costs of providing private hospital care.
St Vincent’s CEO, Chris Blake, said he welcomed the new agreement.
“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.
“We want to work with nib – as we do with all the other funds – to keep patient premiums affordable while providing quality health services that deliver excellent outcomes.
“For private health care to operate effectively, health funds and hospitals need to work together, for the benefit of members and patients.”
Nib, who were disappointed that the disagreement became public in July, declined to comment on the new deal, leaving it to the CEO of Honeysuckle Health – nib’s joint venture with Cigna – to announce the deal.
“We are pleased to have reached agreement for nib and St Vincent’s, providing certainty and continuity of cover for nib members,” said Honeysuckle Health CEO, Rhod McKensey.
“Hospital costs filter through to premiums. nib’s aim is to deliver value to members, and that includes containing insurance premium price rises.”
Mr McKensey said the revised funding agreement recognised the balance between hospital viability and premium price containment. He 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.
Mr Blake said the details of the new agreement were commercial-in-confidence, but that the deal would allow St Vincent’s to cover its costs when providing care to nib members in its private hospitals.
“Times have never been harder for private hospital providers in Australia. As a not-for-profit social enterprise, St Vincent’s needs to be able to cover its costs,” he said.
“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.”
Honeysuckle Health acknowledged the assistance provided by the Private Health Insurance Ombudsman to both parties in this process.
