Insurer NIB reassures member coverage amid talks with St Vincent’s private hospitals

Major health insurer NIB has moved to reassure members of their coverage while it works through contract negotiations with the country’s largest not-for-profit health and aged care provider, St Vincent’s.

St Vincent’s — which operates 10 private hospitals in NSW, Victoria and Queensland — on Thursday threatened to terminate its contract with NIB within the next 65 days unless a “new fairer” funding was reached.

St Vincent’s said NIB refused to make a fair offer that recognised the rising costs of providing private hospital care.

St Vincent’s chief executive Chris Blake on Thursday said NIB’s approach to negotiations left it with no choice but to end their agreement, affecting thousands of patients who face massive increases to out-of-pocket costs.

In response, NIB chief executive Mark Fitzgibbon on Thursday said the insurer was “sympathetic to St Vincent’s financial position” and had made a “very fair and reasonable offer”.

The $22 billion private hospital sector is under immense pressure as it faces higher costs for medical equipment, supplies and maintenance, which are surpassing the payments received from health funds.

In a statement on Friday, NIB reassured those members booked in for treatment at a St Vincent hospital that they are covered as usual, until at least October 3, while negotiations continue.

“There are no immediate changes to cover that would affect our members,” Mr Fitzgibbon said.

“Treatment can go ahead for any member with a booking, and in some cases for some months after termination of an agreement with the hospital, if that occurs.”

In the event negotiations fail, some cover for members will remain in place for longer.

Treatment started before October 3 will continue until discharge, while a pre-booked pregnancy and birth will be covered until July 2025.

Rehabilitation, mental health, oncology, and renal services, started on or before October 3, 2024, will be covered until April 2025.

Mr Fitzgibbon said NIB had a long-term relationship with St Vincent’s and hoped the negotiations would resume.

The private hospital industry’s peak body earlier this year told The West Australian that private hospitals have suffered significant erosion in earnings and margins to the point where a large segment of the sector was under “serious threat”.

It warned the spate of recent closures across the sector could grow.

Australian Private Hospitals Association chief executive Michael Roff at the time said operators need to be making a margin of at least 5 per cent to “keep your head above water”.

He also took aim at the health insurance industry, saying it was enjoying “record profitability” while private hospitals were struggling to survive.

The private health insurance industry made a collective profit of more than $2 billion last financial year, up from $1b the previous year.

In March, the Federal Health Minister approved a 3.03 per cent rise in health insurance premiums.