Why Medibank wants hospitals to be more accountable for mistakes… 70



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It’s not surprising and rather nice to know that our large and quite heated discussion at Starts at 60 saw the Chief Medical Officer of Medibank contact us to explain why they are restructuring their agreements with hospitals this week.  Read it here: [“Readmission to hospital within 28 days might not be covered by your policy!“] .

Medibank was caught in a media storm this week after a part of their major contract changes with hospitals was leaked to the media. Their decision to place pressure on hospitals to have to pay for readmission costs themselves if a patient has to come back within a 28 day period for complications to a treatment got everyone talking.

The conversation with Dr Linda Swan, Chief Medical Officer of Medibank Private was enlightening. I dare say we should all consider the merits of the debate that a health fund holding a hospital accountable for doing a good job might be better for the patient than a health fund offering to pay out indefinitely for sloppy workmanship that might lead to someone’s demise.

Dr Swan was adamant in our discussion yesterday that Medibank has the interests of the patients at heart in their renegotiation of contracts with hospitals to include this new 28 day readmission rule.   And she assured me personally that no patient would have to pay for the change to contracts with hospitals.

She went on to explain…

“If you go in for a hip replacement, we will of course pay for the cost of the hip replacement and your normal length of stay in the hospital. If you fall out of bed and break your arm and that extends your hospital stay, then we are negotiating with the hospital that they cover the cost of the extended stay to ensure their continuity of treatment is a priority.”

The intent seems to be that the hospitals agree to absorb the additional cost associated with the complication and it drives them to have a greater obligation to care in the post-treatment phases of ailments in future in their attempt to reduce their own costs.

“Bizarrely, the reverse happens at the moment, if you go into hospital and there is a complication or adverse event, and the procedure doesn’t go well, the hospital gets paid more for that than if it was a fabulous procedure where there was no complications.

“That is a crazy perverse incentive and we think the better incentive is that the hospital should bear the cost. The good news is complication happen to less than 1%,” she said.

Dr Swan also assured me that those people suffering from cancer or severe and chronic disease which sits within a selected group will not be held under this rule. If it is “treatment” you are expected to come back time and time again for it.

Interestingly, when I spoke of a dear loved family friend who passed away from non cancer complications after a cancer surgery several years ago, the conversation took another path. She says these are one of the biggest areas of concern that Medibank is trying to tackle.

“People with cancer are more prone to develop infection, that doesn’t mean that we shouldn’t and cant do things to stop infections from occurring. Infections in people with cancer are a major cause of morbidity and mortality (sickness and death)

Consequently, we should be calling out for more to be done to prevent infections in people with cancer. Our view is that there is more that can be done. But, given all the advancements in modern medicines, we’re not seeing the expected reduction in these complications in hospitals at this time, so we’ve decided to obligate it.

“Our best customer is one who lives long and well,” said Dr Swan in closing.

It is interesting to note that Calgary Hospitals have reentered negotiations with Medibank Private after previously abandoning talks.

Does it sound like the right thing to be doing to drive hospitals to greater financial accountability for bad service?  How do you feel hearing it from this angle?

Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. The devil will be in the detail. Post op infections can delay discharge from hospital significantly no hospital will absorb costs that are high. It sounded almost reasonable when I heard the doctor on TV talking about bedsores, and by not paying for the treatment of bedsores it will put pressure on hospitals to do more to prevent them in the first place. Inevitably hospitals will pass charges incurred onto patients. This the first step towards the U.S. system where the medical fund not your doctor determines your health care.

    4 REPLY
    • Yes but much harder to prevent in bedridden patients. It will give a financial incentive to hospitals to buy the better mattresses if a fund won’t pay to treat them. It is the sometimes fatal post op infections that can cause long hospital stays that I find worrying. Hospitals try hard to prevent these but they sneak in and can be hard to irradiate. Hospitals after all have sick people with vile bugs in them. Not paying for these hospital stays could leave patients with massive debt. We may soon be like the U.S. where fully insured patients can come out of hospital with bills in the $100,000s as their fund won’t pay for a procedure or care regime.

    • Thank you for taking up this issue as a serious one for all age groups not just 60+ ..we must not forget that Medibank etc., are insurance companies even though they market themselves are caring warm organisations. Insurance companies are driven to and will always try to avoid paying for ádverse’ events….we must be given the opportunity to understand what goes on with these organisations who enter private and secretative negotiations with hospitals. So thank you again for raising this on your forum.

    • And the ones being penalised for this are the elderly and vulnerable. I know I have a 93 yo relative and whilst she enjoys reasonable health, she has been back in hospital following surgery several times – nothing to do with hospital treatment but rather an aged body not coping too well.

  2. Medibank is now a private listed medical fund. That explains it – it’s called PROFIT – we are heading for a US style private health system that uses a “managed care” model. Everything will come down to dollars and cents and patient care will take a back seat role.

  3. I can’t see Hospitals being able to absorb charges. It all sounds ok in theory,but the system is almost collapsing from lack of funding,so I have severe doubts,that this will in fact still land up as the patients problem.

    4 REPLY
    • I think the rot set in when hospitals started calling patients ‘ clients’ instead of patients. I was told by a nurse that at a private hospital where she worked there was a patient in ICC. The CEO of the hospital told the nurse that the ‘client’ was absorbing too many resources and had to be discharged. The nurse told the doctor and thankfully the doctor hit the roof and told the CEO if the hospital could not provide the care he prescribed then he would be taking his patients elsewhere. The CEO backed down. Of course the CEO was an accountant and only cared about dollars and cents.

    • Oh Debbie,don’t get me started on this inhumane way the medical system has chosen. Everyday people have to experience that! Totally unacceptable. I can just imagine what will happen with this new scheme,Medicare and Hospitals will be fighting over who’s responsible and the poor patient will be left stranded.

  4. Medibank paid $5.679 billion for their asset. They have to show a profit to their shareholders. This business is here for one reason only and that is to make money. They will screw the hospitals and the patients in equal order. The Private Hospitals must pay dividends to their shareholders. So who do you think is going to lose here. The shareholders of the Hospitals? The shareholders of the health insurance company? – or the poor bastard who is sick or injured. The Liberals Party sold us down the drain and our community asset has gone from the entire Australian public, to a few wealthy shareholders.

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  5. U have to be kidding. People r not perfect. Doctors nurses or patients. There r always those who need more support than they have at home. Those that actually do not do as the doctor says. And then there are the lifestyle choices people make that impact on how things turn out. The elderly and the lonely who feel that hospitals r a safe place to be. This will punish these people as the hospitals will it be able to take on there admissions under this system. Stupid.

  6. I recommend anyone now in Medibank private to look around for a better fund & bail out. You don’t have to be loyal to them, they now are not loyal to you.
    If you want to have a rebate for a regular massage they have now cut rebates to only $100 per year & other complimentary services & have cut others out.
    At present they are one of the worse to deal with.
    Health Funds have become too expensive to be in these days, it’s hard to know what to do, but if you can’t afford it, there is no choice.

    6 REPLY
    • The trouble is for many of us we cannot change due to the rules about pre-existing illness, so far I have not come across a fund without a 12 month limit on claiming for anything pre-existing. My husband has diabetes which can be held responsible or partly responsible for a wide range of other conditions. I am sure too if Medibank Private is successful in renegotiating this there will be a stampede of other funds follow in its wake.

      1 REPLY
    • I hear you Barbara. I waited 12 months in a fund before I went for my hip replacement & that was okay. Have been able to afford health find insurance these years while working, but not sure of my decision once I leave. The costs are almost out of reach for many on s pension. Probably strip down to hospital only without extras.

    • Yes Carol we stripped our cover to a lower hospital table and scrapped extras when we retired. It is still a huge whack every fortnight but it has allowed us hospital treatment we could have waited years for if public patients. I found Extras easy to drop after being horrified by how little I would get back on a crown on my front tooth, less than a third of the cost. Never got the crown and still have the old gold filling.

    • Thanks, yes, I guess I will be doing that also. As for my poor old teeth good luck with them. Best of wishes for your life also.

    • I ticked something on the web saying see if we can get your electricity cheaper (or words to that effect) so I ticked it and in short order I had a phone call from I Select to tell me they were sorry but there was only one provider in my area so I couldn’t get any better but would I like to compare other prices, health insurance for instance – so I said yes and answered a lot of questions, the list was emailed to me and I accepted it but when Bupa rang to say they had received notification that I was leaving they asked why and what could they do better and the conversation went round and round and I received an email from them and rang back saying what I didn’t want and I was prepared to pay the first $500 (each) to go to hospital and I didn’t need IVF cover etc so I ended up a lesser range and a bigger co-payment but I’m not expecting either of us to have a hospital visit except for accident which is covered also. It was painful negotiating my way through it but my monthly payment is now $241.00. Hubby been in Medical Benefits since he was 18 then changed to couple 39 years ago and been in it ever since even though it changed to Bupa.

    • Could you imagine how much money all of us would have in hindsight if we put all those years of monthly payments into a special bank account?

  7. Who decides if it’s an adverse event? Many infections etc are not the result of poor treatment. They just happen! The patient will end up absorbing the cost and who can afford that!

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