Adeney Private Hospital in Kew at centre of anaesthesiologist stoush
There has been a huge outcry in the medical community over the new insurance company-backed private hospital model that offers care to eligible patients at zero out-of-pocket cost.
The conflict centers on the new Adeney Private Hospital in Kew, which describes itself as Australia’s first private hospital that does not charge patients out-of-pocket.
But there is a problem: Patients must be members of Bupa or Medibank health insurance companies to have free access to the hospital’s surgeons, operating rooms, anesthesiologists, imaging, pathology and medical infusion services.
While advocates argue the new model is revolutionizing healthcare by improving affordability and patient choice, the Australian Society of Anesthetists (ASA) recently warned it represented a dangerous slide towards a US-style system that “inadvertently selects” healthy patients and erodes doctors’ independence.
“Under this model… patient choice and doctor independence may be sacrificed in favor of insurance company control over the course of treatment,” the ASA said in a position paper.
51 percent of Adeney belongs to 42 doctors, and 49 percent belongs to the health insurance company Medibank.
In March, Melbourne mother Zoe, who requested that her last name be kept secret for privacy reasons, suffered a huge bill shock. He received an out-of-pocket quote of $2,100 from a well-established private hospital for his seven-year-old daughter’s adenoid surgery.
Zoe called her private health insurer, Medibank, to check her discount and learned she would only get $180. “I realized that the planned fee for an ear, nose, and throat specialist was extremely high,” he said. “We thought long and hard about this and decided it was completely prohibitive.”
However, the Medibank operator told Zoe that her daughter Beatrix might be a candidate for Adeney Hospital. Although Zoe had never heard of it, she did some research and decided to schedule the surgery at the new hospital.
Six weeks after day surgery at Adeney, Beatrix’s life changed completely.
According to his mother, he no longer snores, sleeps well at night, and has much more energy during the day.
“We didn’t pay a penny,” he said.
Adeney’s chief executive Louise Shardey said patients had traveled as far as Melbourne, regional Victoria and Canberra to reach the hospital.
A recent patient, an Echuca farmer, faced a $10,000 out-of-pocket charge elsewhere to correct a droopy eyelid that was obstructing his vision.
“Every surgeon has the duty to deal not only with the easy cases, but also with the most difficult ones.”
Orthopedic surgeon John Cunningham
“Living from product to product, that cost was simply not affordable for them,” Shardey said. “After looking for an option that didn’t require out-of-pocket payments, he found us and got the care he needed.”
Although there are no immediate plans for additional hospital space, he said it “remains open to future growth.”
The hospital has treated nearly 10,000 patients since its opening last March. Its broad range of surgical services include orthopedics, plastics, urology, gastroenterology, oncology and ear, nose and throat (ENT) procedures, as well as vascular, colorectal, upper gastrointestinal, breast and general surgeries.
While many hospitals offer rolling fees for certain surgeries, Adeney is the first of its kind to offer no out-of-pocket fees for all of its procedures.
Insurers are paying higher agreed-upon fees to Adeney’s doctors in exchange for a promise that their patients won’t be charged gap fees.
“It’s very difficult for people at the moment,” Medibank group director Rob Read said. “With out-of-pocket surgical costs on the rise, a non-out-of-pocket solution makes sense for patients.”
But the medical community is deeply divided over the long-term impact of insurance company-owned facilities and their impact on the sustainability of established private hospitals.
Orthopedic surgeon John Cunningham said the model is based on excluding complex, high-risk patients.
“Every surgeon has a duty to handle not only the easy cases but also the most difficult cases,” Cunningham said.
“A hospital that accepts only the easy ones is not practicing medicine; it is running a screening business.”
In his model, Adeney said, the insurer sits down between the doctor and the patient and decides who walks through the door.
“Hospitals exist for the sickest patients. When you build a hospital that leaves them out, you’re building something else entirely.”
This week, an anonymous group of anesthetists hit back at the ASA, accusing its peak body of being “hijacked” by corporate interests. They argued that the ASA protected established private hospital monopolies that faced significant financial cuts due to new competition.
“Out-of-pocket expenses continue to limit access to specialist care,” the anonymous group wrote in an email to the ASA seen by this imprint. “Models like Adeney… deliver meaningful and immediate financial assistance to thousands of Australians.”
This imprint spoke to three members of the group, who asked to remain anonymous for fear of retaliation.
A Melbourne anesthesiologist said major hospital groups were panicking because the short-stay, zero-vacancy model was draining their most profitable patients.
“Established private hospitals have failed to accommodate the new model of care that has evolved over the last seven or eight years,” they said. “Shorter cases are what make private hospitals money. When you create an environment where you can take on these shorter cases at no cost to the patient, suddenly it becomes incredibly attractive to both patients and surgeons.”
They said anesthesiologists at traditional hospitals were using their influence at the top to stifle competition.
ASA president Dr Vida Viliunas defended the society’s stance and rejected the suggestion that the peak body was protecting the commercial interests of established hospital giants.
He argued that the policy reflected “long-standing principles regarding patient access, clinical independence and the sustainability of the private healthcare system”.
While the group has some concerns about the shared ownership model of private health care, it recognizes that it can benefit eligible patients by reducing or eliminating out-of-pocket costs, he said.
Private Health Services Australia’s director of policy and research, Ben Harris, said surveys consistently showed Australians were avoiding or delaying healthcare due to cost.
Competition that provides better value to patients should be embraced rather than feared, he said.
“If someone can get the same high-quality surgery with no out-of-pocket costs, it’s hard to argue that patients are worse off,” he said.
Treating low-risk patients in facilities designed for low-risk surgeries is not arbitrary, he said.
“This is good clinical practice,” he said. “Patients with complex medical needs should be treated in hospitals equipped for this level of care. This is exactly how a safe healthcare system should work.”
Start your day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
