Media Release - ASO BACKS MINISTER’S PUSH FOR GREATER PRIVATE HEALTH INSURER ACCOUNTABILITY

‘Australian patients must come first’ — that’s the message from The Australian Society of Ophthalmologists (ASO), as we throw our support behind Minister Mark Butler’s demand for insurers to deliver better value and greater accountability.

In a statement recently, Minister Butler criticised insurers for failing to meet the expected 87% return-to-service benchmark and announced plans for a new “consumer value and market integrity” test when assessing premium increases. 

He also raised concerns about “phoenixing,” where insurers retire gold-tier policies only to reintroduce near-identical, higher-priced products.

Mounting pressure on private hospitals was also highlighted, with profit margins plummeting from 5.1% in 2020–21 to just 0.1% in 2023–24, as investment in the sector continues to decline.

ASO President Dr Peter Sumich said the Minister’s comments echoed long-held concerns from the medical community.

“Private health insurers have an obligation to return value to their members and support the hospitals and doctors who deliver essential care. When less than the expected benchmark is returned to services, patients ultimately pay the price. Greater accountability is urgently needed,” Dr Sumich said.

“We are seeing private hospitals under extreme pressure, with margins falling to near zero. This creates real risks for patients, doctors, and the sustainability of the entire private system. If insurers don’t lift their game, the sector will continue to bleed investment.”

“The practice of retiring gold-tier policies only to replace them with near-identical, more expensive products is unacceptable. It undermines trust, disadvantages patients, and fails the integrity test the Minister has rightly called out.”

The ASO cautions that managed care, often promoted as cost-saving, comes with serious risks for patients, including reduced choice of doctors and hospitals, out-of-network penalties, treatment delays due to pre-authorisations, and potential conflicts of interest where profits are prioritised over patient care.

The ASO joins the Australian Medical Association and Australian Private Hospitals Association and many others in backing the push for greater insurer accountability and will continue to advocate for reforms that protect both practitioners and patients.

“The ASO strongly supports reforms that protect patients and the practitioners who care for them. Ophthalmologists see firsthand how vital it is that private health insurance delivers value, not just profits. We back the Minister’s call for change and stand ready to contribute to solutions,” Dr Sumich said.

The full letter from Minister Butler is available to the public here.

BACKGROUND:

The ASO has a long history of protecting patient choice and pushing back on the growing influence of private health insurers (PHIs). 

Key wins include stopping pre-approval activities in 2015, leading the “Your Right to Switch” campaign since 2018, and the 2021 “Send the Eagle Home” campaign, which led the ACCC to impose strict limits on a US health fund’s expansion.

More recently, the ASO lodged an e-petition (EN6877) through the Parliament of Australia calling for the establishment of a Private Health Commission or Independent Authority to act as a referee in a divided private health sector. The petition warns that PHIs are gaining influence while private hospitals struggle, with closures creating opportunities for insurers to expand further.