What is a Health Fund Preferred Provider?
Some major private health insurance funds have created “Preferred Provider” or “Members First/Choice” programs which they heavily promote to their members during any enquiring about rebates for specific services. The true meaning of these terms are commonly misunderstood however. Being part of a “Preferred Provider” program has no relationship to the quality of the care you will receive. In fact, often it could actually mean the opposite!Who can be a Preferred Provider?
To become a “Preferred Provider”, clinics must nominate themselves and sign a non-negotiable agreement that they will reduce their fees to whatever the health insurer requests in order to lower the gap required by it’s members. This reduction in price is often 25-30% lower than the industry standard (and does not increase with CPI each year) and although on the surface seems like a great result for clients, it actually encourages poorer service and decreased client outcomes. There is no ‘selection criteria’ of a clinic based on quality of care nor are there reviews of how the clinic practices. This unfortunately promotes reduced quality of care models with shorter consultations to compensate for the reduced fees. It is also important to note that health funds pay a flat fee to all physiotherapists, whether they have 1 or 50 years experience, no matter the additional training undertaken.
Can I still use my Private Health Insurance at Physio Fit Adelaide?
You can definitely still use your private health insurance with us for all of our services, however we are not bound to the fees set by private health funds and their “Preferred Provider” schemes.
What is the Australian Physiotherapy Association’s (APA) position?
The APA is concerned that contractual arrangements between Australian physiotherapy clinics and private health insurers create an imbalance of power. The APA submits that:
- The APA remains concerned that health funds actively divert their members to network providers, regardless of existing therapeutic relationships.
- The APA believes the term ‘preferred’ might make a patient think a practice is of a particular standard than those practices that are not preferred. This is not the case. By being a preferred provider, a physiotherapist simply elects to join the scheme and bring their fees in line with what the health funds mandate. We know this is a significant disadvantage to physiotherapists and that keeping fees close to market rates is essential to maintain the financial viability of a physiotherapy business.
- The current competition laws do not serve the interests of consumers of privately insured ancillary health services as preferred provider schemes discourage competition and restrict consumer choice of health services;
- Section 46 of the Competition and Consumer Act 2010 (CCA) prohibits a corporation with a substantial degree of power in a market from taking advantage of that power for one or more prohibited anti-competitive purposes. The APA submits that preferred provider schemes encourage a misuse of market power, as demonstrated by BUPA’s market saturation in South Australia
- Existing unfair and unconscionable conduct provisions of the CCA should be strengthened to provide a more efficient and equitable basis upon which the forces of competition can operate; and
- The experience of small businesses is that most small physiotherapy practices are reluctant to engage the Australian Competition and Consumer Commission (ACCC) for fear of damaging their relationship with private health funds.
Physio Fit Adelaide’s position
Our team do not believe that they could offer you and your family their current high level of service if they were bound by some of the terms and conditions within the “Preferred Provider” or “Members Choice” agreements. We offer longer appointments than our competitors and have access to technology and facilities that many clinics do not invest in.
At Physio Fit Adelaide you are receiving quality, comprehensive care and that will always be our number one priority.. We hope this information has assisted your decision-making process and to better understand why we are not involved in private health fund preferred provider schemes.