Hidden costs of vertical integration
On Wednesday this week, federal AMA President Dr Danielle McMullen took part in a panel session on the ‘Hidden costs of vertical integration’ at the Australian Private Hospital Association annual conference in Adelaide.
Dr McMullen spoke alongside Ben Harris, Director of Policy and Research at Private Healthcare Australia, and Andrew Goodsell, the Senior Healthcare Analyst at advisory firm MST Marquee.
Dr McMullen argued that there is a major conflict of interest in for-profit corporate entities buying up or contracting formerly independent or private health care services or facilities for profit. This is because, by ‘managing care’ to reduce costs and increase profits, there is plenty of evidence to suggest that it tends to compromise the choice, quality and safety of health care provided to patients.
The AMA rejects vertical integration and US-style managed care because it has resulted in a health system that performs far worse than many of its peers on many metrics, including health outcomes. By contrast, Australia’s health system is rated very highly in international terms for the quality and safety of patient care that it provides.
The AMA believes that choices about appropriate clinical care pathways should always remain with the patient and their clinical care team. Those choices should never be directed or influenced by the payer (government or insurers) or by another corporate entity that may have financial interests in medical practices, hospitals or other facilities.
