Sick or injured Australians may have to pay more in up-front costs at hospitals as patients become a bargaining chip in negotiations between two multi-billion-dollar medical firms.
Key points:
Bupa and Ramsay Health Care’s dispute could affect 3.9 million Australians
Bupa customers will likely face higher up-front costs at Ramsay facilities after October 2
The talks broke down after the two multi-billion-dollar giants failed to agree on a cost increase
Hospital giant Ramsay Health Care formally ended its long-standing deal with private health insurer Bupa and its 3.9 million members on August 2 when the pair failed to agree on hospital costs for patients.
There is now a 60-day window, which expires on October 2, before Bupa customers have to pay more at Ramsay’s 72 private hospitals across the country.
‘I feel sorry for anyone else’
Bupa customer Liz Havriluk from Coolum on Queensland’s Sunshine Coast said she felt lucky her surgery would still be covered.
She just made the company’s deadline for her nasal surgery next month at Sunshine Coast University Private Hospital.
Bupa customers will likely pay more if they try to be treated at certain hospitals.(ABC News: Nic MacBean)
Ms Havriluk said she felt for others who would be left with mounting hospital costs.
“Ramsay hospitals are just about all we have up here, so I feel sorry for anyone else,” she said.
Ramsay Health Care has four of the five major private facilities on the Sunshine Coast, including Noosa Hospital, Caloundra Private Clinic, Selangor Private Hospital at Nambour and Sunshine Coast University Private Hospital.
Ms Havriluk has been a member of Bupa health insurance for 22 years and her partner since 1953.
The pair pay $195 a fortnight for their cover.
Ramsay Health owns Sunshine Coast University Private Hospital.(Supplied)
GP says patients sold ‘false promise’
Sunshine Coast Local Medical Association president Roger Faint said he was already having to comfort and advise patients in similar situations to Ms Havriluk, who were feeling lost because of the stalemate between the two giant health companies.
Roger Faint says patients face uncertainty in the wake of the dispute.(Supplied: Roger Faint)
Dr Faint said they could need to look further afield.
“It puts them in a difficult financial situation — where there was a certainty there’s now uncertainty,” Dr Faint said.
He said older people would be affected by the fallout.
“These people don’t want to travel to Brisbane, or they can’t travel to Brisbane because transport is difficult and they may or may not have family,” he said.
Bupa customers with treatment booked at Ramsay Health Care facilities may have to pay more.(ABC Gold Coast: Steve Keen)
Dr Faint said patients might not realize they were affected until they became sick or injured.
“And they’ve paid their premiums which are thousands of dollars a year, in some cases for a very long time, then they can’t get the service they thought they were paying for,” he said.
“It’s almost been like a false promise as well, isn’t it?”
Hospital spat will ‘ring alarm bells’
Australia Medical Association president Steve Robson said the dispute would make people question why they should bother with private health cover.
“I think people around the country who have private health insurance are looking at this with some trepidation and saying, ‘Why are we in a situation where our health fund and our hospital can’t agree on things,'” Professor Robson said.
Steve Robson says customers will be left questioning why they bother with health insurance.(ABC News: Dave Sciasci)
He said hospitals were under pressure with staff shortages and supply issues while insurers spent less because so many surgeries were cancelled.
“I would think there’d be an enormous pressure on Bupa to actually do the right thing by the people who paid them so much money, and for them to have the care that they need,” he said.
“And I think it’s going to ring alarm bells around the country if it’s not resolved quickly.”
In statements, Ramsay Health Care said Bupa’s offer was below inflation and did not cover the increases in its costs.
Bupa said it would not accept a deal that would significantly push up premiums for its members.
Bupa said it would continue to pay some of the costs for care, even at Ramsay, but that the hospital may decide to charge more without a deal in place.
On Friday, Bupa competitor HCF confirmed it had made a five-year deal with Ramsay that “recognizes the increased costs hospitals are facing.”
Ms Havriluk said she was still facing out-of-pocket costs of $2,500 for her September surgery to address her sleep apnea, despite having gold-class membership.
“Bupa only covers only 85 per cent of the very first nasal procedure and then the other side I get 50 per cent, then 25 per cent for a third surgery,” she said.
“When you think about all the money you’ve spent, it’s pretty lousy.”
When Cora Whitfort needed to update her will, she turned to a trusted, century-old institution that makes them for free: Queensland’s Public Trustee.
She wanted her estate to be divided equally among her four children and, to ensure it would go smoothly, she altered her previous will to make the Public Trustee her executor.
Cora developed dementia about two years later and when she died, “dementia” was listed on her death certificate.
That meant that the Public Trustee, as the executor, had a legal obligation to make “due inquiries” about Cora’s capacity when she made her will back in 2011.
Cora Whitfort with her grandchildren.(Supplied)
None of her family could have predicted those inquiries would lead to almost two years of anguish for those left behind and cost the estate more than $20,000.
Her son Chris Whitfort cannot understand why the authority went to such lengths when no-one in the family was disputing the will.
“She had been share trading. She’d been driving a car, her doctor had not taken a license off her at that time. So, there was nothing that we saw in that period that suggested there was any cognitive degradation,” Mr Whitfort told ABC Investigations.
Estates lawyer Lucy McPherson said it should have been resolved much more quickly since the officer who prepared the will told the Public Trustee he would not have done so unless he was satisfied that she had capacity at the time.
“One would expect a little bit of common sense to prevail,” Ms McPherson said.
“To satisfy that issue of capacity on the death certificate should have taken no more than a couple of hours of additional work.”
“You’re looking at under $1,000 of additional work.”
Estates lawyer Lucy McPherson says the Public Trustee’s investigation of Cora’s capacity could constitute overservicing.(ABC News: Michael Lloyd)
Crucially, the Public Trustee had received a report early on in its investigations showing that Cora had passed a cognitive test at her doctor’s surgery just three weeks before she went to make her will.
Mental assessments and doctor’s certificates are often requested by lawyers when an elderly person is making a will to ensure they have capacity. Cora scored 27 out of 30 on her test, indicating normal mental cognition.
The Public Trustee’s current CEO, Samay Zhouand, was not in the role at the time but said its lawyers continued to investigate “because they wanted to ensure that there was no other conflicting information”.
“The individuals involved can rightly feel frustrated from some of these things. Unfortunately, as a matter of law, the Public Trustee is required to fully inform the court so … [it] is fully informed and satisfied that the person had capacity,” Mr Zhouand told 7.30 in his first TV interview.
Samay Zhouand commenced acting as CEO of Queensland’s Public Trustee in 2019.(ABC News: Christopher Gillette)
Ms McPherson said the Public Trustee office’s extensive research and fees were unnecessary, and potentially constituted overservicing.
“If all of those who are beneficially entitled to the estate are not agitating the validity of this document, why was it necessary to go to such great lengths? It wasn’t necessary at all,” she said.
The Public Trustee’s lawyers chased down medical records going as far back as 1995.
They also tracked down the clerical worker who had witnessed Cora’s signature on the will seven years earlier.
“It was just this merry-go-round looking for information, and they’d get a bit and that wouldn’t be enough, and they’d have to get some more, and we never really knew what the end goal was, Mr Whitfort said.
Mr Zhouand said the Public Trustee had to continue investigating because there was an earlier will in which Cora had promised her house to her grandchildren.
However, because that property had been sold, both wills were effectively the same with the entire estate left to her four children, a fact that the Public Trustee itself accepted in its final application to settle the estate.
The estate was finally settled in 2019, almost two years after Cora’s death. Chris Whitfort demanded the legal bill and found the estate had been charged $378 per hour for his investigation into his mother’s capacity.
“I thought it was mining the estate and doing it properly, legally within the letter of the law,” he said.
Cora’s son Chris Whitfort says his mother had been driving a car and trading shares around the time she made her will.(ABC News: Kyle Harley)
The Public Trustee of Queensland is an entirely self-funded authority, receiving nothing from the state government but relying on fees, commissions and taking part of the interest from its clients in order to operate.
Mr Zhouand said: “The fees and charges of the Official Solicitor’s office … are comparable to a mid-tier firm.”
He also apologized to the family “if the Public Trustee has not met their expectations” and encouraged them to file a complaint.
Trustee office accused of charging fees for no service
Luka was a toddler when she lost her father Clay.(Supplied)
Luka was just one and a half when her father Clay took his own life.
He did not have a will, so his estate, including $72,000 from his super fund, was handled by the Public Trustee.
Luka’s mother Helen, as a single parent with no income, needed financial assistance to care for her daughter, and over five years she was approved to use about $12,500 from the trust.
After that she said there was no contact with the Public Trustee for several years.
When she eventually reached out to the office, she discovered Luka’s fund had dropped to $46,000 back in 2013 and had remained at that amount ever since.
Luka’s mother Helen says she is disappointed with how the Public Trustee office has managed her daughter’s inheritance.(ABC News: Kyle Harley)
Mr Zhouand told the ABC he could not speak about Luka’s case because she was a minor but said “the impact of the global financial crisis, and other factors such as withdrawals for maintenance do lead to a reduction in capital”.
Financial planner Dacian Moses reviewed Luka’s files and said the Public Trustee office made the “unforgiveable” mistake of selling Luka’s shares at a loss after the global financial crisis and putting her money into a low-return cash account.
“The only time you really absolutely lock in a loss in the share market is if you sell after they fall in value,” he said.
In addition, over the past 16 years, the Public Trustee has taken more than $14,000 in fees from Luka’s account which has eaten up all the interest earned on the account.
“It would have performed a lot better if it had just been left alone in a bank account,” Helen said.
Luka was also charged a “service fee” of about $400 each year, but the ABC could find no evidence of any transactions on Luka’s behalf on her statements.
However, it also says it can charge a fee of $444 a year even if there are no transactions.
Luka will soon turn 18 and become eligible to access the inheritance from her father.(ABC News: Kyle Harley)
Luka’s statements over the past nine years show no evidence of any transactions on her behalf.
Mr Zhouand said the fees that customers pay “includes the support and servicing of them in terms of … paying maintenance and paying bills and things of that nature”.
“We didn’t receive any support or services at all. We don’t know these people,” Luka’s mother said.
“It was going to be an 18th birthday gift for her from her father and so it’s disappointing that it has played out this way.
“I certainly don’t have any trust in the Public Trustee.”
Mr Zhouand has said the Public Trustee’s fees “are on the lower end compared to some of the private trustees” and Luka could apply for a review.
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The Queensland government called two inquiries following a Four Corners investigation into its Public Trustee office.
Queensland’s Public Trustee office invested Luka’s money in its own managed funds, allowing it to earn a commission and take part of her returns.
This practice was criticized by the Office of the Public Advocate — another government body which supports people who lack mental capacity — as being in conflict with the trustee’s fiduciary duties.
“I think that there is an inherent conflict of interest in the business model with the Public Trustee in that there are the revenue-raising activities within the Public Trustee, when the Public Trustee is supposed to be serving the clients, whom they are acting for. ,” estates lawyer Lucy McPherson said.
Mr Zhouand said investing clients’ money in the Public Trustee’s investment funds and taking some of the interest had been “authorized by multiple parliaments” in order to “fund operations and services to fund support for our vulnerable customers”.
“The vast majority of the Public Trustee customers receive a quality service at an affordable price. Having said that there is always room for improvement” he said, encouraging clients who were unhappy to apply for a review.
Earlier this year, Four Corners exposed the treatment of financial administration clients under Queensland’s Public Trustee office including how it charged high fees and mismanaged their property and financial affairs.
The state government announced two inquiries following the program. Another review into its fees and charges — which was prompted by a scathing report from the Public Advocate in 2021 — will be released by the government later this year.
Additional research by William Creamer
Watch this story tonight on 7.30 on ABC TV and ABC iview.
