Doctors Attack National Mutual Health Insurance Policy Of Non-Participating Hospitals – 21 August 1997

The Australian Doctors’ Fund has described as outrageous actions by National Mutual Health Insurance (NMHI) to exclude from full member benefits a number of hospitals in South Australia. National Mutual Health Insurance has listed 21 hospitals and day surgeries as non- participating hospitals and day centres.

In its press release dated 21 August 1997 NMH stated “Mutual Community believes that by having ‘participating’ arrangements with fewer hospitals it can help slow the increase in the cost of hospital claims, which ultimately influences the cost of health insurance for consumers.”

National Mutual Health Insurance states “to have consistently achieved a high absolute profit in comparison to the industry.”- National Mutual Holdings Analyst Compendium 1996 Financial Results.

Spokesman for the Australian Doctors’ Fund, Mr Stephen Milgate said “contrary to NMHI aims to lower members’ health costs any of its members who choose to use non- participating hospitals “may need to make an additional payment to the hospital.”

NMHI has the majority of its policy holders in South Australia and Victoria. Its operations are mainly in Victoria and South Australia, where it has market shares of 32% and 60% respectively. It is 100% owned by National Mutual Holdings which in turn is 51% owned by the French insurance giant AXA. “The AXA group is our largest share holder owning 51% of National Mutual Holdings, so they obviously have a huge stake in our continued success.” – 1996 National Mutual Holdings Annual Review.

“At this level of shareholding AXA will have effective control of National Mutual Holdings.” – National Mutual Share Offer document 12 July 1996.

AXA has substantial international insurance interests. AXA is headquartered in Paris.

“NMHI has aggressively pursued preferred provider arrangements involving contracts with hospitals and doctors. The vast majority of doctors has consistently refused to sign up. Small hospitals have no effective bargaining power in contract negotiations in comparison to a company the size of National Mutual”, Mr Milgate said.

“Amendments to competition legislation have prevented doctors and small independent hospitals aggregating (unless exempted by the ACCC) to resist the powerful competitive pressures capable of being bought by organisations like NMHI”, Mr Milgate said.