How would a shift to US-style managed care impact general practice?

Press/Media: Expert Comment


GPs may be about to find out following an ACCC decision that has left medical groups nervous. Earlier this month, the Australian Competition and Consumer Commission (ACCC) issued a draft determination allowing private health insurer nib and US managed care corporation Cigna to form and operate a new health services buying group over the next five years.
The buying group, Honeysuckle Health, eventually aims to collectively negotiate and manage contracts with healthcare providers – such as private hospitals, specialists, dentists and optometrists – on behalf of up to 31 of Australia’s 35 private health insurers.


Managed Care

General Practice

Period3 Jun 2021

Media contributions


Media contributions

  • TitleHow would a shift to US-style managed care impact general practice?
    Degree of recognitionNational
    Media name/outletNews GP
    Media typeWeb
    DescriptionGPs may be about to find out following an ACCC decision that has left medical groups nervous.
    Professor Mark Morgan, Chair of the RACGP Expert Committee – Quality Care (REC–QC), also has his doubts.

    He told newsGP Honeysuckle Health claims it will have the scale and the expertise to use health data to gain ‘efficiencies’ and cost savings, and that its ‘main weapon’ will be a US-style contract with penalties for providers that are deemed ‘below benchmark’ in quality and value of care.

    ‘They believe that they can improve on the current contracts between private insurance companies and providers by managing compliance, outcomes and variations in cost,’ Professor Morgan said.

    ‘The ACCC don’t seem to believe most of the claims made by Honeysuckle Health … [and] were also concerned about the impact of allowing a group to become so dominant.

    ‘The amended proposal is to clip the wings of Honeysuckle Health to contract with no more than 40% of specialists and to re-evaluate after five years rather than 10.

    ‘My concern in this is where is the patient? There is more to high value care than cost, bed-days and re-admission rates.’...
    Rather than benchmarking costs to drive down expenses for individual private insurance companies, Professor Morgan said a better approach would be to utilise health data to improve healthcare overall.

    ‘There is scope to carefully interpret data and to provide information where it is needed to both improve clinical decisions and save the system money,’ he said.

    ‘Perhaps the more expensive providers of private hospital procedures provide better rehabilitation or better communication to the patient’s GP.

    ‘What about patient outcome measures such as improved quality of life? What about the patient experience of receiving care? What about the distance people have to travel away from their support networks?’

    Professor Morgan said while the Australian health system is ‘pretty good’, there is a ‘pressing need’ to evaluate the role of primary care and re-focus on preventive health.

    ‘I am not convinced that groupings of private health insurers have the right motivations to drive system-level improvements,’ he said.

    ‘My guess is that every chance to cost-shift onto Medicare funded services will be taken.

    ‘GPs should expect some Friday afternoon early discharges.’
    Producer/AuthorMatt Woodley
    PersonsMark Morgan