The first half of 2025 has been nothing short of dramatic for Australian healthcare, and unfortunately, not in a positive sense.
Healthscope, the nation’s second-largest hospital group, is facing serious financial difficulties. Its owner, private equity firm Brookfield Business Partners, has effectively stepped aside, handing control to creditors after failed restructuring attempts. Brookfield blames this on low insurer reimbursements.
Health insurers, however, point the finger at poor management. A solvent restructuring process is now underway, with the country’s largest hospital Ramsay Health Care reportedly considering a potential acquisition. Click here to read more.
Amid this turmoil, the Labor Party, led by Anthony Albanese, has made a comeback. A key campaign promise was to make 90% of GP visits free by 2030.
Now, the crisis in Australia has exposed the fragile state of Australia’s private health sector, which faces a looming $3 billion funding shortfall despite insurers continuing to post strong profits.
The federal government has responded by convening a Private Health CEO Forum, but critics argue it’s too little, too late — what the system truly needs is bold, structural reform.
One of the biggest shifts underway is vertical integration. Insurers such as Bupa, Medibank, HCF, and NIB are no longer simply funding care — they are now owning and delivering it. Clinics, hospitals, dental centres, telehealth services: the healthcare landscape is rapidly evolving.
Bupa in particular is making news. It plans to open 130 medical centres and 60 mental health clinics by 2027, aiming to process up to 30% of claims through its own facilities. Already owning 180 dental clinics, 50 optical stores, and 22 medical centres, Bupa is investing heavily in hospital partnerships and acquisitions — possibly even acquiring Healthscope. Click here to read more.
This trend has raised alarm bells.
Catholic Health Australia (CHA), the umbrella organisation representing the country’s largest non-government grouping of health and aged care providers, has warned of a gradual drift towards a US-style managed care system — one where insurers control access, dictate treatments, and prioritise profits over patients.
Dr Katharine Bassett, CHA’s Director of Health Policy, cautioned that such a model risks “limiting patient choice and compromising care quality.”
The National Association of Specialist Obstetricians and Gynaecologists (NASOG), which represents Australia’s specialist O&G community, sees Healthscope’s recent closure of private maternity wards in Hobart and Darwin as a troubling signal. NASOG President, Associate Professor Gino Pecoraro, called it a “devastating blow,” warning that insurer-owned hospitals may lead to restricted access, cost-driven decisions, and an erosion of high-quality, patient-centred care.
“The risk of managed care infiltrating Australia’s private system is no longer theoretical — it is happening before our eyes,” said Pecoraro.
He is calling on the federal government to intervene and stop insurers from owning the very hospitals they are meant to fund.
Other healthcare leaders are sounding the alarm as well.
The Australian Private Hospitals Association (APHA) has strongly criticised the trend of insurer takeovers. APHA CEO Brett Heffernan told HBI that insurers are cherry-picking services like hospital-in-the-home, only funding them when they deliver the care themselves. This, he warned, leads to substandard treatment and higher rates of readmission.
Hugh Risebrow, CEO of Latchmore Healthcare Associates, a specialist consultancy focused on diagnostics, private healthcare, and UK market access, has also called for stronger regulation. He told HBI that when insurers own both GP practices and hospitals, the risks of conflicts of interest and reduced transparency become all too real.
Bupa, for its part, insists it supports clinical autonomy and denies any intention to replicate the US managed care model. Yet, scepticism remains. Their goal to manage up to 30% of claims in-house represents a significant shift away from Australia’s traditional, choice-driven system.
The big question now is: will Australia maintain its mixed healthcare model, or will it gradually transition into a US-style system dominated by insurers? For many doctors and patients, the answer will shape the future of care.
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