St Vincent’s Health Australia, the country’s largest not-for-profit health and care provider, has plans to terminate its contract with private health insurer nib following unsuccessful renewal negotiations, reported ABC.

It operates ten private hospitals across New South Wales, Victoria, and Queensland. 

This decision of St Vincent’s could lead to higher out-of-pocket costs for NIB policyholders using St Vincent's private hospitals.

St Vincent's CEO Chris Blake stated: “This is the first time in our 167-year history that St Vincent's has given notice to a private health fund that we intend to end our agreement.”

The dispute centres on the amount that NIB is willing to pay for the treatment of its policyholders at St Vincent's facilities.

Meanwhile, NIB CEO Mark Fitzgibbon was quoted by the news outlet as saying, "NIB has a long partnership with St Vincent's, is sympathetic to St Vincent's financial position, and that of other private hospitals, and has made a very fair and reasonable offer to St Vincent's.

"We will continue discussions with them, noting our partnership has several months remaining."

If a new funding agreement is not reached by 3 October, patients insured by NIB may need to pay more for care at St Vincent’s hospitals.

St Vincent’s highlighted its efforts to negotiate but pointed out NIB's offer did not adequately address the escalating costs of providing care, including wages, food, energy, PPE, IT, and maintenance.

Blake also elaborated on the financial strain, citing a projected increase in electricity costs from $6.5m in 2023 to an estimated $12m in 2024.

During the last 12 months, St Vincent's negotiated new deals with other insurers, including Medibank, HCF, and the Alliance group, where compromises were made.

Blake remarked: “But NIB has given us no choice but to make this call.”

The Australian Medical Association (AMA) has called for both parties to resume negotiations, reported The Guardian.

AMA president Steve Robson stated: “Patients are ultimately the ones who suffer from this sort of situation, as they will likely face higher out-of-pocket costs for treatment at St Vincent’s network of private hospitals after 3 October this year.”