The Australian Society of Ophthalmologists (ASO) and the Australian Private Hospitals Association (APHA) have urged the competition regulator to reject an application that would allow Honeysuckle Health – now a wholly owned subsidiary of nib – to collectively negotiate hospital contracts for multiple health insurers.
The medical organisations claim that allowing the collective negotiation would effectively allow nib to gain market dominance through a buyer bloc, to the detriment of the public.
In 2021, the Australian Competition and Consumer Commission (ACCC) authorised Honeysuckle Health and nib to operate the HH Buying Group and collectively negotiate/manage contracts with healthcare providers on behalf of participating healthcare payers.
It was expected to deliver public benefits, including increased competition between buying groups, improved contracting efficiencies, downward pressure on private health insurance premiums, reduced patient out-of-pocket costs, and improved consumer choice. At that time, the ACCC limited the duration of the authorisation to enable these anticipated benefits to be reviewed before any continuation.
We need a fair and sustainable operating environment that enables private hospitals to continue caring for millions of Australians every year
Changed Circumstances Demand Re-evaluation
The medical groups are now arguing that the HH Buying Group authorisation should not be renewed. In its submission to the ACCC, the ASO said circumstances have materially changed and the anticipated public benefits have not been realised.1
Whereas Honeysuckle Health was jointly owned and operated by nib and Cigna at the time of the initial authorisation, it is now a wholly owned subsidiary of nib. ASO said this “materially alters the ownership structure, commercial incentives, and competitive dynamics considered by the Commission when granting the original authorisation”.
ASO said there had been “limited independent evidence that the arrangement has contributed to lower private health insurance premiums, reduced patient out-of-pocket costs, improved access to specialist medical care, enhanced clinical outcomes or increased consumer choice”.
Additionally, ASO said increasing vertical integration within Australia’s private healthcare sector – with private health insurers expanding into provider contracting, healthcare analytics, care navigation, and healthcare purchasing – has altered the competitive landscape.
Jeopardising Patient Access to Care
At a time when hospitals are “financially struggling”, APHA warned that renewing the authorisation would give nib’s insurer group unmatched bargaining power, jeopardising patient access to timely, high-quality care.2
“This is an attempt by nib to gain market dominance through a buyer bloc, with nib (through Honeysuckle) collectively negotiating hospital contracts for itself and other insurers,” APHA CEO Brett Heffernan said. “This would further skew an already unequal playing field. If insurers are given even greater collective bargaining power, the people who will ultimately pay the price are patients.
“In considering whether to extend legal protection for the insurer-owned buying group, nib is required to demonstrate public benefit. It has failed that test, while the public detriment of such a move is clear,” he said.
Mr Heffernan said a significant increase in insurer bargaining dominance, when Australia’s private hospitals are already under severe financial strain, would only benefit insurance companies. “The Australian Bureau of Statistics recently confirmed that private hospitals recorded a $756 million operating loss last financial year, while insurers reaped $2.7 billion in profits,” he said.
“Hospitals are already cruelled by rising wages, health inflation outstripping CPI and growing operating costs and no way to recoup them. Meanwhile health insurers fail to meet these real-world costs. You cannot keep squeezing a sector that lost $756 million last year and expect patients not to feel the consequences.
“Reduced investment in hospitals, the closure of more essential services, and hospital closures altogether, aren’t in anyone’s interests. It undermines patient access to timely, high-quality care, and will add to public waiting times as more people are forced into overburdened public hospitals.”
Profound Insurer Influence
Mr Heffernan said, “an insurer-owned buying group could have profound influence over provider networks, care pathways, and where patients receive treatment, creating a system where commercial incentives increasingly determine how and where care is delivered.”
He said authorisation would give nib “line-of-sight across sensitive data like rival costs, product performance, and hospital contract terms, as well as hospital reliance on particular funds, case-mix economics, and viability thresholds. nib would have an unmatched negotiating advantage”.
“Australians choose private health insurance because they expect choice: choice of doctor, choice of hospital, and timely access to treatment. This proposal moves Australia further towards a model where insurers have greater influence over those choices, with dire outcomes for clinical independence and limiting patients’ ability to receive care where it is most appropriate.
“We need a fair and sustainable operating environment that enables private hospitals to continue caring for millions of Australians every year. This proposal would head in the opposite direction. It strengthens the market power of insurers while weakening the hospitals patients depend on. The ACCC should reject it.”
AMA Calls for Safeguards
While the Australian Medical Association (AMA) did not call on the ACCC to reject the application, its submission stated that “any replacement authorisation must retain the substantive safeguards that applied under the previous authorisation framework (which) represented an appropriate balance between allowing innovation in healthcare funding and protecting clinical independence, patient choice and competition”.3
The safeguards were directed at ensuring genuine practitioner and patient choice, protecting clinical independence, establishing appropriate parameters around data collection and use, and preventing inappropriate incentives or penalties.
“In the absence of such evidence, the AMA considers the existing framework should be retained,” AMA said.
When asked by mivision for a comment, nib said, “We respect the ACCC’s process and will continue to engage constructively, including providing the ACCC with a response to submissions from interested parties at the relevant time.”
The nib spokesperson said it would not be appropriate to comment outside of the ACCC’s authorisation process. The final determination will be delivered in December 2026.
References
- Australian Society of Ophthalmologists. Submission to the Australian Competition and Consumer Commission. Application for revocation and substitution of authorisation AA1000733 by Honeysuckle Health Pty Ltd and nib health funds limited. 20 July 2026.
- Australian Private Hospitals Association. nib bid for ‘buyer bloc’ must be rejected: APHA 20 July 2026.
- Australian Medical Association. AMA submission to ACCC application for authorisation (revocation and substitution) from Honeysuckle Health Pty Limited and nib health funds Limited. 22 July 2026.
