![\"Henrietta](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/01\/ad6900c08e1c63da0b4cf3ef0d03f64a1c4d476c.png\")
Save<\/p>\nSave<\/p>\n
You have reached your maximum number of saved items.<\/p>\n
Remove items from your saved list<\/a> to add more.<\/p>\n AAA<\/p>\n A stoush has erupted within the medical community over a new model of insurer-backed private hospitals that offers care with zero out-of-pocket fees to eligible patients.<\/p>\n The conflict centres on the new Adeney Private Hospital in Kew, which describes itself as Australia\u2019s first private hospital to offer patients no out-of-pocket costs.<\/p>\n But there is a catch: patients must be members of health insurers Bupa or Medibank to access the hospital\u2019s surgeons, theatres, anaesthetists, imaging, pathology and medical infusions without charge.<\/p>\n While advocates argue the new model revolutionises healthcare by improving affordability and patient choice, the Australian Society of Anaesthetists (ASA) recently warned it represents a dangerous slide toward a US-style system that \u201ccherry-picks\u201d healthy patients and erodes the independence of doctors.<\/p>\n Related Article \u201cUnder this model… patient choice and doctor independence may be sacrificed in favour of insurer control over the therapeutic process,\u201d the ASA said in a position paper.<\/p>\n Adeney is 51 per cent owned by 42 doctors and 49 per cent owned by health insurer Medibank.<\/p>\n In March, Melbourne mother Zoe \u2013 who requested her surname be withheld for privacy reasons \u2013 experienced major bill shock. She was hit with a $2100 out-of-pocket quote from an established private hospital for her seven-year-old daughter\u2019s adenoid surgery.<\/p>\n Zoe called her private health insurer, Medibank, to check her rebate and learned she would receive just $180. \u201cI realised the ear, nose, and throat specialist\u2019s scheduled fee was just outrageously high,\u201d she said. \u201cWe thought long and hard about it and decided it was simply prohibitive.\u201d<\/p>\n However, the Medibank operator told Zoe that her daughter, Beatrix, might be a candidate for Adeney Hospital. Although Zoe had never heard of it, she did some research and decided to book the surgery at the new hospital.<\/p>\n Related Article Six weeks after having the day surgery at Adeney, Beatrix\u2019s life has completely changed.<\/p>\n According to her mother, she no longer snores, sleeps soundly through the night, and has far more energy during the day.<\/p>\n \u201cWe did not pay a cent,\u201d she said.<\/p>\n Adeney\u2019s chief executive, Louise Shardey, said patients were travelling from across Melbourne, regional Victoria, and as far as Canberra to access the hospital.<\/p>\n One recent patient, an Echuca farmer, was facing a $10,000 out-of-pocket fee elsewhere to correct an eyelid droop that blocked his vision.<\/p>\n \u201cEvery surgeon has a duty to the hardest cases, not just the easy ones.\u201d<\/p>\n Orthopaedic surgeon John Cunningham<\/p>\n \u201cLiving crop to crop, that cost was simply not viable for them,\u201d Shardey said. \u201cAfter searching for a no out-of-pocket option, he found us and received the care he needed.\u201d<\/p>\n She said while there were no immediate plans for additional hospital sites, it \u201cremained open to future growth\u201d.<\/p>\n Related Article The hospital has treated almost 10,000 patients since its opening last March. Its broad surgical offerings span orthopaedics, plastics, urology, gastroenterology, oncology, and ear, nose, and throat (ENT) procedures, alongside vascular, colorectal, upper-gastrointestinal, breast, and general surgeries.<\/p>\n While many hospitals offer no-gap fees for certain surgeries, Adeney is the first of its kind to offer no out-of-pocket fees across all its procedures.<\/p>\n Insurers pay Adeney\u2019s doctors higher agreed fees in exchange for a commitment that their patients won\u2019t be charged a gap fee.<\/p>\n \u201cIt\u2019s tough out there for people right now,\u201d said Medibank group executive Rob Read. \u201cWith surgical out-of-pocket costs rising, a no out-of-pocket solution for patients just makes sense.\u201d<\/p>\n However, the medical establishment is deeply divided over the long-term implications of insurer-owned facilities and their impact on the viability of established private hospitals.<\/p>\n Orthopaedic surgeon John Cunningham said the model relied on excluding complex, high-risk patients.<\/p>\n \u201cEvery surgeon has a duty to the hardest cases, not just the easy ones,\u201d Cunningham said.<\/p>\n \u201cA hospital that only accepts the easy ones isn\u2019t practising medicine \u2014 it\u2019s running a screening business.\u201d<\/p>\n He said under the Adeney model, the insurer sits between doctor and patient, deciding who comes through the door.<\/p>\n \u201cThe sickest patients are the reason hospitals exist. Build one that excludes them, and you\u2019ve built something else entirely.\u201d<\/p>\n This week, an anonymous group of anaesthetists hit back at the ASA, accusing their peak body of being \u201chijacked\u201d by corporate interests. They claimed the ASA was protecting established private hospital monopolies that faced significant financial disruption from the new competition.<\/p>\n \u201cOut\u2011of\u2011pocket expenses continue to limit access to private care,\u201d the anonymous group wrote in an email to the ASA seen by this masthead. \u201cModels such as Adeney… offer meaningful and immediate financial relief to thousands of Australians.\u201d<\/p>\n This masthead spoke to three of the members of the group, who requested anonymity for fear of reprisals.<\/p>\n One Melbourne anaesthetist said major hospital groups were panicking because the short-stay, zero-gap model was draining their most profitable patients.<\/p>\n Related Article \u201cEstablished private hospitals failed to accommodate a new model of care that\u2019s been developing over the past seven or eight years,\u201d they said. \u201cIt is the shorter cases that tend to make money for private hospitals. When you create an environment where you can undertake these short cases with no cost to the patient, it suddenly becomes incredibly appealing to both patients and surgeons.\u201d<\/p>\n They said anaesthetists within traditional hospitals were leveraging their influence within the peak body to stifle competition.<\/p>\n ASA president Dr Vida Viliunas defended the society\u2019s stance, rejecting the suggestion that the peak body was protecting the commercial interests of established hospital giants.<\/p>\n She maintained that the policy reflects \u201clongstanding principles relating to patient access, clinical independence, and the sustainability of the private healthcare system\u201d.<\/p>\n She said while the group had some concerns with the co-ownership model of private healthcare, it recognised that it could deliver benefits for eligible patients by reducing or eliminating out-of-pocket costs.<\/p>\n Ben Harris, director of policy and research at Private Healthcare Australia, said surveys had consistently shown that Australians were avoiding or postponing healthcare due to costs.<\/p>\n He said competition that delivered better value for patients should be embraced, rather than feared.<\/p>\n \u201cIf someone can receive the same high-quality operation with no out-of-pocket costs, it\u2019s difficult to argue that patients are worse off,\u201d he said.<\/p>\n He said treating lower-risk patients in facilities designed for lower-risk surgery wasn\u2019t cherry-picking.<\/p>\n \u201cIt\u2019s good clinical practice,\u201d he said. \u201cPatients with complex medical needs should be treated in hospitals equipped for that level of care. That\u2019s exactly how a safe health system should operate.\u201d<\/p>\n Start the day with a summary of the day\u2019s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n![\"Zoe](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/e00fd5a0eb5a666ef1ac751fc9adaf19602af79e.jpeg\")
Zoe paid no out-of-pocket fees to access adenoid surgery for her daughter Beatrix, 7, at Adeney Private Hospital.Photograph by Chris Hopkins<\/p>\n![\"Tamara](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/06\/1780782011_582_bb57b66e70aaef98d96bbfe774f5462a1fdad408.jpeg\")
<\/a><\/p>\n![\"Patients](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/547bd242888c786d4d22b9a8bed3aeae0203ff58d7ae07d9a83f9ece5e86c40d.jpeg\")
<\/a><\/p>\n![\"Victorian](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/4641f892e016f497640e0b07fb8f68e57e59e641.jpeg\")
<\/a><\/p>\n![\"Private](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/a186b0b5ca83cea40dee46976e7936ada6cb0449.jpeg\")
<\/a><\/p>\n![\"Henrietta](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/01\/1768828818_658_ad6900c08e1c63da0b4cf3ef0d03f64a1c4d476c.png\")
Henrietta Cook<\/a> is a senior reporter covering health for The Age. Henrietta joined The Age in 2012 and has previously covered state politics, education and consumer affairs.Connect via X<\/a>, Facebook<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Save You have reached your maximum number of saved items. Remove items from your saved list to add…\n","protected":false},"author":2,"featured_media":772085,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-772084","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/772084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=772084"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/772084\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/772085"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=772084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=772084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=772084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}