This position statement outlines the Australian Medical Association’s (AMA) position on the principles that should govern private health insurer contracting with doctors. The AMA is increasingly concerned about the lack of regulation governing contracts between insurers and medical practitioners – particularly their potential impacts on patient choice and quality of care, the clinical autonomy of doctors in private practice, private hospital case mix, and other health professionals involved in the patient’s care.

Currently, approximately 97% of medical procedures performed in private hospitals are conducted by doctors working under ‘no gap’ or ‘known gap’ agreements with private health insurers. At present, there is no fit-for-purpose regulator with the mandate or resources to set the rules for contracting arrangements between private health insurers and doctors, or to provide adequate oversight of how these contracts are evolving.

The paper outlines the concern that this lack of regulation and oversight is leading Australia toward a future in which medical costs are controlled by funders limiting the services doctors and hospitals offer. If Australia is to maintain its record as having one of the best healthcare systems in the world – where patients have both choice of provider and excellent health outcomes – any further shift toward managed care must be prevented through effective regulation of what private health insurers are permitted to do to control their costs.