The proposal
Private Healthcare Australia (PHA) CEO Rachel David advocates for a "bundled care" maternity costing model where midwives, GPs, and obstetricians offer fixed-cost maternity packages. This model promises low-cost, full-transparency care across antenatal visits, delivery, and postnatal care – supposedly providing affordable options by allowing private midwives and GPs to manage low-risk pregnancies independently, in parallel with specialist obstetricians funded by the same bundled care model.
The hidden agenda
The critical question remains unasked: Why is the PHA, representing Australia's largest health funds (98% of the market, predominantly for-profit insurers), pushing so aggressively for this model? What benefits do PHA members, such as BUPA, which recently reported over AUD$900 million in profit in the Asia Pacific, have in strongly advocating for this funding model?
David's argument hinges on the uncited claim that only 14% of deliveries require an obstetrician, contradicting the Australian government's own data. Official AIHW statistics show delivery mode alone dictates that over 50% of births require specialist obstetricians before even considering complications like haemorrhage, perineal trauma or retained placentas.
The inevitable sequela
This bundled care model would trigger devastating consequences. Private maternity hospitals will not accept the legal liability of allowing midwives or GPs to deliver independently in their facilities, especially when private midwives are unable to obtain commercial liability insurance for intrapartum care. Even ignoring legal liabilities, what happens when the majority of births require clinical intervention beyond what these practitioners can provide?
Private obstetricians will withdraw from this unsustainable model. Anaesthetists and paediatricians, apparently unpaid under this framework, will decline participation. Few of these specialists will be willing to become involved in these compromised cases.
Over 50% of women requiring obstetricians and the 33% needing epidural analgesia will instead transfer to public hospitals to become public patients in order to access specialist care – no longer costing their private insurer, and losing the continuity of care this model champions. (A continuity of care currently provided by private obstetricians!)
26% of Australian babies are delivered in private hospitals. Shifting even half of these deliveries to the public system will overwhelm already stretched public maternity services, creating a genuine national crisis.
The economic reality
This capped model is economically unviable for private obstetric practices. This is not about "insufficient profit" rather, it's about businesses forced to operate at losses. Obstetric fees represent revenue covering rent, staff, midwives, nurses, ultrasound machines, other equipment, and 24/7 on-call coverage – resources essential for quality care.
Private obstetricians will instead shift practice to gynaecology and fertility. Sadly, private obstetrics will survive only in a handful of capital cities for a wealthy few willing to pay tens of thousands in out-of-pocket fees.
The safest option dismantled
The greatest tragedy? This proposal will dismantle Australia's safest maternity care model. Recent Australian research shows that babies born in the public system suffer double the mortality rate compared with private obstetric care, along with significantly higher rates of maternal haemorrhage, birth trauma and emergency caesareans. Surprisingly, this higher-quality private care was actually AU$ 5,888 less expensive per pregnancy than care in the public system.
The endgame becomes clear: private obstetrics ends. Private midwifery and GP obstetrics will shift the costly part of maternity care – deliveries and emergencies – back to public hospitals paid for by state governments. Meanwhile, the private health funds will successfully rebate vastly smaller amounts while collecting ever-increasing premiums, protecting their record profits at our maternity system's expense.
As we consider changes, we must ask: who truly benefits, and at what cost to mothers and our health system?
