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· Posted on
February 21, 2024

Medibank's built up a war chest to go from hospital funder to hospital owner

Medibank has been gradually making a shift from hospital funder to hospital owner.

What's the key learning?

  • Medibank first bought a 49% stake in East Sydney Private Hospital and made a deal to build a hospital in Melbourne
  • Medibank has unveiled a hefty $250 million war chest, some of which will be used for a third hospital for 'short stays'
  • The short stay model is a new type of private hospital business model where the goal is to provide a brief hospital stay and continue recovery at home

👉 Background: Medibank is one of Australia’s largest private health insurers. The company has two brands: your ol’ classic Medibank and your savvy no-frills AHM - and it covers more than 3.9 million people.

👉 What happened: Normally you'd think of a private health insurer as the company that funds a portion of your physio bill or private hospital stay... But Medibank has been gradually making a shift from hospital funder to hospital owner.

👉 What else: First Medibank bought a 49% stake in East Sydney Private Hospital, then it made a deal to build a hospital in Melbourne. Now the company has unveiled a hefty $250 million war chest, some of which will be used for a third hospital for 'short stays'.

What's the key learning?

💡 The short stay model is a new type of private hospital business model in Australia - but it has been popular around the world.

💡With the short stay model, the goal is for your hospital stay to be brief so that you continue your recovery from home.

  • It saves the hospital from reaching capacity
  • It saves you from eating mediocre hospital food
  • It saves the insurer from funding an extended stay in hospital

💡And clearly, the commercials stack up for Medibank too.

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