Health fund chief sought veterans' medical records
MARK DAVIS NATIONAL EDITOR
September 12, 2009
MARK FITZGIBBON, the brother of the former Defence Minister Joel Fitzgibbon, asked the Federal Government to give his health insurance company, NIB, confidential records on military veterans' medical treatment to work out ways of cutting costs.
Documents obtained under Freedom of Information legislation show the NIB chief executive wanted the Government to outsource management of veterans' health entitlements to his company and the American-managed healthcare giant, Humana.
They show Mr Fitzgibbon believed outsourcing would generate substantial reductions in the Government's $5 billion a year military healthcare bill and proposed that the savings be shared between the Government and his company.
But senior Defence officials warned ministers that NIB's motive in seeking military healthcare contracts could be to secure a commercial advantage in selling private health insurance products to personnel leaving the defence forces.
The Minister for Veterans Affairs, Alan Griffin, eventually rejected the NIB chief's proposals, citing privacy rules and questioning the company's experience managing care for elderly veterans.
The talks between NIB and the Government last year led to Joel Fitzgibbon's resignation as Defence Minister in June.
The former defence minister had referred his brother to the Veterans Affairs Minister and the then Defence Personnel Minister Warren Snowdon to avoid a conflict of interest. However, he resigned when it emerged one of his staff members attended meetings with NIB executives to discuss the proposals.
At the time, few details were disclosed publicly about NIB's proposals.
The documents obtained by the Herald show Mark Fitzgibbon wanted to secure a contract to manage Veterans Affairs' claims adjudication and payments processes.
He proposed this would be a pilot project to demonstrate cost savings the company could achieve elsewhere in military healthcare.
The documents show Mark Fitzgibbon wrote to his brother in June 2008 saying there was ''tremendous potential for your government to significantly reduce military and veteran healthcare outlays without in any way compromising personnel health outcomes and satisfaction''.
The head of defence health services, Major General Paul Alexander, prepared a ministerial submission for Mr Snowdon which said NIB's motive might be to market its health insurance products to ADF personnel.
The general said 73 per cent of ADF members were in NIB's target market of 20- to 39-year-olds without private health insurance.
''Any formal association with Defence and the Department of Veterans Affairs through this proposal could be mistaken for official endorsement of NIB Holdings' health insurance products,'' the submission said.
After a meeting with Mr Griffin and Mr Snowdon in August last year, Mark Fitzgibbon wrote to the Veterans Affairs Minister requesting the Government's contracts with healthcare providers and five years of data showing treatment details for all veterans. This letter was copied to Joel Fitzgibbon.
Mr Griffin replied saying the information was protected under privacy legislation and the Government's contracts with healthcare providers.
The NIB chief replied with advice from lawyers Mallesons Stephen Jaques on overcoming the privacy and contractual constraints as well as issues involving government procurement.
Mr Griffin responded in February again rejecting the proposal and casting doubt on NIB's expertise in managing healthcare for elderly veterans.