Bundled Maternity Payments: A Dangerous Oversimplification of Complex Care

We wrote about bundled payments in February this year and as follow up, RANZCOG recently circulated an invitation to all members to provide feedback on a bundled maternity proposal put forward in a White Paper authored by Mandala and Private Healthcare Australia (the for-profit private health insurers lobby group).

NASOG has reviewed the Mandala/PHA proposal for a lead practitioner-led bundled payment model for maternity care.

While we support reforms that improve affordability and access for Australian families, NASOG cannot support a model that places financial, administrative and medico-legal burdens squarely on individual clinicians.

We also remind readers that this White Paper is directly informed by Recommendation 11 of the Scope of Practice Review Final Report—a report designed to address primary care access, not specialist maternity services. Attempting to restructure private obstetric care within this context is both inappropriate and dangerous. Private maternity care is a complex, specialist-led service with distinct clinical and funding structures. It is not—and should not be—treated as a branch of general practice.

You can read the full report, Unleashing the Potential of our Health Workforce HERE

Lead Practitioner Model: Unfair and Unsafe

The Mandala/PHA White Paper proposes that a single lead practitioner—whether obstetrician, GP or midwife—would manage the entire maternity journey. From a clinical and operational standpoint, this is both unworkable and unsafe.

Bundling maternity care under a lead practitioner introduces significant medico-legal ambiguity. Obstetricians already carry one of the highest indemnity burdens in Australian medicine. Expecting them to assume vicarious liability for every other provider within the care pathway—pathologists, midwives, sonographers and hospital staff—is unreasonable and uninsurable without full government indemnity.

No practitioner should be asked to bear this risk without robust protections in place.

Extra Administrative Burden is Not Clinical Leadership

In practice, this model requires the lead practitioner to establish and manage complex administrative systems—coordinating rostering, contracting, billing and compliance across multiple independent providers.

This is an extraordinary burden that shifts the role of the clinician to that of a contract manager. The additional costs of running such a system—staff, infrastructure, software—are ignored in the White Paper’s savings modelling.

Not Fit for Complex or Changing Care

We all know that pregnancy and childbirth is not a static or one-size-fits-all condition. Care needs often change dramatically across the course of a pregnancy. The White Paper fails to address what happens when a woman transitions from low to high-risk status.

Will she lose the benefit of bundled pricing mid-pregnancy?

Will she be penalised financially for requiring more complex care?

These unanswered questions highlight the disconnect between financial theory and clinical reality.

Equity Risks for Rural Women

Bundled care models also fail to account for the gaps in provider availability across rural and regional Australia. Without the full range of services needed to deliver integrated care locally, any “standardised” bundled fee may leave rural practitioners underfunded and patients underserved. Worse, rural women may be forced into any available model by default, depriving them of real choice of care.

A Better Path Forward

NASOG strongly supports systemic changes that would allow private health insurers to contribute meaningfully to out-of-hospital maternity care.

We also strongly endorse Government and PHI contributions of at least $3,000 each towards private maternity costs—though we note this figure is at the lower end of required support.

Any reforms to maternity care systems must incentivise access to private obstetric care, not jeopardise it. Further declines in private care will bring significant stress into the public sector.

Bundled payments must not devalue medical expertise, disincentivise specialists from practising or compromise the clinical autonomy of obstetricians.

NASOG continues to call for a dedicated, consultative review of maternity funding that is focussed on patient safety and increases access and affordability for women to choose their preferred model of maternity care.

Any solution must consider inclusion in the risk equalisation pool as well as Medicare and PHI rebates that reflect the true cost of care.

Most importantly, any proposed reforms must ensure that the safety of mothers and babies is never sacrificed on the altar of convenience.

Share Your Feedback

NASOG encourages all RANZCOG members to read the relevant documents and provide feedback on the Mandala/PHA proposal to the College by the end of this week.