Health funds have called on the Federal Government to expand their powers so they can have more “freedom” to choose which doctors and hospitals they reimburse.

The request comes as part of a Federal Government review of the industry. In its submission to the review, the Australian Health Insurance Association (AHIA) argued that funds should have the freedom to decide which service-providers they reimburse, rather than being forced to cover them all.

The AHIA represents 90% of the private health insurance industry, including the big players like Medibank Private and MBF.

AHIA CEO Russell Schneider said insurers want the freedom to stop funding poor-quality hospitals.

The submission also said the funds won’t be able to cope with continually rising costs. They point to figures showing a 50% rise over four years in day-surgery procedures.

Warning that the funds must be able to control their claims costs, Mr Schneider said the providers’ interest is in income maximisation. “Our interest is in cost minimisation.”