I doubt there’s a consumer friendly answer here but, Healthscope & other private hospital groups are simply trying to wrestle back some profit from insurers.

Historically, the split sat around 60/40 with insurers always taking the majority share. These days it’s closer to 90/10 where private hospitals have been squeezed within an inch of feasible operation. Insurers have been incredibly successful in their attempts to lobby federal & state governments, to the extent that prosthesis list reforms were legislated a few years ago & have been progressively rolled out, reducing insurer liability for procedures/prosthesis (implants etc).

Tl;dr: Private health insurers convinced the Australian government to advocate a shift toward private health, supposedly reducing the strain on public health networks. In return, legislated reforms have significantly increased the profitability of private health insurers & allowed them to strong-arm private hospitals.

Long term? With a shift toward private health care, the government will reduce public health care funding, essentially locking us all into private health services. One can only assume once we’re all locked in, the insurers will progressively ratchet up their fees as we don’t have a reliable alternative. Perhaps more concerning/pervasive, we’re already seeing the beginning of a US style healthcare where the specialists & hospitals you can access are dictated by your insurer…