3.110 The results of national governments raise a number of important questions about the impact of the reform law on the public hospital sector and highlight a number of problems related to new contractual agreements between public hospitals and funds. The Committee considers that, although the impact of the new regulations is not fully known for some time to come, given that substantial changes to public hospitals did not begin until July 1, 1996, the potential impact of these changes and possible unintended consequences must be addressed by the Commonwealth Government in consultation with state and territory governments. 3.88 In additional information provided to the Committee, Apha stated that hospital alliances would represent a significant proportion of the fund`s members by alliance. An alliance representing 30 percent of private beds in a state would provide services to about 20 percent of the members of each fund (the remaining 10% visit public hospitals as private patients). The Fund must “start sound negotiations with the Alliance to prevent 20% of its members from being disenfrancised.”  3.1 This chapter deals with issues relating to the implementation and implementation of contractual agreements under the Reform Act between physicians, private hospitals and health funds. Treaties are essential to achieving the stated objectives of the reform law, which have generally not been achieved, as outlined in Chapter 2. The chapter examines the issues raised in contractual agreements and proposes areas where legislation can be improved to achieve its contract objectives. This chapter also addresses the issue of “insuring gaps” and the impact of the reform law on the public hospital system. 3.12 Several groups of physicians have objected to the introduction of contracts to deter physicians from entering into these agreements. WADA and AAS advised their members not to sign contracts.
 The ADF stated that, while it does not advise its members not to enter into contracts, it does not advise “certain areas related to significant concerns and difficulties” in the context of the proposed contractual agreements.  A group, the Association for the Advancement of Private Health (AAPH), was established in 1995 in response to proposed changes to private health insurance and voted in favour of repealing the legislation.  HCF has agreements with many private hospitals to ensure that its members do not have a flaw in the services covered by their policies. If you opt for a non-participating public or private hospital, you may be charged some additional fees. 3.96 Sinclair Wornell and Associates (SWA) submitted that average physician fees would increase with an increase in the MBS levy if there was no agreement between health insurance funds and physicians. Premiums would also increase without patients who benefit.  Medibank Private also found that open non-guaranteed insurance, while allowing funds to offer products covering all costs, was a “fairly expensive product.”  3.54 organizations representing private hospitals were generally not opposed to the concept of contracting with health funds (contractual agreements have already been concluded in some states), although many argued that there was a need to improve negotiation processes and address the perceived market imbalance with respect to funds.  3.101 Several observations by the governments of the federal states have argued that the reform of health insurance has little incentive for health funds to enter into MPPAs with public hospitals.  The Victorian Minister of Health stated that some Victorian health funds had informed Victorian public hospitals that they “did not wish to enter into buyer agreements leading to serious competition between public and private hospitals.”