Melissa Lyon, Adrienne Trumbull and Rachel Varghese
2021 is looking bright at Hive with these senior appointments
Hive is finishing off 2020 with this awesome news…
2021 will see Adrienne Trumbull promoted to Principal, Melissa Lyon to Executive Director and Rachel Varghese to Senior Associate at Hive.
Adrienne Trumbull’s ability to build great relationships with clients is evident, especially when you hear clients say ‘we love Adrienne’s willingness to get to know us, what we do, how we do it and what we are about… it makes our lives so much easier’. She assists clients in the health, consumer goods, energy, infrastructure, IT, and telecommunications sectors with their corporate and commercial needs and brings a mix of exceptional legal skills, commerciality and a commitment to working with clients in a way that works for them. This has included further developing our HiveGC+ resourcing option for clients  to provide expanded areas of support, and price certainty through value pricing. Adrienne says ‘having worked in-house, it’s important to me to not only have a great relationship with clients, but also a deep understanding of their business and priorities .  I love that HiveGC+ reflects this and creates a genuine alternative to the traditional external adviser/ in house resourcing dynamic.’
On her Principal role, she says ‘I am so proud to be joining an amazing group of principals leading an exceptional team.  I love Hive’s collaborative mindset, both with our team and our clients,  and I’m honoured to be able to play a role in the future of the firm’. Joanna Green, Principal says ‘ It is rare to see the combination of technical skills and broad experience, mixed with the pragmatic, commercial and calm approach Adrienne brings to the firm and to our clients. Everyone loves her and feels confident when she is leading a matter that they are in safe hands.  Adrienne is a great promoter of Hive and its values, internally and externally, and it is exciting to celebrate her promotion to Principal’.
 Promoting Melissa Lyon to the Principal group reflects Hive’s progressive approach to the delivery of legal services and our focus on improving the experience for our clients. Melissa, who was named Innovator of the Year at the 2020 Australian Law Awards, will continue to build Hive’s consulting practice which provides service, product and strategy design and legal ops assistance using its design thinking based framework, HiveThinkP. As a long-time proponent of the concept of multi-disciplinary teams and the power of collaboration Melissa says she is ‘really excited to be able to provide our clients with a blend of skills that reach beyond legal and provide a much more holistic service offering. It is also extremely fulfilling to be part of a firm which recognises that to improve the experience for our clients we need to think differently about their needs, draw together people with the required skills and design better and creative outcomes to address those needs. I am extremely proud and grateful to work with people who have the right purpose and mindsets to ‘change things up’ in our industry.
Melissa’s hope is that in the future we will see more firms providing career paths through to the Principal level for people with skills ‘other than legal’ as it will make for a ‘much better experience’ for them and our clients.
Mitzi Gilligan, Principal, says ’Melissa is the embodiment of Hive’s purpose, vision and values.  Bringing her into the ownership group is recognition of the fact that a law firm’s success is not only driven by its practising lawyers’.
Seeing our lawyers thrive means a lot to us at Hive. ‘Over the past 5 years, Rachel Varghese has developed a level of technical expertise in energy law and a depth of understanding of our clients’ businesses that is extremely rare and a source of inspiration to her Hive colleagues’ says Andrew Brookes, Principal.  She is already considered a trusted expert by our energy clients, known for her ability to solve complex regulatory and contractual problems and her exceptional communication and drafting skills. She works closely with key players in the Australian energy sector providing assistance on complex energy regulatory matters, energy market disputes, major energy contracts and projects. Her positive impact extends well beyond her legal work. Rachel is unusually generous in sharing her knowledge and supporting other young lawyers.  She is a major pro-bono contributor, as coordinator of Hive’s Refugee Legal volunteer program and she is also Victoria’s current representative on the national young professionals committee of AMPLA (the energy and resources law association). Rachel says ‘I am excited to be taking the next step in my legal career, and extremely grateful to the mentors I’ve had along the way and the wonderful team that I work with. It’s incredibly rewarding to be doing work that I enjoy, and collaborating with a diverse and highly skilled group of people who all share Hive’s goal of improving the experience of its clients and employees. The firm, and our energy practice, have grown so much over the last few years (weathering the difficulties caused by Covid-19 brilliantly) and I look forward to seeing what 2021 and beyond has in store for us’.
 

2020 – It’s been quite a year! Thanks for sharing it with us

Snapshot
On 20 August 2020, the Federal Court handed down its orders in ACCC v HealthEngine Pty Ltd [2020] FCA 1203.
The orders confirmed that:

HealthEngine’s publication practices in relation to patient reviews, and its referral arrangements with third party insurance brokers, amounted to multiple contraventions of the Australian Consumer Law (ACL); and
these contraventions warranted the imposition of penalties of $2.9M.

These orders are significant for any organisation with consumer-facing offerings – but especially those with a digital presence and the capacity to influence consumer behaviour.  This case shines a (very bright and expensive) light on the need to provide consumers with accurate, detailed and transparent details when obtaining consents and providing information.
It’s also interesting to see the ACCC having pursued action in relation to a misleading disclosure of personal information, in circumstances where the disclosure may have technically complied with the Australian Privacy Principles and accordingly, not been pursued by the Information Commissioner.  This serves as a good reminder to ensure that consent provisions and other consumer-facing communications comply with consumer protection laws (particularly those which relate to false or misleading and deceptive conduct), as well as relevant privacy laws.
The conduct
In 2019, the ACCC initiated proceedings against HealthEngine regarding a number of alleged breaches of the Competition and Consumer Act 2010 (Cth) (CCA).
HealthEngine operates an appointment booking service (together with a related marketplace) for primary healthcare providers.
The two key practices which the ACCC took issue with were:

the ‘Review and Ratings Conduct’:HealthEngine published feedback it received from patients on its website and app in the form of “patient reviews,” however failed to communicate to consumers that it was:
 

not publishing negative patient reviews;
editing patient feedback before it was published; and
in terms of ratings, publishing a “no rating” statement if less than 80% of patients said they would recommend their practitioner – indicating that there was insufficient data to provide a rating (rather than providing the actual rating); and

the ‘Referral Conduct’:HealthEngine failed to make it adequately (that is, expressly) clear to some patients that it was disclosing their personal information to third party insurance brokers. In this regard, HealthEngine:
 

collected non-clinical personal information from patients who used the booking service;
asked relevant patients if they wished to receive a phone call in relation to health insurance comparison services, or to assist them with assessing their private health insurance needs; and
shared the above information with one of nine insurance brokers, however did not make it adequately clear to patients that if they said ‘yes’ to the relevant questions, their information would be shared in this way.

The Federal Court orders
The Review and Ratings Conduct:

was misleading and deceptive, in contravention of s 18 of the Australian Consumer Law (ACL); and
was false or misleading as to HealthEngine’s service being of a particular standard, quality, value or grade, in contravention of s 29(1)(b) of the ACL.

The Referral Conduct:

was misleading and deceptive, in contravention of s 18 of the ACL; and
was misleading as to the nature, characteristics and/or suitability (for its purpose) of HealthEngine’s service.

The penalties
The Federal Court ordered that, pursuant to s 224(I)(a)(ii) of the ACL, HealthEngine must pay a pecuniary penalty of $2,900,000 in respect of their contravention of sections 29 and 34 of the ACL, in four installments of:

$750,000 within 6 months;
$750,000 within one year;
$700,000 within 18 months; and
$700,000 within 24 months.

HealthEngine was also subject to non-punitive orders. These included an annual review of HealthEngine’s ACL compliance program for three years at HealthEngine’s expense, and to ensure that the review was carried out by a suitably qualified, independent compliance professional with expertise in competition and consumer law.
HealthEngine was also ordered to contact affected customers by email (all patients whose personal information was provided to the insurance broker) with the information that their personal information was provided to an insurance broker and may have included their:

name;
phone number;
email address;
date or year of birth;
appointment time; or
the type of health care professional the booking was made with.The email was also required to include the identity of each insurance broker to whom the personal information was provided, and to explain that HealthEngine’s conduct had been found to be in breach of the ACL.

HealthEngine was also ordered to pay ACCC’s costs of, and incidental to, the proceeding, fixed in the amount of $50,000.
Please let us know if you have any queries, or would like our assistance in reviewing any consumer-facing materials or privacy collection statements/policies in light of the above orders.

Ella Cannon
Associate Principal
[email protected]

Sid Nair
Paralegal
[email protected]

Congratulations Jenny Taing OAM
We are super proud of Hivester Jenny Taing who recently received a Medal of the Order of Australia (OAM) on the Queen’s Birthday 2020 for service to the financial and investment sectors and to the community. Before joining Hive Jenny worked at Vanguard as the Head of Product Implementation and prior to that as a lawyer at the Australian Securities & Investments Commission. She is now a valued member of Hive’s team where she advises our clients on financial services law with particular interest and specialisation in product launches of managed funds and exchange traded funds (ETFs).
This award is also recognition of Jenny’s absolute passionate for being involved in, and contributing to, the community. She has been sitting on boards and committees for over 10 years and is currently on the board of the Australian Health Practitioner Regulation Agency (AHPRA) and the Western Bulldogs Football Club Community Foundation. Jenny was the winner of the University of Melbourne Faculty of Arts Rising Star Alumni Award for 2014, awarded for her commendable leadership and outstanding contribution in the fields of Public Health, Multicultural Policy and Journalism. She was also recognised as one of Australia’s young leaders, appearing on CPA Australia’s Top 40 Young Business Leaders List for 2013.
Congratulations Jenny, you are an inspiration!

May 2020 We are all missing something as we change the way we work and live during COVID -19. It may be seeing family and friends, working in the office, your normal routine or just the comfort of working how you always have.  That is all very understandable but there is something else you may […]

A Fast Changing Health – Tech Sector. Hive Legal’s snapshot of some key changes coming out of COVID-19 and our predictions for what’s next.

We hear it time and time again.
Your team is overwhelmed.
You are so overloaded by the day to day that you barely have time to sign off on new projects, let alone spend the time to think strategically about how to do them differently.
You need more people, yet you don’t know how long the deluge of work will last for.
Or you have some months where you are overwhelmed and others where work is manageable.
You would love to spend time working out ways to work more efficiently in the current COVID-19 world but simply don’t have the time, energy or headspace to be creative.
You’re not actually sure if it’s Tuesday or Thursday.  Oh, and now you’re working from home and home schooling.
There are a few options that might cross your mind in the spare 10 seconds you have before you fall asleep.
1. Hire someone new
If your budget allows for this, then hiring a new team member may be a genuine option.  But this can present difficulties if you don’t know the person or know if you’ll have enough work for them long term.  In addition, you’ll need to factor in the time and costs of training them and supporting their salary and entitlements long term, so it’s not a simple salary cost to be factored in.
2. Hire a contractor or secondee
Aha, so I will look at a short term solution!  Hiring a contractor or secondee for a fixed period may certainly provide benefits where you are looking to address a short term gap.  You can contract them for the period you need them, and often extend the arrangement where your needs justify the commitment.  You can also direct the contractor/ secondee to the areas where they are most useful in the business – for example picking up the procurement work or taking on someone’s role as a parental leave cover.
However, on the downside, where contractors and secondees are a single individual with a fixed set of skills and experience, once their contract ends, their knowledge of the business disappears with them.  These arrangements are not designed to be long term solutions, and there is no guarantee that the individual will continue to be available to you in the future.  While seconded individuals may still provide a service from their law firm post-secondment, the knowledge will be with them specifically, and will come at an unknown fee to you if you want to keep tapping into it down the track.
3. Retainers
So what is the answer?  An innovative option you might consider is engaging legal services from a team on a retainer basis.  This may be a similar arrangement to a secondment, but rather than relying on the services of a single lawyer, you have access to expertise and business understanding across a team.  This allows you to solve your resourcing problem longer term, but with the same benefit of being able to turn it off and on, or up and down, as your business needs change over time.
In addition, you get the benefit of having a fixed price regardless of volume – giving you budget predictability, and the ability to spread your costs across the year regardless of peaks and troughs.
The Hive Approach
Shortly after Hive was founded (over 6 years ago), we recognised that many of our clients required a solution for legal resourcing and assistance which reflects the varying nature of business needs that more of us are now facing.  We designed our HiveGC+ offering with exactly these needs in mind:

Providing a central contact point but with servicing from a team of legal professionals, from paralegals to principals at a fixed cost;
Having the entire team committed to getting to know and understand the business at no additional cost;
The ability to flex the team to your needs in terms of availability to you, size and skill set;
Access to creative thinking about ways to improve your processes and operations;
Providing resourcing support and working as a team virtually, something we have been doing for many years, not just since the world changed as a result of COVID – 19; and
Regular check in points so you can trial different arrangements as your needs change.

For our HiveGC+ clients, no arrangement is identical, but each provides them with the flexibility to meet their legal needs as and when required without concerns about what happens when an individual leaves them, or how much it will cost them long term.  Internally, we love it.  We love having the chance to really get to know a business without concern about how much time we’re spending doing it, and working hand in hand with commercial and in house teams.
Nothing is permanent, and this has never been more true than now.  If you do find yourself at this pain-point, know that options are available to you, but they may be outside of the traditional solutions.  Trying an innovative flexible approach now will put you in good stead to get through the upcoming months, and who knows, it may just be an ideal permanent solution.
There is no doubt this is a challenging time both for individuals and businesses.  If you would like to discuss how we can help with your flexibility, feel free to contact us at [email protected].
 

You may have been considering working remotely for a while.  Perhaps you have been working a day here and there from home.  But it is difficult to prepare for a significant period of lockdown where your team, who you ordinarily sit with each day, is now operating on a totally remote basis.
On the basis of our experience at Hive Legal, where we have been operating with remote teams for over six years, we thought it timely to share some tips on how you can continue working effectively when you are managing a remote team.
1. Set up the communications tech
While laptops and mobiles are important, ensure your team has programs in place which allow easy virtual communication.  This includes functionality for video conferences (eg Skype, Zoom), and quick messaging systems (eg Slack, WhatsApp).
When you first start working from home it is natural to revert to the tools that are used within the physical office.  However meetings without visibility can be tricky – you can’t tell when someone is about to say something and you can’t tell whether anyone is engaged in what you are saying.  It can also feel very intrusive to call someone unannounced when you are used to being able to see across the room whether they are busy or not.  Without face to face contact, you need to make a conscious effort to create those opportunities to see each other’s faces, and to be able to engage in communication that doesn’t feel as formal as an email or a phone call.
What’s worked for us: holding team meetings by video conference and having a ‘social chat’ WhatsApp group across the firm.
2. Be clear on who is doing what and when
Your team may be used to working together, but without sitting near each other the cues we take from facial expressions, seeing people’s reactions to emails received, and joining last minute phone calls, we may not all have the same clear view of what actually needs to be done.  Even more so than when working together in person, you need to be very clear on what you are asking team members to do, what others are doing which relates to it, when it needs to be done by and why they are doing it.
What’s worked for us: setting out new matter instructions in an email paired with a phone call to talk through any questions.
3. Create a culture of trust
When you can’t see each other working there can be nervousness from both ends – from managers who aren’t sure how much their employees are working and from employees who aren’t sure if their work is being seen.  Start from a foundation of trusting that your team will get their work done, and acknowledge to employees when you see they are working hard.   This can be as simple as an email telling them they are doing a great job, but it does get noticed.
What’s worked for us: focussing on outputs rather than time spent.
4. Check-ins
Without seeing one another every day it is very difficult to know what is going on in the broader context of your team’s lives.  You can’t tell from people’s faces if they seem stressed, and you can’t see them at their desk late at night and know they have too much on their plate.  You can’t see them arriving to work with flowers and know they are celebrating something, or ask them about their weekend as you head past their desk.  On the team member side, it is easy to feel isolated and that no one is looking out for you.  Regular, scheduled check-ins with both the team as a group and each team member individually are important – both to be aware of their work items, but just as importantly to make sure they are ok.
What’s worked for us: having both a team meeting weekly and individual/ team member catch ups fortnightly.
5. Transitioning from the work zone
Without actually arriving and leaving an office, your workplace and your home life can become truly intertwined.  And while this has many benefits, it can also mean that is difficult to switch off.  You may need to take active steps to switch off in a way that you previously have not had to – for example being clear about when work is actually done for the day, and putting technology out of reach.  It will also help if you have a dedicated work area at home, ideally that you can close the door once your work day is finished, so that you have some physical separation from ‘work’.  For others, a transition routine may be required – for example going for a walk around the block or finalising tomorrow’s to do list, to mentally close out the day.
What’s worked for us: Encouraging team members to have a switch off point and dissolving the expectation that they must be available at all times.
There is no doubt this is a challenging time both for individuals and businesses.  If you would like to further discuss how you can better prepare for your team working from home, feel free to contact us at [email protected].

What traditional law firms can learn from conscious capitalism ~ Christian Duperouzel
In the first part of a three-part series, Dr Christian Duperouzel examines the notion of conscious capitalism and explains why contemporary law firms need to integrate principles of conscious capitalism into their workings if they are to succeed in the new economy.
Read more:
Part one: Creating the conscious law firm: What traditional law firms can learn from the conscious capitalism movement

We are excited to announce that Anna Peddey has been promoted to Senior Associate. Since joining us in 2018 from Gadens, Anna has slotted in beautifully to the Hive with her practical and client focused approach to delivering legal services to our clients. She is an experienced commercial and regulatory lawyer who specialises in highly regulated sectors including government, health and transport. Her experience includes advising both private and public sector clients on contracts and procurement, commercial transactions, competition and consumer law and privacy issues.
‘One of Anna’s many strengths is her ability to work seamlessly and flexibly with clients to provide them with the assistance they need. This is demonstrated by a number of successful virtual and in-house retainer arrangements that she has undertaken with our clients. She is also a thorough lawyer who has the ability to delve into complex legal issues whilst at the same time finding practical solutions which is something that we really value at Hive’, says Joanna Green, Principal.
In 2019 Anna completed a four month combined in-house and virtual arrangement with a Victorian Government client which was adapting to a restructure. During this innovative arrangement Anna worked closely with the in-house legal team, as well as other business stakeholders, advising on a range of matters including a large scale procurement, BAU procurements, a high volume of funding agreements, interagency agreements and a range of regulatory matters.
‘Working at Hive offers a unique combination of challenging regulatory, commercial and strategic work in a creative and relaxed environment. Flexible working arrangements, fixed fee pricing (with no time recording) and a highly skilled, motivated and collaborative team contribute to a positive workplace. This combination minimizes additional stresses commonly associated with complex legal work, and enables our team to deliver focused, innovative, high quality solutions. I’m grateful to be taking the next step in my career at a firm whose values I share’, says Anna.
Congratulations Anna!

October 2015
Two growing farming sectors – Genetically Modified Foods and Organic. Both have the potential to contribute significantly to our economy and export market. But is the very existence of these two important sectors at risk?
Tensions between both farming sectors have been increasing as organic farmers try to protect their business from GM contamination, including by taking legal action against the GM sector.
The recent WA Supreme Court of Appeal decision in Marsh v Baxter (3 September 2015) has significant implications for agribusiness and policy makers.
Marsh v Baxter was a case involving two farmers, Mr Baxter growing Roundup Ready canola and the Marshs growing organic cereal crops and sheep. In 2010, Mr Baxter adopted a harvesting technique called swathing whereby he cut, stacked in windrows and left to dry his GM canola crop. Some of the cut plants were blown by the wind onto the Marshs’ property and 70% of Marshs’ property was subsequently decertified as organic by the certifying body NASAA, with whom the Marshs had a contract.
The Marshs did not grow organic canola. There was no risk of genetic contamination (which could only occur if GM canola seed germinated in Marshs’ property and then later cross fertilized through its pollen being exchanged with another compatible species (another canola variety).
Due to the decertification, the Marshs could not label their produce “NASAA Certified Organic” and brought two causes of action against Mr Baxter, in negligence and private nuisance, claiming $85,000 in loss of profits. The Marshs failed to establish both causes of action at first instance and on appeal by a majority of two to one.
The Marshs argued that Mr Baxter had a duty to take reasonable care to ensure GM canola was not blown over to Marshs’ property and to avoid economic loss. This meant they should have harvested differently (by direct heading instead of swathing).
On appeal, the majority said the “Notice of Intention to Take Legal Action” the Marshs’ provided to Mr Baxter prior to harvest time putting Mr Baxter on notice of the risks of possible contractual decertification in the case of contamination was not enough to establish actual knowledge and foresight that the Marshs were at risk of decertification and economic loss if Mr Baxter harvested his GM crop by swathing. This was particularly the case where it was difficult to know with any certainty the private contractual rights of NASAA to decertify.
The court also found the Marshs knew of the risks of GM transference risk and were in a position to mitigate the risks themselves (for example, buffer zones, sanitation, record keeping and testing). In the circumstances, no duty of care could be established.
If there was a duty to ensure the swaths were not blown and to avoid economic loss, the court held the Marshs failed to establish that a reasonable person in the position of Mr Baxter would have taken the precaution, for the benefit of the Marshs, of direct heading rather than swathing.
In relation to nuisance, the court held it was relevant that Mr Baxter did not deliberately cause the swaths to be released on to Marshs’ property, the decision to swathe was based on legitimate agricultural considerations, and without expectation of an incursion, canola farming was a common and ordinary use of land in the district, swathing was a conventional method of harvesting, the relationship between Marsh and NASAA was relevant as was the purely economic nature of the loss and absence of physical damage to Marshs land (because of no genetic transfer risk). The claim therefore failed. Alternatively, the court held Marshs’ claim failed on the basis the organic farming operation was abnormally sensitive to an incursion of GM canola.
The minority judgement of the President of the Court of Appeal, Justice McLure found both causes of action established. Her Honour considered the contractual arrangements to be an integral part of the export control regime, interpreted “contamination” in the NASAA Standard in the broad sense to include not just genetic contamination but the presence or use of GMOs in an organic farming system and found decertification by NASAA was open to NASAA and based on reasonable grounds. The factual cause of the loss was not the NASAA contract which incorporates the NASAA Standard, but the escape of the GM canola swaths from Mr Baxter’s property to the Marshs’ property.
Unless there is an appeal to the High Court, and the decision is overturned, the majority judgment stands.
Depending on the terms of the contracts with the certifying bodies and the applicable Standards, organic farmers are at risk of losing organic certification of their crop and livestock if their property is contaminated by Genetically Modified Organisms, suffering huge financial losses. They may be unable to recover losses from the relevant GM farmer in circumstances similar to Marsh v Baxter.
However, the GM sector may not necessarily be free of liability in all cases. In Marsh v Baxter, there was no risk of genetic contamination because Mr Marsh did not grow the same crop (canola). Should risk of genetic contamination arise in a future case, the legal outcome may be different.
What does this mean for the Agribusiness sector?
Agribusiness will be watching any government response (at Commonwealth and State levels) to the Supreme Court of Appeal’s decision very closely.
In the meantime, organic farmers should familiarise themselves with the National Standards, the contractual arrangements with their certifying body and the Standards they issue. Legal advice can assist with interpretation of the relevant Standards and understanding where an organic farmer stands contractually with the certifying body. They should also identify possible sources of contamination, proximity, possible modes of transfer and adopt appropriate risk mitigation measures.
Conversely, despite the outcome in Marsh v Baxter, GM farmers should be on alert as to their potential exposure to legal liability particularly in the case of genetic transfer risk, and what they need to do to minimise risk.
In both cases, consulting agronomists, farming experts and government is essential. Risk mitigation will go some way to helping the genetically modified foods and organic foods industries co-exist.
This is for general information only and formal legal advice should be sought on matters of interest arising from this article.

Giovanna Tivisini

Snapshot
The number of patients with private health insurance electing to use their insurance when being treated in a public hospital has increased over the past 10 years. During this time, it has become a sensitive and hotly debated topic, especially leading up to the recent federal election and expiry of the National Reform Health Agreement and Nationally Efficient Price Determination on 1 July 2020.
Joanna Green, Principal at Hive Legal, recently facilitated a panel of high profile panelists at the Informa Health Insurance Summit in Sydney to consider the impact of this issue, its pros and cons, and potential causes and solutions. Here’s a summary of the issue, and our take on how it might be addressed.
Summary
With the incidence of private patients electing to use their private health insurance in public hospitals (PPIPH) arguably on the rise, it’s clear that this has the potential to significantly impact how hospital treatment is provided (and paid for) in Australia.
Given competing views and tensions about this issue, there have been a range of suggestions made about the actual incidence of PPIPH, underlying causes, positive and negative impacts, and proposals for future management.
Is it a problem?
PPIPH starts with the Medicare Principles that underpin the funding of Medicare, including that patients should have a choice to be treated in a public hospital for free (even if privately insured) and ought to be treated on the basis of clinical need. The level of care for private and public patients is required to be the same. Accordingly, a patient should not be prioritised or treated differently because of their insurance status.
Attendance in both public and private hospitals of all patient types is on the rise, and since 2011 there has been an increase of:

2.7% per year of public patients in public hospitals; and
4.5% per year of private patients in private hospitals.1

However, the incidence of PPIPH appears to have increased annually at an average rate of 10.5%, approximately 2-3 times the increase of the other types of patients.2 There are also certain categories of patients which appear to be increasing at a more rapid rate, such as patients who are admitted via the emergency department, as compared with elective surgery.3
Additionally, hospital data appears to show that private patients may be prioritised over public patients with similar clinical needs, that private patients may be more likely to be assigned to more urgent categories for admission, and that they may be more likely to receive medical procedures while in hospital.4 We appreciate, however, that there may be explanations for this and further relevant context to understand.
Within these observations, the rates of increase of PPIPH do tend to differ across Australia. Some States and Territories have policies for hospitals to achieve specific targets for ‘own source’ revenue, and it’s reasonably likely that such incentives might result in ‘conversion’ of admissions to private by public hospitals.5
The negative impacts of the PPIPH can be intangible and difficult to conclusively determine. Some of the arguments in this regard are that PPIPH can or does result in:

increasing PHI premiums due to benefit payments that would otherwise not be claimed
longer public hospital wait lists
increased ‘cost shifting’ from the Commonwealth to the States and Territories
lack of Informed Financial Consent and unexpected out-of-pockets, including pathology and radiology

Some particular public hospitals have a notably higher percentage of private patient admissions. This growth has occurred even in cities and regions where there are well established private hospitals offering a comprehensive range of services. Some hospitals have encouraged patients to elect to use their PHI with brochures, and staff employed specifically to find patients who can elect.6
What are the benefits?
Despite the potential risks and issues with PPIPH, it’s clear that there are also a number of benefits from this hospital setting flexibility, including:

increased choice for patients of hospital, doctor, and access to the right clinical setting
lowered costs for patients with less out-of-pocket costs and excesses waived by the hospital
benefits for the public hospital with increased Medicare and private health insurer payments, attraction of more and better clinical staff, better services with the increased revenue for building and infrastructure, more funding for research and educational programs for junior doctors, and funding for new services for public patients
private health insurers benefit from an expansion of members’ choice of providers, services become available in areas not easily reached by private sector providers, and public treatment being a potentially cost-effective option for members, with reduced expenses for insurers with likely shorter stays

What is causing private patients to elect?
There are a range of arguments being put forward as to why PPIPH is on the rise. One primary argument is that, with funding being stretched for many public hospitals, there may be an incentive for those hospitals to seek or encourage their private patients to elect.
It’s also possible that the Commonwealth Activity Based Funding model introduced in 2012, which pays for the number and mix of patients to encourage efficiency, has contributed to the increase of PPIPH. This model was not intended to incentivise the treatment of PPIPH and in fact, attempts to discount private patients by two adjustments. However, it has been suggested that the model has been implemented differently across the States and Territories, sometimes with added targets or incentives for private patient revenue for hospitals, and sometimes with private patient adjustment factors not apparent or not being applied.7 The only jurisdiction which has fully applied the model is the ACT, but there has still been significant growth of PPIPH in the 3 years since the funding was agreed.8
An increase of basic or “junk” PHI policies may have also been a contributing factor. As these policies have lower cover than their “gold”, “silver” and other higher tier policy counterparts (in an effort to make PHI more accessible for everyone), they have exclusions which can significantly reduce their members’ hospital cover.
Factors such as lack of rural access to private hospitals is commonly cited as a reason private patients elect in public hospitals. However, some data reviewed does suggest that there is no correlation with the presence or absence of a private hospital in the area: even where regional hospitals admit comparatively high percentages of private patients, these numbers are lower than those in many metropolitan hospitals.9
It’s also possible that lack of patient understanding as to their PHI policy coverage might contribute to some of the potential negative effects of PPIPH. Many patients, when posed the question of whether or not to elect, are unsure of the benefits and costs of doing so (and sufficient information about this may not be readily available once in hospital).
And finally, doctor remuneration models also arguably contribute to private patients electing. Doctors may be financially incentivised to treat their private patients in a public hospital as they may be entitled to a payment from the hospital, as well as Medicare and private health insurers.
How can the incidence of private patients in public hospitals be reduced?
There is no shortage of proposed ways to reduce the incidence of PPIPH. Some of these are:

removing the rebate from basic or “junk” policies: low cover policies with significant exclusions are currently 37% of all hospital policies on offer. Regulatory reform to improve the value of those PHI policies which are permitted to be made available, and a minimum level of policy coverage to attract the 30% government rebate, may reduce the incidence of these policies;10
improving informed financial consent: there have been calls for the hospital or admitting doctor to be legislatively required to ensure patients are advised about and understand the potential out-of-pocket expenses they may face (including pathology and radiology costs) and their rights regarding election, prior to any such election being accepted. This could involve providing summaries of rights to patients, and a “checklist” of conditions for a valid PHI claim (for example, making sure the patient has been offered a transfer to a private hospital, been educated as to their rights to be treated as a public patient, etc);
increasing transparency, reporting, and competition amongst private hospitals: data suggests that private hospitals do not have as much incentive as public hospitals to increase efficiency and improve performance.11 Therefore, more public reporting from both private hospitals and public hospitals is needed to monitor their performance and to guide policy decisions, and to better ensure consumers, insurers, and governments are maximising their healthcare financial investment;
prohibition of patients electing to be private after they are admitted: patients are currently able to be approached at ‘the earliest opportunity’, however sometimes this means they are approached after admission, but are able to retrospectively recover any costs incurred since admission. It is suggested that this would avoid patients making a decision while in a vulnerable position after already in hospital. This could involve:

retrospective admission being prohibited from covering the period between admission and election;
patients being prohibited from electing to be private after admission via the emergency ward; and
approaches being made to patients during or after discharge being prevented;

preventing hospitals waiving excesses: public hospitals sometimes waive excesses which are payable under the patient’s policy, therefore increasing the incentive for private patients to attend them;
altering the funding and incentive models: the Activity Based Funding model could be further adjusted to take account of private patient revenue. Additionally, Commonwealth and State funding agreements are not binding on the amount of funding States and Territories can allocate to subsidise private patients. Therefore, financial incentives remain for public hospitals to have private patients elect. Future agreements could require public hospitals to comply with the same data reporting requirements as private hospitals, and give power to the Independent Hospital Pricing Authority to create larger and backdated discounting to the National Efficient Price to account for PPIPH; and
limiting the PHI benefits for private patients in a public hospital to only cover medical expenses: if no benefit is to be paid by the insurer to the hospital for accommodation or other amenities (e.g. the insurer would only cover the doctor’s charges), this would reduce the financial incentive for hospitals to actively seek out private patients who can elect.

 
Contact Hive Legal
If you would like further information or have any questions, please Contact Us.
This is for general information only and formal legal advice should be sought on matters of interest arising from this article.
 

Footnotes
1 Catholic Health Australia, Report: How the Growth of Private Patients in Public Hospitals is Impacting Australia’s Health Systems (June 2017).
2 Catholic Health Australia, Report: How the Growth of Private Patients in Public Hospitals is Impacting Australia’s Health Systems (June 2017).
3 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
4 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
5 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
6 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
7 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
8 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
9 Australian Private Hospitals Association, Private Patients in Public Hospitals – APHA analysis paper (August 2017).
10 New South Wales Government, NSW Health submission for the ‘Options to reduce pressure on private health insurance premiums’ (September 2017).
11 New South Wales Government, NSW Health submission for the ‘Options to reduce pressure on private health insurance premiums’ (September 2017).

Email: [email protected]: +61 413 336 990

Contact Joanna

Email: [email protected]: +61 431 270 591

Contact Ella

Email: [email protected]

Contact Katie

We have recently collaborated with August Digital Design Agency to design an innovative visual privacy policy. We combined our legal and design skills and processes (including our design thinking framework, HiveThinkP  and August’s design sprints) to come up with a policy which is being described  as ‘delightful’, ‘fun’ and ‘user friendly’.  Read about how we did it in this interview with David Bushby from InCounsel.
Read more about Want users to read your privacy policy? Make it delightful.

We are very excited to announce that Adrienne Trumbull and Ella Cannon have been promoted to Associate Principals. Adrienne and Ella are fabulous examples of what we stand for at Hive. They are successful ‘work /life integrators’ (as we like to say), they are committed to improving the experience for our clients by thinking innovatively and providing exceptional legal assistance, and they bring energetic enthusiasm and encouragement to our team. We are very lucky to have people like Adrienne and Ella helping us to continue our journey to ‘change things up’ in the legal profession.
Adrienne joined Hive two years ago, bringing her extensive experience both in private practice and in-house across the health, private health insurance and technology sectors. She takes a commercial approach to working with clients on corporate, contracting and transactional matters to achieve practical outcomes for their business.  Her commitment to providing real value to clients is reflected in the fact that she has recently further enhanced her value pricing skills to enable her and Hive to provide even more value and cost certainty to our clients.  Adrienne says ‘I feel very fortunate to be part of such a high calibre, supportive and forward thinking team, while also being able to partner with fantastic clients.  Hive’s flexibility offers exceptional opportunity to align legal services with clients’ needs, and I am so excited to be driving this forward with Hive.’
Ella has been an integral part of the Hive team since early 2016, advising clients on a broad range of commercial and regulatory issues within both the private and public sector. She has deep expertise in the fast changing health sector, with a particular focus on digital health and privacy and data protection. Ella is committed to redesigning legal services and outputs for her clients, which is exemplified by the role she recently played in collaborating with a digital design agency to produce an innovative and ground-breaking visual privacy policy.  Ella says ‘It’s very rewarding to be part of a firm that prides itself on legal excellence and client-led delivery of service, offers genuine flexibility and encourages out-of-the-box thinking.  For me, this is a really exciting opportunity to play a bigger role in the future of a firm that I really believe in.’
We are also celebrating and congratulating our new Associates Carlie Andrews, Jack Furphy, Mona Sukkarand Rachel Varghese.
‘We are really proud of all of our team, and it is so satisfying to see that team grow and flourish in the Hive. Congratulations to those who have been promoted, and we are looking forward to sharing the journey with you as we continue to ‘do things differently’ says Joanna Green, Principal.

On 3 July 2019, ASIC issued a further Consultation Paper Foreign financial services providers: Further consultation (CP 315) which sets out its proposal to:

Exempt foreign financial services providers (FFSPs) from the requirement to hold an Australian Financial Services Licence (AFSL) in relation to the provision of certain funds or portfolio management services to Australian professional investors (subject to a cap on the scale of activities that may be undertaken in Australia); and
Repeal the licensing relief known as ‘limited connection’ relief as previously proposed in Consultation Paper 301 Foreign financial services providers (CP 301),

as well as extending current regime relief (known as ‘sufficient equivalence’ relief and ‘limited connection’ relief, discussed immediately below) for a further six months until 31 March 2020 .
Subject to further consultation, ASIC does not currently propose to give licensing relief to an FFSP that provides financial services to a professional investor where the investor initiates the inquiry about the financial services (also known as ‘reverse solicitation’).
Current regime relief for FFSPs
Currently, FFSPs providing financial services to wholesale Australian clients are not required to hold an AFSL in certain circumstances under existing relief, broadly known as:

sufficient equivalence relief : based on ASIC’s assessment of the overseas regulation of the relevant FFSP achieving similar regulatory outcomes as Australian regulatory requirements (see the ASIC Corporations (Repeal and Transitional) Instrument 2016/396 ); and
limited connection relief: exempting FFSPs that are only engaged in inducing, or intending to induce, a person in Australia to use its financial services (see the ASIC Corporations (Foreign Financial Services Providers – Limited Connection) Instrument 2017/182).

These instruments were originally due to sunset on 27 September 2018 but will now be extended until 31 March 2020 .
Proposed replacement for the current regime
In brief, FFSPs which currently rely on sufficient equivalence relief should be aware of the following and make appropriate alternative arrangements:

As discussed in our last update, ASIC intends to commence a foreign AFSL licensing regime on 1 April 2020, a modified form of AFSL. FFSPs currently relying on sufficient equivalence relief will have a two year transitional period ( from 1 April 2020 to 31 March 2022 ) to apply for a foreign AFSL and implement the necessary compliance arrangements.
As an alternative to applying for a foreign AFSL, FFSPs should determine whether their activities in Australia fall within the terms of a proposed new ‘Funds management relief’ licensing exemption (discussed in the section below) or any other relevant licensing exemption currently contained in the Corporations Act 2001 (Cth) and associated regulations ( Existing Exemptions ).

For those FFSPs which currently rely on limited connection relief, and subject to further consultation and a transitional period ending on 30 September 2020 , ASIC is proposing to repeal that relief in its entirety. Prior to 30 September 2020, these FFSPs will need to have determined whether their activities in Australia fall within the terms of the proposed new ‘Funds management relief’ licensing exemption, or any other relevant Existing Exemptions.
Proposed ‘Funds management relief’
This proposed licensing relief will be subject to:

a cap on the scale of those services (the FFSP will only have the benefit of the relief if less than 10% of its annual aggregated consolidated gross revenue, including the aggregated consolidated gross revenue of entities within its corporate group (for each of the previous and current financial years), is generated from the provision of funds management financial services in Australia); and
conditions that apply to the operation of the relief (such as that the FFSP must not be carrying on a business in Australia, must enter into a deed submitting to the non-exclusive jurisdiction of Australian courts in relation to action by ASIC and other Australian government entities, and lodge it with ASIC, must notify ASIC of the types of funds management financial services it intends to provide to professional investors in Australia, must maintain adequate proof of its compliance with the proposed 10% aggregated revenue cap described above).

An FFSP will engage in a ‘funds management financial service’ for the purposes of this relief if they provide any of the following financial services to a ‘professional investor’ in Australia:

dealing in interests of a managed investment scheme established outside Australia ( Scheme ) or securities of a body that carries on a business of investment that is not incorporated in Australia ( Body );
providing financial product advice in relation to the interests or securities of the Scheme or Body; and/or
making a market in relation to the interests or securities of the Scheme or Body; and
portfolio management services to a limited category of professional investors (or ‘eligible Australian users’).

FFSPs should be aware that a ‘professional investor’ is a subset of ‘wholesale investor’ for the purposes of the Corporations Act and broadly include:

AFSL holders
APRA-regulated bodies
trustees
a listed entity or a related body corporate of a listed entity
a body corporate, or a person that controls at least A$10 million.

ASIC proposes to define ‘eligible Australian users’ to include:

a person in Australia who is a trustee of:

a superannuation fund, within the meaning of the Superannuation Industry (Supervision) Act 1993 (SIS Act), with net assets of at least A$10 million;
an approved deposit fund, within the meaning of the SIS Act, with net assets of at least A$10 million;
a pooled superannuation trust, within the meaning of the SIS Act, with net assets of at least A$10 million;
a public sector superannuation fund, within the meaning of the SIS Act, with net assets of at least A$10 million;

a person in Australia who operates a managed investment scheme, with net assets of at least A$10 million;
a person who operates a statutory fund under the Life Insurance Act 1995 in Australia; and
an exempt public authority (defined in the Corporations Act).

FFSPs currently carrying on a financial services business in Australia with wholesale clients, or intending to do so, are urged to consider the matters in CP 315 carefully.
Contact Hive Legal
Contact John Malon, David Reckenberg, Rebecca Lim or Mona Sukkar at Hive Legal if you wish to make a submission on CP 315 to ASIC before the 9 August 2019 deadline, or have any questions about how the proposed new regime may affect your financial services business in Australia.
This is for general information only and formal legal advice should be sought on matters of interest arising from this article.

Email: [email protected]
Mobile: +61 408 272 189

Contact John

Email: [email protected]
Mobile: +61 411 265 284

Contact David

Email: [email protected]
Telephone: +61 3 8645 8400

Contact Rebecca

Email: [email protected]
Mobile: +61 433 336 784

Contact Mona

On 5th and 6th June, Joanna Green, Ella Cannon and Adrienne Trumbull from our Health Team attended the Informa Health Insurance Summit in Sydney. The Summit involved high profile speakers from across the industry and was well attended by private health insurers, hospitals, Government and industry bodies. Here is a summary of the key discussions.
Key issues
Many speakers highlighted the challenging environment that the current climate provides for the PHI industry. This included affordability, transparency and value issues such as:

the decline in younger members, together with the increase of an older and sicker population that has access to more tailored and expensive treatments;
a shift in claim types for younger members, including a rise in mental health claims and a lower number of people taking up insurance early for the purposes of obstetrics;
the shrinking gap between the quality and choice between private and public hospitals;
trends in low value care; and
variance in medical costs, quality, experience and outcomes between doctors and hospitals, and issues in members accessing and understanding quality benchmarking data prior to establishing the clinical relationship. Websites including HealthShare and WhiteCoat were recognised for their impact in this area.

Hot topics
Private patients in the public system.
Joanna Green, Principal at Hive Legal, led a panel discussion between Jacqueline Worsley (Executive Director of Government Relations NSW Health), Professor Brendan Murphy (Chief Medical Officer, Commonwealth Department of Health) and CEO of Independent Hospital Pricing Authority, James Downie on this sensitive topic, with the take away being there is no clear path forward. Some speakers noted the importance of the dual public/private health system and the dramatic increase in waitlist times that would occur if all patients went via the public system. Others noted the importance of choice and the high standard of newly built public hospitals meaning there may not be the same value proposition for private patients as there once was. The methodology and timing for asking private patients to make the election was also discussed. We will publish a more in depth piece on this issue shortly.
Member data.
We heard from several speakers about the significant opportunities of data, but also the difficulty of navigating member concerns around how their data will be used, and the security of that data. Ella Cannon, Senior Associate of Hive Legal, reiterated her views that authenticity and transparency will be increasingly important for insurers in communicating how member data will be captured and used so as to increase comfort levels in sharing this data, which doesn’t always have to involve boring privacy policies!
Focus going forward

Low premium increases: While the mood across the industry was generally one of relief that the Labour government would not be implementing the promised 2% cap, several speakers noted the Morrison Government’s focus on delivering low premium increases without impacting value for the customer. Affordability is a key focus for stakeholders, with suggestions to address including changes to the rebate, prosthesis procurement, second tier default benefits, right setting for health care and low value care.
Delivering value: The buzz word of the Summit was “value”. The industry is challenged to move the member focus away from how expensive PHI is, and towards the value that they are getting for that expense.
Good governance: APRA was strong in its message to insurers to ‘be prepared’. It wants insurers to focus on risk management, and in particular look at its board composition to ensure it is refreshed, and has a variety of backgrounds and skills to enable it to best manage risks. It was also made clear that following the recent focus on the banking sector, the PHI sector should expect more attention in coming years, and as such, should have a strict compliance approach. APRA also expects insurers to have robust management strategies in place to mitigate extraneous risks, such as policy change risk, substitute services, health and wellbeing offerings, engagement with policy makers and implementation of redundancy options such as mergers with aligned partners.

If you would like further information or have any questions, please contact us.
This is for general information only and formal legal advice should be sought on matters of interest arising from this article.

Email: [email protected]: +61 413 336 990

Contact Joanna

Email: [email protected]: +61 431 270 591

Contact Ella

Email: [email protected]: +61 419 437 567

Contact Adrienne

Cyber-attacks are a real and growing risk, with the ability to profoundly impact an organisation’s operations. APRA’s new Prudential Standard CPS 234 is geared at lessening regulated entities’ vulnerabilities, and requires those entities to beef up their information security management. If you’re racing against the clock, read on for some last-minute guidance…
Snapshot
With just under a month to go until the new APRA Prudential Standard CPS 243 (CPS 234) comes into effect, APRA regulated entities should be reviewing their information security management framework to ensure compliance.
Commencing on 1 July 2019, CPS 234 is geared at bolstering the resilience of APRA-regulated entities against cyber-attacks and other information security incidents. It will require regulated entities to take a proactive approach to managing such risks, and to maintain information security capabilities that reflect the significance of the data they hold and the impact of potential threats.
Who needs to comply?
CPS 234 will apply to ‘APRA regulated entities,’ which includes authorised deposit-taking institutions, general insurers, life insurance companies, private health insurers and registrable superannuation entity licensees.
Key requirements
The key requirements of CPS 234 are that APRA regulated entities must:

clearly define the information security roles and responsibilities of the Board, senior management, governing bodies, and certain individuals within the entity (noting that the Board will have ultimate accountability for the entity’s information security);
implement and maintain an information security capability which is commensurate with the size and extent of threats to the entity’s information assets;
classify the entity’s information assets by criticality and sensitivity (including those managed by third parties);
implement and maintain information security policies, standards, guidelines and procedures, again as commensurate with the entity’s exposure to vulnerabilities and threats;
implement robust mechanisms and information security response plans to promptly detect and respond to information security incidents;
undertake regular testing of information security controls, performed by appropriately skilled and functionally independent specialists;
ensure that internal audits review the effectiveness and design of all information security controls (including the controls of any third parties which manage information assets); and
notify APRA within 72 hours of becoming aware of certain security incidents (actual or potential), and within 10 business days of becoming aware of certain security control weaknesses.

It’s worth noting that where an entity’s information assets are managed by a third party, a transitional period is provided – that is, the requirements of CPS 234 will not apply to those information assets until either the next renewal date for the relevant third party contract or 1 July 2020 (whichever is earlier).
Are we prepared?
With less than a month to go, all APRA regulated entities should be confirming that robust measures have been implemented to ensure compliance with the above requirements.
As the board, senior management, audit and operational functions of an entity will be directly (and in some cases, significantly) impacted by CPS 234, it’s worth investing the time now to make sure everything is in place.
If you would like further information or have any questions, please contact us.
This is for general information only and formal legal advice should be sought on matters of interest arising from this article.
Joanna Green, Principal
M: +61 413 336 990E:  [email protected]: www.hivelegal.com.au
Ella Cannon, Senior Associate
M: +61 431 270 591E:  [email protected]: www.hivelegal.com.au
Katie Boyles, Paralegal
E:  [email protected]: www.hivelegal.com.au

Email: [email protected]: +61 413 336 990

Contact Joanna

Email: [email protected]: +61 431 270 591

Contact Ella

Email: [email protected]

Contact Katie

In an attempt to meet growing client demand, one NewLaw firm has revealed it has appointed an additional principal and associate principal. Hive Legal has announced that Joanna Green has been promoted to principal, while Melissa Lyon has been promoted to associate principal. A statement from the firm said that since her arrival from a […]

Hive’s Imme Kaschner talks about helping Justice Connect develop its Google-funded initiative, the Legal Help Gateway, building prototypes for apps through user-centred design and encouraging lawyers to get involved in digital projects. Congratulations to Justice Connect on this innovative project and thanks for involving Hive. Read more at Law Institute of Victoria

Some things change and some stay the same. Our recent changes include some departures and promotions (more on that below). What’s staying the same is that Hive continues to thrive by delivering value and innovative services to our many clients, collaborating with a broad range of firms and organisations in our network and providing an […]