The head of the doctors' union has slammed health insurer Medibank Private for its "offensive" refusal to cover costs for women who die during childbirth.
Australian Medical Association president Brian Owler says the insurer is trying to cloak its stoush with private hospital operator Calvary in a concern for quality.
Medibank is refusing to pay Calvary for a list of 165 events it says are "highly preventable".
Professor Owler says one of those events is maternal death associated with childbirth - which can and does occur in rare cases.
"I find it offensive that a private insurer would refuse to cover the costs of that patient and hospital in such a tragic event," he told the National Press Club on Wednesday.
"If someone thinks that a financial incentive will motivate doctors, nurses or anyone else in a hospital to prevent maternal death any more than they desire to do so now, then they have no understanding of medicine or the people in it."
While the AMA accepts refusal to pay for mistakes such as surgery on the wrong body part, Prof Owler says there are many areas where complications occur despite full preventative measures.
He fears the government's sale of Medibank last year has put Australia on a path toward a US-style managed care system, in which insurers can dictate what doctor you see or what treatment you receive.
He said Medibank was now mainly concerned about increasing profits for its shareholders and he called for regulation of the private health insurance sector.
Medibank says there needs to be a link between healthcare standards and payments "otherwise the healthcare system has limited incentive to focus on reducing waste and addressing improvements".
"Medibank doesn't want to see our members - or any patients for that matter - come to harm while receiving health care, nor do our members want to go on being asked to foot the bill through higher premiums for avoidable mistakes or waste in the hospital setting."
Private Healthcare Australia chief executive Michael Armitage said insurers had a responsibility to their members to demand better quality and safety measures.
He said premiums increased by an average of 6.18 per cent this year but payments to doctors by health funds increased by 6.9 per cent and payments to hospitals were up 7.7 per cent.
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