The directors of Wollongong-based ahm are pushing for a takeover of the health fund by the much larger Medibank Private despite a survey of members two years ago which found 65 per cent were against demutualisation of any kind. On Monday, ahm and Medibank Private began a process which, if approved by ahm members, would see the Federal Government-owned Medibank acquire ahm for $367 million and form Australia's largest insurer.
The Mercury can reveal consultation of members conducted by a independent research company in 2006 "indicated a strong preference for ahm remaining a not-for-profit mutual".
In ahm's 2007 annual report, then board chairman Michael McMahon wrote that the poll of members found "65 per cent were against demutualisation regardless of what form it took, with the major reason given that the company would be run for the benefit of shareholders rather than members and it was felt that this was likely to affect premiums and service levels".
"... members expressed the view that a mutual organisation is the appropriate status for a company delivering products and services related to personal health," Mr McMahon, now deputy chairman, wrote.
Following Monday's announcement, members of ahm will be asked to vote on demutualisation, and then the Medibank Private takeover, from November.
When approached for comment yesterday, chairman Chris Doogan said the same survey "also told us that more than half of our members would be in favour of a merger with a larger company providing there were assurances including the recommendation of the board, court approval and a vote by the members".
"The ahm board has determined that the proposal from Medibank is in the best interests of members ... however ultimately the decision to approve the transaction lies with our members and also the court."
Yesterday, Medibank Private executives including managing director George Savvides visited Wollongong to discuss the acquisition proposal.
Mr Savvides committed to honouring staff awards and conditions and increasing, rather than decreasing, the bank of 350 employees.
"The commitment was made to staff in black and white that this is an investment to grow our business ... we need to grow ahm," he said. "We are absolutely committed to continuing Wollongong operations and in fact we are asking the question where we can put other resources and people."
Medibank has a higher number of members in Wollongong than ahm and Mr Savvides said the acquisition would allow both brands to offer better services.
The two brands would remain separate, and ahm services and the company's connection with community groups and sporting teams could remain.
He said Medibank was keen to become more involved in preventative health, where "ahm are the pioneers in Australia".
Many ahm members have told the Mercury they are worried the health fund, that began in Wollongong in 1971, and its personalised service would be no more.
But Mr Savvides said he "admired" the insurer and had no plans to change its values.
United Services Union southern organiser Rudi Oppitz said some staff had felt a "salesman" technique had been adopted in yesterday's meetings and "that the presentation lacked any certainty over employment futures".
