Private hospital sector in trouble | 7.30

ABC News In-depth

14 Aug 202407:57

Summary

TLDRThe Australian private hospital sector faces a crisis with 16 maternity units closing in the past year, affecting patient care and straining public hospitals. Rising costs of treatment, including wages and medical supplies, are not met by health funds, leading to increased premiums and out-of-pocket expenses for patients. Both insurers and hospitals agree on the urgent need for reform to ensure the viability of private health insurance and hospital operations, which are crucial for the broader health care system.

Takeaways

🏥 Regional private hospitals are vital for providing care, as experienced by first-time parents Sarah and Jeremy at St John of God Hospital in Bendigo.
📉 The private hospital sector is facing a crisis, with 16 maternity services closed in the past year, including Sunshine private in Melbourne, due to funding issues.
🏥 The federal government has ordered an urgent review of the private hospital sector, recognizing its importance in the broader health care system.
🤰 Private hospitals deliver about 2/3 of all elective surgery and are crucial for maternity services, mental health, and other services, with failures in the private system potentially causing a collapse in the public system.
📈 The latest figures show that almost half of all Australians have private hospital cover, with medy bank and bupa holding about 52% of the private health insurance market.
💰 The cost of treating patients has increased significantly due to inflation, wage increases, medical supplies, energy, and insurance, outpacing the funding provided by health funds.
📊 Four of the five big health funds hiked premiums more than the average 3% set by the federal government this year, leading to a growing gap between service costs and funding.
🏥 Private insurers argue that hospitals need to be more efficient and that specialist charges should be better monitored to address the issue of increasing out-of-pocket costs.
🛑 Catholic Health Australia's analysis shows a shift in operating profits from private hospitals to health insurers between 2017 and 2023, indicating a need for balance.
💉 Private insurers are offering surgery options with minimal out-of-pocket fees through agreements with certain hospitals and doctors, aiming to provide better value for patients.
🚑 Medy bank is expanding into GP clinics, raising concerns from the Australian Medical Association about potential impacts on the quality of care and doctor-patient relationships.
🔄 Both private insurers and hospitals agree on the urgent need for reform to ensure a viable private health insurance industry and strong private hospital operations for the benefit of patients and the public hospital system.

Q & A

What is the significance of regional private hospitals in providing care for new parents like Sarah and Jeremy?
-Regional private hospitals play a vital role in providing comprehensive care for new parents, offering a smooth and well-supported birth experience, along with helpful resources like websites and 24/7 contact numbers for post-discharge support.
Why was the maternity unit at St John of God Hospital in Bendigo at risk of closure?
-The maternity unit was at risk of closure due to financial challenges that are common in the private hospital sector, which has seen multiple closures in the past year.
How many private hospitals have opened and closed in Australia according to the Federal Department of Health?
-According to the Federal Department of Health, 21 private hospitals have opened, while 16 have closed across Australia.
What is the impact of the crisis in private health on the broader health system?
-The crisis in private health is threatening the entire health system as private hospitals deliver about two-thirds of all elective surgery and are important for maternity services and mental health care. Failures in the private sector could increase pressure on public hospitals and potentially cause a collapse.
What percentage of Australians have private hospital cover, and who are the major players in the private health insurance market?
-Almost half of all Australians have private hospital cover, with medy bank and Bupa holding about 52% of the private health insurance market.
What factors have contributed to the increased costs for private hospitals?
-The costs for private hospitals have increased due to factors such as inflation, higher wages, the cost of medical and surgical supplies, energy, and insurance.
How have the private health funds responded to the increased costs of delivering services?
-Four of the five big funds have hiked premiums more than the average 3% set by the federal government. However, the funding provided by health funds has not kept up with the increased costs of delivering services.
What measures are private insurers taking to address the issue of out-of-pocket costs for patients?
-Private insurers are offering surgery options with minimal out-of-pocket fees at certain hospitals with specific doctors, and they are working to better monitor the costs charged by medical specialists.
What is the concern of the Australian Medical Association regarding medy bank's involvement in GP clinics?
-The Australian Medical Association is concerned that vertical integration, where a private health insurer owns GP practices and hospitals, could intrude on the doctor-patient relationship and lead to a focus on financial rules rather than the best care for the patient.
How does medy bank justify its involvement in GP clinics and hospitals?
-Medy bank argues that providing care with a shorter length of stay in acute hospitals and at home can be more cost-effective, which helps to remove out-of-pocket costs for consumers and is the main driver for their involvement.
What is the common agreement between private insurers and hospitals regarding the sector?
-Both private insurers and hospitals agree on the urgent need for reform to ensure a viable private health insurance industry and strong, viable private hospital operations, which are critical for patients and the public hospital system.

Outlines

00:00

🏥 Private Hospital Challenges and Support for New Parents

The script discusses the importance of regional private hospitals, highlighting the positive experience of first-time parents Sarah and Jeremy at St John of God Hospital in Bendigo. It mentions the hospital's close call with shutting down its maternity unit due to financial struggles, which is a common issue in the private hospital sector. The Federal Department of Health reports 21 new private hospitals opening and 16 closing. The script emphasizes the role of private hospitals in the broader health care system, especially in elective surgery and maternity services, and the potential impact on public hospitals if the private sector fails. It also touches on the growing participation in private health insurance despite cost concerns, with almost half of Australians having coverage. The challenges faced by private hospitals, including increased costs of treatment, wages, medical supplies, and energy, are noted, along with the pressure this puts on health funds and the need for reform.

05:01

🛑 Private Health Insurance Innovations and Concerns Over Quality of Care

This paragraph delves into the strategies private insurers are using to offer surgeries with minimal out-of-pocket fees, often at specific hospitals with certain doctors. The example of Victoria Pedroza Hart's knee replacement surgery at East Sydney Private Hospital, partially owned by medy bank, is given to illustrate a 'no gap' surgery experience. The Australian Medical Association expresses concerns about the impact of vertical integration on the quality of care, suggesting that financial rules may override the best interests of patients. Medy bank's chief medical officer counters this by arguing that shorter hospital stays and home care can reduce costs and out-of-pocket expenses for consumers. The paragraph concludes with the recognition of an urgent need for reform in the private health sector to ensure the viability of both private health insurance and hospital operations, which is critical for patients and the public hospital system. The federal review's findings on private health are expected to be released later in the month.

Mindmap

Keywords

💡Private Hospitals

Private hospitals are medical facilities that are not operated by the government but by private entities or organizations. They play a significant role in the healthcare system by providing a range of services, including elective surgeries and maternity care. In the script, the importance of private hospitals is emphasized as they deliver about two-thirds of all elective surgeries and are crucial for maternity services, mental health, and other types of care. The script also discusses the challenges faced by private hospitals, such as closures and funding issues.

💡Maternity Unit

A maternity unit is a specialized department within a hospital that focuses on the care of pregnant women and newborns. The script mentions that the maternity unit at St John of God Hospital in Bendigo was close to shutting down, highlighting the vulnerability of such units within the private hospital sector. The continuity of care and the choice provided by maternity units are highlighted as essential for first-time parents like Sarah and Jeremy.

💡Health Insurance

Health insurance is a type of insurance that covers the cost of medical and surgical expenses incurred by the insured. In the context of the video, health insurance is crucial as it provides coverage for treatments at private hospitals. The script discusses the growth of private health insurance participation since the pandemic and the challenges faced by health funds in keeping up with the increasing costs of healthcare services.

💡Out-of-Pocket Costs

Out-of-pocket costs refer to expenses that are not covered by insurance and must be paid by the patient. The script notes a sharp increase in out-of-pocket costs since the pandemic, which is a concern for patients and insurers alike. The video suggests that medical specialists may be increasing their out-of-pocket fees to compensate for reduced working hours, affecting the affordability of healthcare.

💡Elective Surgery

Elective surgery is a non-emergency procedure that can be scheduled in advance at the convenience of the patient and healthcare provider. The script mentions that private hospitals deliver a significant portion of elective surgeries, and any failure in the private hospital system could increase pressure on public hospitals, which are already facing unprecedented waiting lists for such surgeries.

💡Funding Issues

Funding issues refer to the challenges faced by organizations in securing sufficient financial resources to operate and provide services. In the script, funding issues are cited as a reason for the closure of private maternity services, such as the one in Sunshine private in Melbourne, which shut down 14 months after opening.

💡Health System Crisis

A health system crisis refers to a situation where the healthcare system is under significant strain, often due to financial, operational, or capacity constraints. The script discusses the crisis in private health as a threat to the entire health system, with the federal government ordering an urgent review to address the issues affecting private hospitals.

💡Vertical Integration

Vertical integration in healthcare refers to the ownership or control of multiple stages of the healthcare delivery process, such as health insurance, medical practices, and hospitals. The script mentions concerns about vertical integration, particularly when a private health insurer owns part of hospitals and GP clinics, potentially impacting the quality of care by introducing financial rules that may not always align with patient needs.

💡No Gap Surgery

No gap surgery is a procedure where the patient does not have to pay any out-of-pocket expenses after their health insurance coverage, because the medical provider has agreed to accept the insurance payment as full payment for the service. The script provides an example of Victoria Pedroza opting for a no gap surgery at East Sydney Private Hospital, which is partially owned by medy bank, resulting in significant savings and a positive experience.

💡Healthcare Reform

Healthcare reform refers to changes or improvements made to the healthcare system to address issues and improve efficiency, accessibility, and quality of care. The script ends with a call for urgent reform in the private health sector, emphasizing the need for a viable private health insurance industry and strong private hospital operations to ensure the overall viability of the public hospital system.

💡Cost Increases

Cost increases refer to the rise in expenses associated with providing goods or services. In the context of the script, cost increases are mentioned in relation to wages, medical supplies, energy, and insurance, which have significantly impacted the private hospital sector. The funding provided by health funds has not kept pace with these cost increases, leading to financial strain on private hospitals.

Highlights

Regional private hospitals are essential for providing care, as experienced by first-time parents Sarah and Jeremy at St John of God Hospital in Bendigo.

The hospital was on the verge of closing its maternity unit last year, reflecting a broader crisis in the private health sector.

21 private hospitals have opened across Australia, while 16 have closed, indicating a fluctuating landscape in private healthcare.

The closure of private maternity services is attributed to funding issues, as seen in Melbourne's Sunshine private hospital.

The federal government has ordered an urgent review of the private hospital sector due to its integral role in the health system.

Private hospitals deliver about two-thirds of all elective surgery and are crucial for maternity and mental health services.

Failures in the private hospital system could increase pressure on public hospitals, potentially leading to a collapse.

Almost half of all Australians have private hospital cover, with medy bank and berer holding about 52% of the private health insurance market.

Private health insurance participation has been growing since the beginning of the pandemic, despite concerns about cost.

The cost of treating patients has significantly increased due to inflation, wage increases, and the rising costs of medical supplies and energy.

Four of the five big health funds hiked premiums more than the federal government's set average of 3% this year.

The gap between service delivery costs and health fund funding has widened, leading to increased out-of-pocket expenses for patients.

Catholic Health Australia's analysis shows a disparity in operating profits between health insurers and private hospitals in recent years.

Private insurers are not willing to pay large increments to hospitals without discrimination due to the impact on premiums and member dropouts.

Efficiency in hospitals and better monitoring of specialist charges are suggested as solutions to the rising costs.

Out-of-pocket costs have sharply increased since the pandemic, with some specialists raising fees to compensate for reduced hours.

Private insurers are offering surgery options with minimal out-of-pocket fees at certain hospitals, improving patient experiences.

Medy bank's involvement in GP clinics raises concerns about the quality of care and the intrusion into the doctor-patient relationship.

Both private insurers and hospitals agree on the urgent need for reform to ensure the viability of the private health insurance industry and hospital operations.

The findings of the federal review into private health are expected to provide further insights and recommendations for the sector.