Private hospital sector in trouble | 7.30
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
🏥 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.
🛑 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
💡Maternity Unit
💡Health Insurance
💡Out-of-Pocket Costs
💡Elective Surgery
💡Funding Issues
💡Health System Crisis
💡Vertical Integration
💡No Gap Surgery
💡Healthcare Reform
💡Cost Increases
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.
Transcripts
Regional private hospitals provide vital
care we had a really smooth amazing
birth and we were really well supported
on discharge that has lots of helpful
websites and phone numbers you can
contact 24/7 and things like that so
firsttime parents Sarah and Jeremy soon
say having their baby sad at St John of
God Hospital in bendo gave them more
choice being able to stay for a few more
days really get settled um and just some
continuity of care as
well Jeremy and Sarah are lucky their
hospital was on the brink of shutting
down its maternity unit last
year we were very close to having to
close it you know we saw uh what was
happening in the rest of the Private
Hospital sector there were multiple
private maternity services that were
closed uh or had been
closed in the past year 21 private
hospitals have opened across Australia
and 16 have closed according to the
Federal Department of Health Sunshine
private in Melbourne is one of them its
operators pulled the pen just 14 months
after the new site opened blaming
funding
issues the crisis in Private health is
threatening the entire health system and
the federal government has ordered an
urgent review we want a full health
check of the private hosital Hospital
sector it plays a really important part
in the broader Health Care System it
delivers uh about 2/3 of all elective
surgery it's an important player for
maternity services for mental health
range of other different types of
service we have unprecedented waiting
lists for elective surgery uh in our
public hospitals so any failures in the
private hospital system will throw
pressure back on the public hospital
system that could cause collapse
the latest figures show almost half of
all Australians have Private Hospital
cover medy bank and berer hold about 52%
of the Private health insurance Market
Private health insurance participation
has been growing quite strongly since
the beginning of the pandemic in spite
of people's concerns about the
cost there are 650 private hospitals
across the country the peak bodies for
those hospitals Echo St John of God Bend
go CEO Michael Hogan's concerns that the
cost of treating patients has soared
particularly by inflation particularly
by cost increases in wages U medical
surgical supplies energy uh Insurance
all of these costs have increased
significantly postco um and at this
point the funding provided by Health
funds hasn't kept up with that four of
the five big funds hiked premiums more
than the average 3% that was set by the
federal government
this year the Gap has grown and it's
grown because the cost of delivering
Services has increased at a greater rate
to the funding that's provided by Health
funds look more money will not fix the
issues that the sector is experiencing
but I just want to be clear that the
Private health funds have paid an
additional
99.7% to the hospitals over the last
year so the issue is not that the health
funds are not providing them with
money Catholic Health Australia has
crunched the numbers in 2017 operating
profits for health insurers and private
hospitals were relatively equal in
2023 the operating profits of Health
insurers soared to 90% while private
hospitals had shrunk to 10 Dr Rachel
David is CEO of the peak body for
private insurers we are not going to be
paying a large increment to hospitals
across the board and without
discrimination because that will will
put up premiums for our members that
will result that will result in
additional people dropping out of the
system as a result of the cost and that
won't help hospitals at
all private insurers say hospitals need
to be more efficient and the cost
specialist charge should be better
monitored we've noticed a really sharp
increase in outof Pocket costs since the
pandemic occurred and what we think is
happening is that some groups of Medical
Specialists are reducing their hours and
putting up their outof pocket cost to
compensate for that this is a really
difficult problem for us to fix because
we can't keep chasing higher and higher
and higher out of pockets um with higher
rebates I can only speak for our setting
here in Bendigo and in a regional
setting I think the level of outer
Pockets that are um charged by doctors
is quite low in an area like maternity
where the traditionally the out of
pockets have been higher um there's
still very low compared to a
metropolitan
area increasingly private insurers are
offering members surgery options with
minimal outof pocket fees typically at
certain hospitals with certain doctors
we've now got 35 hospitals more than 200
Medical Specialists and thousands of
patients have gone through the program
and had a a great experience as a
result 4 months ago Victoria Pedroza
Hart needed a knee replac
and opted for a surgeon who worked at
the East Sydney Private Hospital which
is 49% owned by medy bank I was
introduced to no Gap surgery by the
doctor and he worked with with Med Bank
private the surgeon explained that
that's what I could have have and I made
a decision to go ahead with that because
I've I would save a lot of money I had a
short stay at
hospital and then I had the
physiotherapist coming to my home uh and
that all was also
covered medy bank is now also buying
into GP clinics and the Australian
Medical Association is concerned about
how this might impact on the quality of
care one of the problems with vertical
integration where the Private health
insurer owns the GP practice uh has
contracts with the surgeons who are
providing care owns part of hospitals is
that there's an intrusion into that
doctor patient relationship so that no
longer are doctors working with patients
to come up with the best care for that
patient but they're following a set of
financial rules designed to increase the
profit of Private health
insurers medy bank's chief medical
officer rejects this there is no doubt
that when you provide a program with a
shorter length of stay in an acute
Hospital hospital and certainly
providing care in the home can be
cheaper but it's important to note that
that saving is really the one the saving
that actually leads to the removal of
those out-of pocket costs for consumers
and that's really the Big Driver for us
they won't have a health insurance
product to sell if they don't have
private hospitals to provide the service
while private insurers and hospitals may
have different views about how to fix
the sector both agree there's an urgent
need for reform we need a viable Private
health insurance industry and we need a
strong viable Private Hospital operation
um that's that's critical for each of
them but more importantly it's critical
for patients and for the viability of
our public hospital system as
well the findings of the federal review
into private Health are due later this
month
[Music]
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