Private hospital sector in trouble | 7.30

Summary

The 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.