Pulling together in private hospital funding
Australia's healthcare system, with its unique blend of public and private services, is admired globally.
This success depends on strong partnerships. Private hospitals provide essential care, doctors and healthcare professionals deliver expert treatment, health insurers facilitate funding through affordable coverage, and the government provides regulation and support.
Maintaining the balance between the needs of these stakeholders has challenges, but it has been preserved through a shared commitment to prioritising patient care. However, the recent, often heated debate on private hospital funding, risks disrupting this balance.
Discussions over cost agreements are a standard part of the healthcare landscape. Typically, these negotiations occur privately, in good faith, and lead to a fair outcome for all parties involved. Our fund maintains long standing and ongoing contracts with over 500 private hospitals nationally, with contract terminations rarely occurring.
At their core is a shared goal: ensuring patients receive the best possible care while maintaining access and affordable premiums, through collaboration and co-operation.
Unfortunately, in recent months, this spirit of cooperation has been overshadowed by public comments that insurers are squeezing private hospital operators to boost profits. These claims miss a critical point: around 5.2 million Australians are covered by health funds that are mutuals or part of mutuals, like ours.
Our goal is not to maximise profits for shareholders, but to keep premiums affordable and improve services for our members. This requires a delicate balancing act, especially when factoring in external pressures like claims inflation driven by an aging population and rising procedural costs. For our fund, hospital and medical claims inflation has averaged 5.9% compound over the three years to 30 June 2024.Additionally, we returned more than $20 million to members, reflecting the surplus funds arising from delayed claims during the Covid period. These funds are actuarially assessed and overseen by the ACCC.
Doctors working in private hospitals recognise the critical role of appropriate investment and sound hospital administration in maintaining high standards of care. While we are dedicated to ensuring our funding supports this, we must also protect our members from unaffordable premiums, especially if those premiums are funding services patients are using less frequently.
The dynamics of private hospital care are evolving, with a shift in the service mix. Doctors are increasingly choosing day surgeries and shorter admissions, meaning patients spend less time in hospitals or receive out-of-hospital care when appropriate. These efficiencies will ultimately benefit patients and enable more effective use of resources.
It is essential that all parties recognise our symbiotic relationship, where each of our successes contributes to our shared goals. Public disputes only serve to harm the very people we are all here to support. Instead, our intent should focus on innovative care models, improving hospital and insurance efficiencies, and most importantly, listening to the "voice of the patient".
We will always conduct negotiations with our private hospital partners in good faith and are committed to supporting their sustainability and continued delivering of high-quality care. It’s in everyone’s best interest that we reach a satisfactory resolution.
