Call for national review of public hospital private practice arrangements

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A call has gone out for a national review of private practice arrangements in public hospitals after a Victorian report raised concerns that hospital practices may be detrimental to public patients’ timely access to care.

Australian Private Hospitals Association (APHA) CEO Michael Roff said the Victorian Auditor-General’s findings and the subsequent review commissioned by the Victorian Health Minister should be repeated across the nation.

The “Managing Private Medical Practice in Public Hospitals” report, raised issues that can be seen nationally, he said.   

“This has long been an issue in Australia’s public hospitals and it is well past time a firm hand was taken with the public system to ensure that taxpayer funds are used appropriately to deliver the services on which public patients depend,’’ he said.

“Public hospitals see dollar signs walking in the door when a privately insured patient walks in.

“They bend over backwards for them, dropping excesses and out-of-pocket costs, offering private rooms and promising faster access to treatment.

“The result is that one in eight publicly funded beds – that should be allocated on the basis of clinical need alone – are being given over to the treatment of private patients, while public patients are forced to wait in line.”

The audit examined three Victorian health services and found that they derived more than $207 million from private practice patients.

The report noted “there is a lack of clarity on correct billing practices for episodes of care”.

“Our observations of each audited health service demonstrate that managing private practice arrangements is administratively burdensome, and none of the health services know the cost of administering them,” the audit said.

“We found that public health services have given medical specialists the use of public hospital facilities without assessing the cost benefit of these arrangements.

“We recommend a comprehensive review of Victoria’s health funding …”

Following the release of the report, Victorian Health Minister appointed Professor David Watters to lead a review on private practice arrangements in public health services.

Professor Watters, a previous president of the Royal Australasian College of Surgeons, would be reviewing hospital practices to ensure they were clinically appropriate and adhered to the principle of access based on clinical need.

He will have complete discretion to identify any areas of non-compliance that require immediate action and make recommendations aimed at strengthening equity of access for all patients requiring elective surgery in public hospitals.

“It’s particularly good to read that Professor Watters will be reviewing hospital practices to ensure they are clinically appropriate and adhere to the principle of access based on clinical need,” Mr Roff said.

Mr Roff added he was glad the Department of Health and Human Services had accepted the recommendations of the Auditor-General’s report, but the issue needed better oversight.

“All states and territories should follow Victoria’s example and really examine this issue with a view to acting on it,” he said.

“Not just because it is required under the National Health Reform Agreement, but also to help those Australians left languishing on elective surgery waiting lists.

“This is not how the public system is supposed to work and it must change,” he said.

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