Next Health Minister’s priority must be a hospital funding agreement



Now that the 2019 Federal election has been decided, the first priority for the next Health Minister will be landing a hospital funding agreement with the states.

Hopefully the two recalcitrant states that have not yet signed the Heads of Agreement, New South Wales and Victoria, will now come to the party so the process can move forward.

This is an important issue for the private hospital sector as the Heads of Agreement includes a framework for addressing the issue of public hospitals ‘harvesting’ private patients, particularly in emergency departments.

We have seen the damaging impact of an increasing number of privately insured patients in Queensland public hospitals ironically forcing the public system to turn to the private sector to treat their patients.

This problem will not go away for the public sector if it continues to insist on putting profits ahead of patients, many of whom would rather be treated in a private hospital of their choice, with their choice of doctor.

Elsewhere in the country the practice has increased waiting times for elective surgery in public hospitals and created a system where those who can pay for private health insurance are prioritised in the public system over public patients.

This is not only a contravention of Medicare principles, it is leaving patients languishing on waiting lists with a reduced quality of life while they wait for care.

This is just one of many issues the Australian Private Hospitals Association (APHA) will be working on with government in this term.

The Coalition is also committed to the private health insurance rebate, with a promise to restore it to 30 percent when the surplus reaches two percent of gross domestic product.

The rebate has been eroded to the point where its value is only 25 percent, and APHA will continue to argue for consumers to get a better deal.

The rebate has reduced in value with the indexation of the rebate to Consumer Price Index as premium increases have continued to exceed general inflation.

Households on low incomes face a ‘double whammy’ of increased premiums and reduced rebates because every year the value of their private health insurance rebate goes down. For example, in 2019, a high-income earner who does not receive the rebate would have experienced a premium increase of 3.25 percent. However, low-income earners would have experienced a real premium increase of 3.74 percent.

APHA will be advocating immediately restoring the rebate to 30 percent for low-income earners or at the very least a freeze on any further erosion.

In terms of ongoing work, the Gold, Silver, Bronze and Basic private health insurance system will be maintained and delivered during the next 10 months. Private health insurers will have converted all of their products to the new system by Wednesday 1 April 2020.

Clear and easy to understand private health insurance policies that consumers can easily compare has long been a goal for APHA. This should be achieved through the new system and consumers should feel the benefits of having confidence they have the right policy for themselves and their family.

Out-of-pocket costs for medical services will be another issue on the government’s agenda. A commitment has been made to create a website that will enable consumers to compare out-of-pocket costs from specialists in their region, enabling them to make a more informed choice about the costs of their procedure.

APHA maintains that medical fees are an issue between patients and their treating doctor, but supports consumers having more information on which to base their choices.

Another significant issue for private hospitals remains workforce. The nursing workforce, for example, is stretched and there has long been a prediction of a nursing workforce shortage of 85,000 nurses by 2025. 

Private hospitals experience persistent difficulties in recruiting experienced staff including theatre nurses, cancer care nurses and mental health nurses to name but a few.

While the private hospital sector is working hard to address nursing and other workforce shortages issues by offering training places, providing graduate placements and providing registrar positions more can be done.

Private hospitals, with appropriate funding support, have capacity to offer more training places for medical internships and specialist registrar training.

Where the gaps cannot be filled by local graduates skilled migration regulation reform is needed to reduce the cost and complexity in recruiting skilled and experienced clinicians.

These are all issues the Coalition government is aware of and indeed, in many cases has begun the challenging work to address. The APHA will continue to work with the Morrison Government to see real change in health care for the benefit of Australian consumers.


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