Public hospitals using private health insurance benefits as a cash cow


The recent Council of Australian Governments (COAG) Health Council meeting has highlighted a significant issue that is increasing waiting lists in public hospitals and undermining Medicare, says Australian Private Hospitals Association (APHA) Acting CEO Lucy Cheetham.

A report in the Sydney Morning Herald and The Age newspapers this week said State health ministers had asked for a ‘hefty’ increase in the fee charged to health funds when a privately insured patient ‘elects’ to be treated in a public hospital and is accommodated in a private room.

Ms Cheetham said the request is disingenuous as public hospitals are using the private health insurance benefits as a cash cow, effectively making the privately insured pay twice for healthcare – once through their insurance and also through their taxes.

“The State Health Ministers are asking the Federal Government to compensate them for a problem they have created. If they did not encourage people to use their private health insurance benefits in public hospitals they would not be managing any ‘higher costs’.

“The idea that all patients are ‘electing’ to be treated privately in a public hospital is laughable. Patients are often told the private hospital is full or doesn’t perform the procedure they need – even when this is incorrect.

“And the impact is being felt where public hospitals are needed – by those left languishing on public elective surgery waiting lists because public hospitals are putting the privately insured ahead of them in their surgery queues.

“Australian Institute of Health and Welfare (AIHW) data shows privately insured Australians median waiting time for elective surgery is 21 days and at least twice as long for public patients. Privately insured patients are being prioritised ahead of public patients. This queue jumping goes against the principles of Medicare that access to public hospital care should be based on clinical need not on insurance status,” she said.

Ms Cheetham said the harvesting of privately insured patients in the public system through Emergency Departments was particularly callous.

“These patients are vulnerable; they are in need of urgent care. Public hospitals prey on this vulnerability by demanding patients sign over their private health insurance, when they should be being triaged and receiving treatment.

“APHA acknowledges that some private patients may wish to have their care privately in the public system. What we oppose is the coercive tactics of public hospitals that are restricting patient choice.," she said.


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