Using private health insurance in public hospitals bad for patients – CHA report

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A new report from Catholic Health Australia (CHA) says public hospitals offering inducements to patients to use their private health insurance in public hospitals is negatively impacting Australian patients and could undermine the sustainability of the health system.

The report, Upsetting The Balance: How the growth of private patients in public hospitals is impacting Australia’s health system, shows the number of privately insured patients treated in public hospitals has almost doubled from 2008-09 to 2015-16, from 451,591 to 871,902.

Australian Private Hospitals Association CEO, Michael Roff said this report adds to the increasing evidence that this issue needs to be addressed by Federal and State governments.

“This issue goes to the heart of what Medicare was created to do – provide access to health care for those who can least afford to pay for it. The most recent data from the Australian Institute of Health and Welfare shows public hospitals are allowing privately insured patients to jump the queue, adding to already long waiting lists for elective surgery and forcing those without, to go without.

“This issue must be addressed to guarantee access to public hospital beds for public patients and to improve the affordability of private health insurance.

“While there are ongoing discussions about reforming private health insurance to make it more valuable to Australians, insurers are tipping upwards of $1.1 billion into the public hospital coffers with very little benefit to patients and forcing private health insurance premiums significantly higher than they need to be,” Mr Roff said.

CHA’s CEO, Suzanne Greenwood also raised concerns about public hospitals treatment of private patients.

“It is particularly concerning for CHA to hear reports that the states are in some instances actively encouraging coercive behaviour to pressure patients to use their private health insurance for public care,” she said.

The CHA report has evidence of inducements to patients, including gifts, holidays or as a ‘favour’ to the hospital to purchase equipment. In some cases patients were falsely told ‘that a nearby private hospital was full’.

Mr Roff said the examples in this report are not new.

“We have heard many similar stories. If patients were told the truth – that using their private health insurance in a public hospital might mean other Australians miss out on much needed care, the sign up rates would be significantly lower,” Mr Roff said.

One of the recommendations from the report is to reduce the ability to offer inducements or unduly pressure consumers to declare their private health insurance status.

Launching the report, Health Minister Greg Hunt said there was a clear over reliance on private patients in public hospitals, which meant the health system was out of balance.

“We have seen a doubling of the waiting time for general public patients over those who have private health insurance. And that runs into tensions with fairness and principles of equity. It runs in to tension with the purpose of the Medicare system and the entire set of arrangements,” said Mr Hunt.

He committed to continuing the discussion on private patients in public hospitals through the Council of Australian Governments.

Mr Roff said he recognised that Health Minister Greg Hunt understands the issue.

“We look forward to continuing our work with him to find a solution that benefits Australian patients and provides access to quality health care for all,” Mr Roff said.

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