Private hospitals face 'challenges and opportunities'

The private healthcare sector must work together to meet the industry's rising challenges, delegates at the 42nd APHA National Congress in Darwin were told.

Australian Private Hospitals Association (APHA) President Christine Gee said critical discussions were necessary to ensure a viable future for private hospitals and private healthcare.

Referring to the theme of the 2025 Congress – 'resilience and innovation' – Ms Gee saidall private hospitals should prepare for the impact environmental regulations were having on healthcare delivery.

"From the increasing focus on sustainability and energy use in healthcare facilities to the environmental impacts of waste management, the changing regulatory landscape in this space poses both challenges and opportunities for private hospitals," she said in her speech.

"As the healthcare sector is one of the largest consumers of energy, we must find ways to reduce our carbon footprint while still maintaining the quality of care that Australians expect.

"How can we work together to meet these environmental goals while ensuring the operational efficiency of our facilities? These are important questions we'll need to answer together."

Ms Gee said the increasing financial pressures faced by private hospitals were caused by a variety of factors.

"These pressures are exacerbated by increasing operational costs, workforce shortages, and ongoing regulatory burdens – they are threatening the ability of some facilities to continue to operate effectively," she said.

"Hospitals have had to navigate higher costs for medical supplies, equipment, and pharmaceuticals, and the pressure to keep wages competitive has only added to the strain."

Ms Gee said the role of artificial intelligence (AI) in healthcare was "of critical importance".

"AI is already transforming the way we approach diagnosis, treatment, and patient management. However, its rapid development presents new challenges around regulation, privacy, and ethical considerations," she said.

"How can we ensure that AI is harnessed responsibly, in a way that enhances patient care and outcomes, without compromising safety or equity? This will be a vital conversation, particularly as we look to the future of healthcare delivery."

Ms Gee said it was time to look "beyond the traditional models of care" and ask how the health system could be adapted to meet the needs of an ageing Australian population, patients with chronic conditions, and those who live in remote communities.

"Access to healthcare in rural and regional areas remains an ongoing challenge, with many communities facing a shortage of services and healthcare professionals," she said.

"How can we better support these areas, both in terms of infrastructure and workforce development, so that everyone – no matter where they live – has access to the care they need?

"Addressing these issues is paramount to ensuring that our healthcare system is equitable, inclusive, and sustainable."

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Ms Gee said the Federal Government's November 2024 Financial Health Check report confirmed the serious viability issues faced by private hospitals.

"Particularly in key areas such as mental health and maternity care amongst many others," she said.

"This report confirmed what many of us have been concerned about: financial instability within the private healthcare system.

"The challenges are multi-faceted, including rising operational costs, workforce shortages, and the strain of expanding care in the face of growing demand."

The report proposed several government solutions, including purchasing services directly from private hospitals, funding wage growth in private hospitals, and reducing the capital reserve requirements for private health insurers.

"While these proposals present a path forward, there is still much work to be done to ensure their implementation," Ms Gee said.

"The financial pressures on the sector remain significant, and the demand for services continues to grow."

In positive news, there has been an increase in episodes of care in private hospitals and a rise of nearly 308,000 people taking up private health insurance membership in the past year.

"This is certainly encouraging, as it suggests that more Australians are recognising the value of private health insurance and the services it offers," Ms Gee said.

"However, one concern there is the growing prevalence of exclusionary products within private health insurance policies.

"These products often limit access to essential services or impose higher out-of-pocket costs, particularly for more vulnerable groups.

"As we move forward, it is essential that we continue to address these concerns, ensuring that private health insurance serves all Australians equitably, not just those who can afford more comprehensive plans."

APHA has proposed several solutions, including immediate financial support from the government, an adjustment to reimbursement rates, and regulatory reforms to reduce administrative burdens and streamline processes.

Ms Gee said despite the challenging landscape, it was possible to ensure the private hospital sector remained an integral part of Australia's healthcare system.

"While not all proposed reforms have been successful, the ongoing dialogue and efforts to address these challenges are crucial to securing a sustainable and effective healthcare system for the future," she said.

"Let us remain committed to finding solutions that will ensure that all Australians have access to high-quality care, whether in public or private settings."

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Photo gallery

(L-R) APHA President Christine Gee with HESTA's National Manager Key Stakeholder Relations, Tom Moloney, and Ramsay Health Care Australia CEO Carmel Monaghan at the 42nd National Congress in Darwin

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