Toowong Private Hospital to close

AFTER almost 50 years serving Brisbane and surrounding areas, Toowong Private Hospital will close its doors permanently from Wednesday 11 June as the latest casualty of the insurer-induced viability crisis engulfing private hospitals across Australia.

Toowong is a 58-bed acute private psychiatric hospital, treating more than 3,000 patients a year and employing 154 dedicated specialist staff. It is renowned for its acute mental health care and seen as an exemplar in providing innovative approaches to the continuum of psychiatric care inside and outside the hospital setting.

The closure comes in the wake of health insurance companies pocketing an average $2 billion a year record profits from people's annual premiums, as well as $3.5 billion in 'management fees', while short-changing private hospitals by over $1 billion a year. That is, refusing to pay for the care of insured patients in full.

"The Federal Government has been missing in ac on despite being fully briefed on the funding mess that has worsened over the last two-and-a-half years," APHA CEO Brett Heffernan said. "Inexplicably, under Minister Butler the health insurance industry has been allowed to profiteer from premiums and undermine the healthcare needs of Australians.

"The irony of a highly respected psychiatric hospital closing when the Federal Government says mental health is a priority, should not be lost on anyone. It makes a mockery of such claims.

"This announcement is bitterly disappointing for patients, staff, private psychiatrists and the management of Toowong because it was entirely avoidable. Many hospitals, including Toowong, took the unprecedented
step of opening their books to the Federal Government over a year ago to demonstrate the failure of insurance companies to pay for the care of insured patients in full.

"The Federal Government point-blank refused to act. It's Private Hospital Viability Health Check, released last November, failed to produce so much as a thought-bubble, let alone any willingness to act.

"Federal Health Minister Mark Butler's recent public commentary acknowledging the issues comes too little, too late for Toowong and many others. In fact, over the last few years 20 private hospitals have close
entirely, while more than 70 services in other private hospitals, notable maternity and mental health units, have been permanently cancelled.

"The Minister needed to act two years ago. Even six months ago as part of his much-touted Health Check would have stopped this closure. We are advised as many as eight other private hospital closures are imminent.

"Over two years ago Toowong pleaded with the Federal Government and Department of Health ease the moratorium restricting internationally educated psychiatrists from practicing in private psychiatric inpatient
settings, where the need for psychiatrists to admit patients with moderate-to-severe mental health conditions is becoming more and more desperate.

"This barrier still exists today. That this measure was not implemented immediately, especially given the deepening crisis in national mental healthcare, both public and private, is incomprehensible.

"Specifically, over the last three years Toowong Private Hospital has faced lengthy delays in private health insurance contract negotiations, some by months and with one major insurer by over a year. That means payments to the hospital significantly lagged behind costs.

"At a me when private psychiatric patients in need of hospital care have limited options for accessing treatment and care, it is staggering that another insurance group refused to negotiate a contact with Toowong, citing its position of "not adding new psychiatric hospitals to the agreement list". Instead, this insurance group chose to place Toowong under second tier arrangements, which forces insured patients to pay hefty out-of-pocket costs to cover their stay. This is not the practice of an insurer who is there for its
members.

"The power imbalance between independent hospitals, including Toowong, and the private health insurers, is enormous and allows the insurance industry to abuse its market dominance at will.

"That an exceptional and respected healthcare provider like Toowong Private Hospital, where Psychiatry Registrars have been trained since 1994, and offers clinical placements to medical and nursing students, has been forced into this position, along with the precarious position of a number of others, may be signaling an end to independent operators.

"We are seeing predicted market failure play out, where insured patients are losing choice and access, despite paying higher and higher premiums. All the while the quality they expect from their premiums is also compromised due to the inability of hospitals to invest in technology, treatments, services and staff.

"Make no mistake, Toowong's closure is due to insurance company greed and the Federal Government's failure to act to fix the failed, abuse-riddled funding model.

"The human toll is very real. From today, the 3,000 patients that Toowong treats each year will need to make other arrangements, while 154 dedicated specialist hospital staff will be looking for new jobs.

"Minister Butler must make good on his pledge to force the insurers to restore the traditional funding ratio to private hospitals of 88% from premiums, currently languishing at 83-84%. And he must do it now."

-ENDS-

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