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Address to the 2025 APHA National Congress
Opening Address
Darwin Convention Centre
Christine Gee, AM, President, Australian Private Hospitals Association
Good morning, esteemed colleagues, and valued members of the Australian Private Hospitals Association (APHA). It is a true honour to stand before you today, especially as we gather in the beautiful and unique Northern Territory for the 2025 APHA Congress.
This year, we meet in a region of great significance—a place that embodies both the opportunities and challenges that the healthcare sector faces in Australia. As we come together, I want to take a moment to acknowledge the traditional custodians of this land, the Larrakia people, and extend my respect to their Elders, past, present, and emerging. Their stewardship of this land offers valuable lessons in resilience, adaptation, and care—qualities that are at the heart of our work in healthcare.
The Northern Territory, with its vast distances, remote communities, and diverse population, stands as a microcosm of the unique healthcare challenges we face in Australia. Delivering high-quality care in this region, whether in the bustling city of Darwin or in the most isolated rural and regional communities, requires creativity, determination, and a deep understanding of local needs.
As we begin our discussions today, let us draw inspiration from the land and people of this region, remembering how their resilience and resourcefulness mirror the work we must do to ensure that Australia's healthcare system remains strong and responsive to the needs of all Australians.
The reoccurring narrative of this year's congress is resilience and innovation in private health care and shaping the future, is incredibly timely. Over the next three days, we will dive into critical discussions about the future of healthcare, not just for private hospitals but for the Australian health system as a whole.
These conversations will cover a broad range of topics that are pivotal to the survival and growth of the private hospital sector, and I'm excited to see how we will collectively shape the future direction of our industry.
We will begin by exploring environmental regulations and the impact they are 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.
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.
In the same breath, we will be focusing on the viability of private hospitals—a topic that has been a source of much discussion over the past year. The financial pressures faced by private hospitals, exacerbated by increasing operational costs, workforce shortages, and ongoing regulatory burdens, are threatening the ability of some facilities to continue to operate effectively.
In the context of these pressures, we will discuss potential solutions, such as the role of government in supporting private hospitals, and the importance of ensuring that private healthcare continues to contribute meaningfully to the overall healthcare system.
Another area of critical importance we will address is the role of artificial intelligence (AI) and regulation in healthcare. 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.
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.
In addition, we will take a deep dive into the landscape of health in Australia, considering the ever-evolving needs of our population, shifting demographics, and the increasing complexity of healthcare delivery. We must look beyond the traditional models of care and ask ourselves: how can we adapt our systems to meet the needs of an aging population, those with chronic conditions, and those in remote communities who experience barriers to care?
Finally, we will engage in critical conversations on rural and regional health—one of the most pressing areas of concern for the healthcare system. Access to healthcare in rural and regional areas remains an ongoing challenge, with many communities facing a shortage of services and healthcare professionals. 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.
Additionally, this congress will address the important topic of mandatory reporting of adverse events. As healthcare providers, we are committed to transparency and accountability in all that we do. Mandatory reporting of adverse events is a critical step toward improving patient safety and quality of care. During our sessions, we will examine how mandatory reporting can help identify trends and areas for improvement, and how we can use these insights to create a safer, more effective healthcare system.
We will also explore problem areas within the sector, acknowledging the real and tangible challenges that we face. But rather than simply identifying problems, we will focus on how we can fix them. Whether it's improving patient outcomes, ensuring financial sustainability, tackling workforce shortages, or implementing new technologies, we will work together to identify actionable solutions and strategies that will guide us toward a more resilient and efficient private healthcare system.
As we delve into these sessions over the next three days, I encourage all of you to engage openly, share your ideas, and work together toward creating solutions that will benefit not only private hospitals but the broader Australian healthcare system.
We are incredibly fortunate to have an outstanding lineup of keynote speakers who will help us navigate the complexities of these issues. I am excited to welcome Len Notaras, a highly respected leader in the healthcare industry, whose wealth of experience and strategic vision will be invaluable as we explore the future of private healthcare. We will also hear from Gavin Wanganeen, a former Australian football star and now an advocate for mental health, who will share his unique perspective on the critical importance of mental health care—especially in the private sector. Finally, we will be joined by Kai Riermer, an expert in artificial intelligence, who will help us understand how AI is reshaping healthcare delivery and what it means for the regulation of this transformative technology.
Today, I would like to address some key developments within the private hospital sector over the past year. We are witnessing a period of significant change, driven by evolving financial pressures, regulatory updates, and the ongoing need for innovation and collaboration between public and private healthcare, to the integration of new technologies and the evolution of healthcare delivery. We will explore how we can strengthen the foundation of private healthcare while addressing the evolving needs of our communities.
1. Private Hospital Sector Developments in the Last 12 Months
Financial Viability Health Check
Over the last year, we saw the federal government release an important report highlighting the serious viability issues faced by private hospitals, in key areas such as mental health and maternity care amongst many others. 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.
In response to these challenges, the report proposed several solutions:
• Government Purchasing Services: One potential solution discussed is the government purchasing services directly from private hospitals. This would help reduce the waiting lists for public hospitals and alleviate some of the pressure on the public system, which is often overwhelmed.
• Wage Growth in Private Hospitals: The report also suggested funding wage growth in private hospitals. Healthcare professionals are the backbone of our hospital systems, and their wages must reflect the increasing costs of living and the demanding nature of their work.
• Reducing Capital Reserve Requirements for Private Health Insurers: Another proposal was to reduce the capital reserve requirements for private health insurers. This would free up more funds for insurers, allowing them to support the private hospital sector and address financial challenges.
While these proposals present a path forward, there is still much work to be done to ensure their implementation. The financial pressures on the sector remain significant, and the demand for services continues to grow. As we look to the future, we must explore ways to make these solutions a reality, ensuring that both the public and private healthcare systems can work in harmony to meet the needs of the Australian population.
Activity and Financial Challenges
In terms of activity, there has been an increase in episodes of care, with more patients seeking services in private hospitals. However, this increase in demand has been accompanied by rising costs and ongoing workforce challenges.
The strain on private hospitals is palpable, with hospitals facing higher costs for everything from medical supplies to energy bills. At the same time, the sector is struggling with a workforce shortage, which is compounded by burnout, high turnover rates, and the global shortage of healthcare professionals.
Despite these pressures, the private hospital sector continues to deliver high-quality care. But it's clear that the sector needs additional support and a sustainable model that can adapt to both immediate and long-term challenges.
Private Health Insurance Membership
On a more positive note, we've seen an increase in private health insurance membership. Over the last year, there was an uptick of 307,879 people who joined the private hospital insurance market. This is certainly encouraging, as it suggests that more Australians are recognizing the value of private health insurance and the services it offers.
However, this rise in membership comes with its own set of challenges.
One concern 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.
There is growing concern that, without proper regulation, these exclusionary products may create inequalities in healthcare access. 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.
These developments reflect both the challenges and the opportunities facing the private hospital sector. While there is progress, there is also much work to be done to ensure financial viability and equitable access to care for all Australians.
2. Private Hospital Viability: Immediate Response to Crisis
As we all know, the financial challenges in the private hospital sector have reached a crisis point. In response, the Australian Private Hospitals Association (APHA) released a paper on November 28, 2024, calling for immediate action to address these issues. The paper outlines urgent solutions needed to stabilize and support the private hospital sector.
Financial Pressures
The APHA's paper highlights the significant financial pressures facing private hospitals, particularly the rising operational costs and insufficient revenue growth. 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. As the report emphasizes, the reality is that private hospitals are finding it difficult to remain financially viable without intervention.
Immediate Solutions Proposed by APHA
The APHA has proposed a number of immediate solutions to stabilize the sector:
• Government Support: The APHA calls for immediate financial support from the government to ensure private hospitals can continue to operate and provide essential services. This support would not only provide relief to hospitals but also ensure that patients continue to receive the care they need.
• Reimbursement Adjustments: The paper suggests that reimbursement rates should be adjusted to better reflect the actual cost of providing care, for example in critical areas like obstetrics and mental health services amongst many others. These adjustments would help hospitals cover the increased costs of providing services and maintain quality care for patients.
• Regulatory Reforms: The APHA advocates for regulatory reforms that would reduce administrative burdens and streamline processes. By reducing red tape, hospitals would have more resources available to focus on patient care rather than navigating complex and time-consuming regulatory procedures.
While these immediate actions are vital for the short-term, the APHA also stresses the importance of long-term strategies for sustainability.
Long-Term Viability
The APHA's paper underscores that while immediate action is essential, long-term solutions are also necessary. This includes fostering ongoing collaboration between the government, private hospitals, insurers, and healthcare providers to ensure a more sustainable future for the private hospital sector. It also emphasizes the importance of innovation and finding ways to better integrate public and private healthcare systems to create a more cohesive and effective model of care for all Australians.
By securing both immediate and long-term solutions, we can ensure that private hospitals remain an integral part of the Australian healthcare landscape, providing essential services to those who need them most.
3. Changes in the Private Hospital Sector That Were Not Implemented
While there have been a number of proposals for reform in the private hospital sector, not all of them have been successful. Several proposed changes did not pass through the legislative process. These include:
• Private Hospital Funding Increase: One proposal was to increase funding for private hospitals to help reduce the burden on public hospitals and reduce waiting times for elective surgeries. Unfortunately, this proposal did not make it through the legislative process, leaving a gap in the support available for private hospitals.
• Workforce Support Initiatives: Another proposal called for specific workforce support initiatives, such as subsidies for training, recruitment, and retention of healthcare professionals. However, this initiative did not pass, leaving the workforce shortage unresolved.
• Capital Reserve Requirements: A proposal to reduce capital reserve requirements for private health insurers, which would allow more funds to be used to support private hospitals, also has not yet progressed.
These unimplemented proposals highlight the difficulties of addressing the complex financial and operational challenges facing the private hospital sector. Despite the clear need for these reforms, the legislative process has proven to be a significant barrier to meaningful change.
4. Private Health Insurance Sector Changes That Were Not Implemented
Similarly, there were several proposals within the private health insurance sector that did not come to fruition. These include:
• Reform of Exclusionary Products: There was an attempt to reform exclusionary health insurance products, which would have ensured better coverage for essential services. However, this proposal has not progressed.
• Transparency in Premium Increases: A proposal requiring insurers to provide detailed explanations for premium increases was also not implemented. This lack of transparency continues to create frustration for consumers, who often face significant premium hikes without understanding the rationale behind them.
• Expansion of Mental Health Coverage: Legislation to expand coverage for mental health services, including both inpatient and outpatient care, also did not come to fruition. This is particularly concerning given the growing demand for mental health services across the country.
The inability to pass these reforms has resulted in continued gaps in the accessibility and affordability of private health care, further exacerbating the challenges facing the private hospital sector.
5. Prostheses List Reforms
One of the significant reforms within the healthcare sector over the past year was the overhaul of the Prostheses List. The government aimed to align the benefits paid for prostheses with the prices paid in the public hospital system, reducing the costs of medical devices and improving the sustainability of the private health insurance sector. While this is expected to save between $800 million and $900 million over four years, it has also had unintended consequences.
While the reform will save money for insurers, it has also eroded hospital earnings, as hospitals are now paid less for prostheses whose purchase prices have continued to rise. This is another example of the balancing act that needs to occur when implementing healthcare reforms—ensuring that cost savings are achieved without compromising the financial health of the very institutions that provide care.
6. Investment and Sustainability Initiatives
So where are we now?
• Private Hospital Sector Financial Health Check: The government conducted a thorough financial health check of the private hospital sector to identify areas needing support. This provided the evidence base for future reforms and highlighted the importance of continued investment in the sector.
• Private Health CEO Forum: To address the sector's long-term challenges, the government established the Private Health CEO Forum, bringing together key stakeholders to discuss sustainability reforms and develop collaborative solutions.
• Unfortunately, there has been no decisive action by government to this point however, we welcome Minister Bulter's election-eve commitment to 'to take action on payments to private hospitals within the next three months, directing they increase funding to a greater portion of their benefits'. But it will be too little, too late for some hospitals in staving off collapse.
These issues affect the entire hospital system – private and public.
The failure to address these issues two years ago, or even six months ago when the release of the Private Hospitals Viability Health Check resulted in not a single solution, left 12.3 million Aussies who are doing the right thing by taking out hospital insurance badly exposed. They are paying ever-growing premiums while the private hospital system is likely to see more closures.
Once upon a time both sides of politics recognised the importance of Australia's balanced public-private hospital system. With private hospitals accounting for 70% of all planned surgery, 1.6 million medical treatments each year, including the majority (54%) of chemotherapy, 62% of acute mental health care and 80% of hospital rehabilitation, ignoring the insurer-induced crisis risks plunging public hospitals into even deeper disaster.
Equally, the Federal Opposition does not, so far, appear willing to grasp the nettle of essential funding reform. Mr Dutton must, at least, match the commitment made by Mr Butler in bringing the insurance industry to account.
To be clear, the issues affecting private hospitals are not volume-related. When you're being underpaid for the treatment you provide, then performing 10, 100 or 1,000 procedures doesn't matter much, in fact, the more you do only compounds the funding shortfall.
Private hospitals – for profit and not for profit – all have to make margin to be able to reinvest in the technologies, procedures, services and care people pay their premiums to access. Over three years we've seen clear market failure. Patient care and the whole health system are in jeopardy when governments and would-be governments leave private hospitals to the mercy of insurance companies.
Conclusion
In conclusion, the private hospital sector is navigating a challenging landscape, with rising costs, workforce shortages, and financial pressures that threaten the sector's viability. However, through appropriate government intervention, collaboration with key stakeholders, and the implementation of strategic reforms, we can ensure that the private hospital sector remains 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. 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.
Thank you.
-ENDS-
Next Speeches:
3/4/2025 Hospital Viability & the Political Landscape