Federal Health Minister meets with private hospital leaders to tackle sector reforms

MedTech & Diagnostics News: In the past five years, 71 private hospital services have closed down as a result of workforce shortages and funding from insurers failing to keep pace with soaring costs of providing care. Federal Health Minister Mark Butler MP met with Catholic Health Australia (CHA) leaders yesterday to discuss reforms in the private hospital sector.

The private hospital sector, valued at $22 billion, accounts for 36% of all hospital beds in Australia, delivers 40% of acute care services, and handles 60% of surgeries. Despite its significant role, the sector is experiencing financial strain, with the revenue-cost gap narrowing to just 0.8% in 2021-22.

The meeting, hosted by Cabrini Health Chair Sylvia Falzon and CEO Sue Williams, focused on addressing the numerous challenges faced by the private hospital sector and exploring potential solutions.

Attendees discussed a range of topics, including workforce issues, digital health, maternity care, and mental health. They acknowledged the complexity of the system and the absence of a single solution to its challenges.

Minister Butler recently announced a review of the private hospital sector, to be conducted by senior health department officials Brian Kelleher and Emily Lancsar, along with former Independent Hospital Pricing Authority chief executive James Downie.

“CHA recognises Minister Butler’s proactive engagement with health stakeholders and his genuine willingness to listen and respond. CHA members are committed to engaging collaboratively to support Government reforms in health,” said Jason Kara, CEO of Catholic Health Australia.

Minister Butler underscored the importance of understanding the sector’s viability, stating, “Private hospitals are an important part of the Australian health system and an important partner for public health service providers. Reports about the sustainability of some private hospitals are concerning, particularly those in regional areas where they play an essential role in the local community.”

Last year, the Australian Medical Association (AMA) held a workshop with sector leaders, including representatives from the Department of Health and the minister’s office.

One key proposal from the workshop was the establishment of a new independent body, the Private Health System Authority, which could ensure a cohesive regulatory model that safeguards patient choice.

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