Private hospital reforms: Upcoming CEO Forum to consider options for ‘immediate’ action

The Department of Health launched a consultation to explore short-term private health reform options for the viability of the private hospital sector. However, the timing of the consultation has raised concerns, as it was launched in early January, leaving only three weeks for responses while many stakeholders were on leave.

As part of the reform process, the government established the Private Health CEO Forum last year to identify and advise on options aimed at improving the sustainability of the private health sector. However, Jane Griffiths, CEO of Day Hospitals Australia, expressed frustration , stating, “We need relief now; we can’t wait for another talkfest.”

This sentiment was echoed by Brett Heffernan, CEO of the Australian Private Hospitals Association (APHA), who, in a recent interview with Health Industry Hub, criticised the government’s lack of timely action.

“We get a report that confirms everything that we already know and the government’s response is ‘let’s have another chat about it’. It’s just not good enough. The government has skin in the game. It’s time they stepped up and actually did the job,” he asserted.

The consultation paper proposes several short-term reforms to ease the financial strain on private hospitals. These will require health insurers to boost funding for hospital-in-the-home programs, expand access to “affordable” maternity cover across more policies (rather than limiting it to ‘Gold’ level policies), and increase support for second-tier default benefits for established regional hospitals.

Another proposal involves placing mental health services in the risk equalisation pool, which would make it easier for insurers to offer mental health coverage. Currently, mental health is excluded from this arrangement.

While some private hospital operators have welcomed the move, health insurers have warned that the proposals place the financial burden solely on the funds. Insurers argue that these reforms would likely result in higher premiums for customers to cover the costs.

Despite this, Federal Health Minister Mark Butler MP is preparing to announce a modest increase in annual health insurance premiums, which is expected to be less than half of what the private health insurance industry have requested, set to take effect in April.

The Department of Health is expected to present the consultation feedback at the CEO Forum in early March, where it will evaluate reform options for “immediate implementation”.

Will these reforms be pushed through before the election, or will they be sidelined?

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