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News & Trends - MedTech & Diagnostics

Private hospitals push back on Private Healthcare Australia’s demand for tighter regulations

Health Industry Hub | February 5, 2024 |

MedTech & Diagnostics News: Australia’s private health system is under scrutiny as Private Healthcare Australia (PHA), the body for private health funds, calls for stricter legislation to safeguard consumers against unexpected bills.

With 60% of elective surgical procedures occurring in the private health sector, PHA is urging the Albanese Government to implement measures that ensure consumers are not held accountable for undisclosed costs associated with their medical treatments.

PHA highlights the need for both civil and criminal penalties for any breaches in disclosing upfront costs. This comes on the heels of new data revealing a staggering 300% increase in the median out-of-pocket costs for Australians undergoing common procedures over the past five years. Spikes have been observed in hospital fees for heart angiogram procedures and gastroscopies, where the median out-of-pocket fees have surged from $50 in 2017-18 to $200 in 2022-23. Some procedures that were previously fee-free, such as cataract surgery and cystoscopies, now attract median out-of-pocket fees of $100 and $200, respectively.

Michael Roff, CEO of the Australian Private Hospitals Association (APHA), disputed the claim that the increases in out-of-pocket costs were solely attributable to “hospital fees.”

“PHA has falsely claimed that increases in out-of-pocket costs are from ‘hospital fees’.  Where health insurers contract with hospitals for the provision of services (which is the vast majority of cases), they do not allow hospitals to charge out-of-pocket fees. The benefits paid to private hospitals by health insurance companies have failed to keep pace with the well-documented cost increases being experienced by hospitals and other providers,” Mr Roff told Health Industry Hub.

The Australian Bureau of Statistics data underscores the financial strain on private hospitals, revealing a drastic drop from 89% in 2019-20 to 30% in 2021-22 of hospitals reporting profits or breaking even. Rising operating costs, including food, power, medical supplies, and technology, have surged by an estimated 10% -15% in the past year, while health insurance companies are offering hospitals minimal increases of 2% – 3%.

“Consumer Health Forum (CHF) strongly believes in ‘One quote – One bill’, the idea that consumers know what costs they are up for, in their entirety, before they agree to a clinical procedure. We know that people choose to defer care because they don’t know what the out of pocket costs will be. Deferred care is a poor outcome for the consumer, the community and the system,” commented Elizabeth Deveny, CEO of CHF.

Dr Rachel David, CEO of PHA, emphasised the urgency of implementing laws aligned with international best practices to shield consumers from surprise healthcare billing. Drawing parallels to the United States’ ‘No Surprises Act,’ which gained bipartisan support, Dr David stated, “Fifty-five percent of Australians are paying for private health insurance. These people are contributing to their own healthcare and taking pressure off our stressed public hospital system. They should be guaranteed protection from unanticipated costs.”

Mr Roff stressed “If health insurance companies were serious about reducing out-of-pocket costs, they could use some of their super profits to pay providers appropriately rather than calling for increased regulation – something they routinely reject should be applied to their own operations.”

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