Station: ABC Radio Canberra
Program: AM
Date: 26/11/2019
Time: 8:01 AM
Compere: Sabra Lane
Interviewees: Dr Rachel David, CEO, Private Healthcare Australia; Stephen Duckett, Health Program Director for the Think Tank, Grattan Institute; Michael Roff, CEO, APHA


SABRA LANE: The peak body representing private health insurers has welcomed the Federal Government’s plans for a shakeup of the rules governing health funds. The Health Minister Greg Hunt is working on changes that allow health funds to cover specialist treatment delivered outside hospitals and in the home, and we’ll hear from him shortly. While the industry has welcomed the move, private hospitals are dismissing a new report out today that questions the hospitals efficiency and the excessive costs they charge.

Thomas Oriti reports.

REPORTER: According to health insurers, Australia’s changing and the system needs to move with it.
RACHEL DAVID: Patients’ needs have changed since our health system was put together back in the 1970s.
REPORTER: Rachel David is the CEO of Private Healthcare Australia.
RACHEL DAVID: Now there are much greater issues with chronic disease and chronic illness. We’re dealing with much older people with complex needs and also we’ve seen the emergence of mental health as a major concern for Australians, eclipsing even their concerns about cancer and obesity.
REPORTER: The Government wants to put an end to a model of private health that’s confined to inpatient services. It’s been dubbed hospital in the home by the Health Minister Greg Hunt. So take mental health for example. At the moment, in home treatment isn’t funded which means people sometimes stay in hospital longer than they should. Another example is orthopaedic where it might be better to get out of hospital sooner and get more rehabilitation at home. It’s changes like these that the Government wants to see in place next year and it makes sense according to Rachel David.
RACHEL DAVID: There are some pretty arcane rules that prevent health funds from easily funding care outside of hospital or post-discharge from hospital, and I think that is worth a look now. The Health Minister has asked us to come to him with proposals specifically around mental health, but also some of the care that takes place after surgery. And we’ve been more than happy to do that because patients are actually asking us for options.
REPORTER: But the Government’s plans come as the private health sector faces criticism over inefficiencies and excessive fees.
STEPHEN DUCKETT: Young people are looking at what they expect to use in health insurance, they’re saying we don’t need it, we’re young, we’re healthy and they’re dropping out.
REPORTER: Stephen Duckett is the health program director for the think tank the Grattan Institute and he’s released a report calling on private hospitals to lift their game by negotiating with specialists over their fees and declaring costs to patients up front, with hospitals absorbing the excess fees.
STEPHEN DUCKETT: There’d be a price that sets a different diagnosis, different procedures and that all the health insurers would use that price and this would start to drive improvements and efficiency right throughout the country.
REPORTER: The report has also accused private hospitals of being less efficient, saying private patients stay in hospital nine per cent longer than public patients with similar conditions. The Australian Private Hospitals Association rejects that saying public hospital readmission rates can be much higher. But it’s the recommendation to negotiate with doctors that the association’s CEO Michael Roff says could lead to more harm than good.
MICHAEL ROFF: Doctors aren’t employed by private hospitals and if hospitals were involved in negotiations setting doctors’ fees, they could be deemed to be employers and that would lead to a massive increase in indemnity insurance premiums for hospitals. And that would force up health insurance premiums. So rather than reducing costs for consumers, it would increase them.
SABRA LANE: And that’s the Australian Private Hospital Association CEO Michael Roff ending that report from Thomas Oriti.
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