Private hospital activity yet to fully recover

While episodes of care in Australia's private hospitals have increased, activity is still belowexpected levels according to the latest data.

This means Australians are missing out on care and private hospitals are still trying to catch up while managing workforce challenges and increasing costs.

The Australian Prudential Regulation Authority report for July-September 2023 showed there were 1,003,447 privately-insured treatment episodes in private overnight and day hospitals.

This was down 2.6 percent over the quarter, but up nine percent over the year. Private hospitals provided 3,941,403 episodes of care for the year ending Saturday 30 September 2023. 

Australian Private Hospitals Association (APHA) CEO Michael Roff said private hospitals were still providing high-qualitycare to patients, while managing challenging economic conditions.

"It is good to see activity getting back to more normal levels but given the increase in health insurance membershipover the past few years, it is below what we would expect to be happening and highlights the challenges faced byprivate hospitals after three years of reduced activity.

"Workforce shortages, particularly nursing, remain a concern for the sector, while cost of living issues thatall Australians can identify with – like power, transport, food and construction costs – continue to impact privatehospitals," Mr Roff said.

"Unfortunately, health insurance companies have not increased payments to hospitals to cover these massive cost increases, which means the viability of private hospitals is under threat.

"Australian Bureau of Statistics data shows only 30 percent of businesses in the private hospital sector are reportinga profit or just breaking even in 2021-22. This is down from 89 percent in 2019-20. We believe the situation hasdeteriorated in the last 12 months. In October alone, two private hospitals announced they would close."

Mr Roff welcomed the uptick in private health insurance membership – the number of people with hospital coverwent up by 89,570 over the quarter and up by 274,896 over the year.

However, he was concerned by the increase of exclusionary products.

"The data shows that 63.8 percent of hospital cover health insurance policies now have exclusions. This is anincrease of 0.6 percent over the quarter and 0.2 percent compared to the same quarter last year.

"Despite increased membership in private health insurance, more Australians are being convinced to buy productsthat are not fit for purpose, and they may find themselves unable to access the care they need," Mr Roff said.

"APHA encourages Australians to be vigilant when assessing their private health insurance and to review their policy annually to makesure it's still appropriate to their needs and their family's needs."

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