Private hospital activity yet to fully recover after three-year slump

Wednesday, 22 November 2023

Private hospital activity yet to fully recover after three-year slump
While episodes of care in Australia's private hospitals increased in the September quarter, activity is still below
expected levels meaning Australians are missing out on care and private hospitals are still trying to catch up while
managing workforce challenges and increasing costs.

The latest Australian Prudential Regulation Authority data released today shows there were 1,003,447 privately
insured treatment episodes in private overnight and day hospitals this quarter. This is 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 are still providing high quality
care 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 membership
over the past few years it is below what we would expect to be happening and highlights the challenges faced by
private hospitals after three years of reduced activity.

"Workforce, particularly nursing workforce shortages remain a concern for the sector, while cost of living issues that
all Australians can identify with – like power, transport, food and construction costs, continue to impact private
hospitals. 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 reporting
a profit or just breaking even in 2021-22 This is down from 89 percent in 2019-20. We believe the situation has
deteriorated 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 cover
went up by 89,570 over the quarter and up by 274,896 over the year. However, of concern is the increase of
exclusionary products.

"The data shows that 63.8 percent of hospital cover health insurance policies now have exclusions. This is an
increase 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 products
that are not fit for purpose, and they may find themselves unable to access the care they need. APHA encourages
Australians to be vigilant when assessing their private health insurance and to review their policy annually to make
sure it's still appropriate to their needs and their family's needs," Mr Roff said.

-ENDSMedia contact: Frith Rayner, Director Communications and Marketing, 0413 971 999

Level 3 /11 National Circ, Barton ACT 2600. PO Box 4502, Kingston ACT 2604. [T] 02 6273 9000 [F] 02 6273 7000
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