Research shines light on maternity

Not only is having your baby safer in private hospitals with a continuum of care for mums and bubs, it's also cheaper. Extract from the Monash University study:

"In these 368,292 matched pregnancies/births over four years to December 2019, the standard public model had an extra:

• 778 stillbirths or neonatal deaths (0.9 versus 0.4 per cent)
• 2,301 neonatal intensive care admissions (3.5 versus 1.3 per cent)
• 3,273 women with more severe vaginal tears (2.5 versus 0.7 per cent)
• 10,627 women with postpartum haemorrhage or excessive bleeding (9.6 versus 3.8 per cent)
• $5,929 cost per pregnancy ($28,645 versus $22,757) including costs to all payers when compared to the private obstetric-led model."

The overall additional cost of the standard public system is estimated at around $400 million annually, indicating potential for cost savings with private obstetric-led care.

Expanding access to continuity of care models provided in private obstetric-led care will improve clinical outcomes, but, ultimately, save taxpayers.

However, just 20% of all births are private today - down from 30% a decade ago and 40% the decade before that. Hefty out-of-pockets, often in the order of $10,000, are the reason for the collapse.

A key driver of this is maternity cover is only available at the Gold level of private health insurance. Despite paying top dollar premiums, often for years, mums-to-be are shocked to learned they are not covered for their obstetrician. Insurers have been selling maternity cover while being pretty confident it won't actually be used due to the associated out-of-pocket costs.

As a result, in the last decade 14 private maternity services in Australia have closed. Once cross-subsidised by other parts of hospital operations, this is no longer viable as health insurers refuse to meet the actual costs of care in private hospitals. Underpayments to hospitals for the care they provide total over $3 billion in just the last three years.

If the shutdown of private maternity wards continues, taxpayers could be up for, at least, an extra $1 billion a year to fill the breach.

Meanwhile, mothers and their babies are increasingly being left with fewer and less safe options.

The full research paper Maternal and Neonatal Outcomes and Health System Costs in Standard Public Maternity Care Compared to Private Obstetric-Led Care: A Population-Level Matched Cohort Study, by Professors Emily Callander and Helena Teede at Monash University, released in July 2025, is available from the Research section of this website.

Next Research:
31/8/2026 Economic Contribution of Australian Private Hospitals