For positive productivity, partner with private hospitals

AS the nation prepares for the Treasurer's Economic Forum this week, decision-makers are being reminded of the vital contribution private hospitals make to the health economy and that it needs to grow. Failure to act on viability issues is already having far-reaching ramifications for healthcare delivery, shifting more costs to the public system, and undermining productivity.

"We remain positive about the role of private hospitals in Australian healthcare delivery, but we need Federal and State Governments to come with us," APHA CEO Brett Heffernan said. "And it doesn't have to cost anything.

"Taxpayers get a massive return on zero investment in private hospitals. Just 633 private hospitals carry out 70% of planned surgery, 61% of acute mental healthcare, 81% of rehabilitation and 1.66 million medical treatments each year, including 54% of chemotherapy. They do so in high quality facilities with state-of-the-art treatments and services.

"It's an enormous chunk of the healthcare needs of Australians. In fact, more than 5.14 million patients were admitted to private hospitals last year, up 3% on the year before. But they could be doing much more if the shackles of bureaucratic red-tape and insurer intransigence are removed.

"Private hospitals do all this with no government funding. Of course, health insurance companies pocket some $7 billion a year from taxpayers for the various rebates on policies.

"In comparison, taxpayers are forking out around $400 billion for 675 public hospitals over the five-year life of the federal-state healthcare agreement. That figure is set to soar with the new agreement currently being negotiated.

"A more collaborative partnership between private and public hospitals, making the most of private facilities, capabilities and spare beds, needs to be a priority. It was relied upon by federal and state governments during COVID but has quickly been forgotten. That needs to change.

"Pleasingly, last week's Productivity Commission Interim Report - Delivering quality care more efficiently picked up on these threads, but federal and state governments will need to make concrete commitments for the benefits to be realised.

"Private hospitals have consistently provided high-quality care, expanded treatment options, and alleviated pressure on public hospitals. Their direct contribution to the economy surpasses $24 billion annually, supporting 155,000 direct jobs and countless more across upstream and downstream industries.

"Yet, ongoing neglect and a lack of strategic support threaten the sector's viability at a time when Australia needs it most. Importantly, private hospitals are not seeking taxpayer dollars, just a better deal from health insurance companies making record profits while refusing to meet health costs.

"Private hospitals have been at the forefront of technological innovation in healthcare delivery, from the first da Vinci surgical robot, to the first leadless dual-chamber pacemaker and today's AI-driven endoscopy systems. Innovation drives efficiencies, reduce costs and improves patient outcomes, but governments must recognise private hospitals' efforts or risk squandering those gains.

"Despite three years of raising viability issues with the Albanese Government nothing has changed. Private hospitals advance commonsense, budget-neutral recommendations, including:

• Defragmenting Australia's health system to increase efficiency and reduce waste,
• Removing the 10-year moratorium on overseas-trained health professionals to address critical workforce shortages, especially in psychiatry,
• Embracing innovation in health delivery, including hospital-in-the-home, currently blocked from funding by most insurers who only fund these services when they provide them,
• Supporting domestic manufacturing and innovation within the healthcare sector,
• Implementing minimum return ratios on health insurance premiums to safeguard consumer value,
• Streamlining investment channels and reducing bureaucratic barriers for private healthcare providers, and
• Actively involving private hospitals in policymaking processes affecting national health and economic resilience.

"These cost taxpayers and patients nothing," Mr Heffernan added.

"A thriving private hospital sector is not just a healthcare priority, it is a cornerstone of Australia's economic security and national self-sufficiency. As we look to the future, the viability and sustainability of private hospitals are integral to delivering a healthy, productive and competitive Australia."

-ENDS-

The APHA's submission to the Economic Forum is available at Economic Forum Submission.

Next Media Centre:
19/8/2025 Department digs deeper hole for Health Minister

Previous Media Centre:
15/8/2025 PC supports reforms to strengthen healthcare