Hobart Clinic closure another mental health blow

The Hobart Clinic... closing after 40 years of care for Tasmanians due to insurance company greed and government indifference.

HOBART'S last remaining private acute mental health hospital, The Hobart Clinic, will close its doors permanently in October after 40 years of providing treatment to the local community. In many instances, Tasmanians will now have to travel to Melbourne for the care they need.

The Hobart Clinic is just the latest in a string of private hospitals to close in the face of private health insurers profiteering while failing to pay for treatments in full, a situation compounded by the Albanese Government's three years of inaction.

This announcement follows the closure of Toowong Private Hospital in Brisbane in June, another highly regarded acute mental health facility lost to patients and the healthcare system while insurance companies put profit above the interests of their customers. It also follows the closure of Hobart's St Helen's Private Hospital in 2023.

"That health insurance companies rip off their customers and hospitals will likely shock no-one," APHA CEO Brett Heffernan said. "The insurers banked record profits of $2.13 billion and 'management fees' of another $3.4 billion in 2024-25, all syphoned from customer's premiums, while short-changing hospitals by $1.1 billion.

"The irony of dedicated psychiatric hospitals and services being forced to close during a protracted national mental health crisis should not be lost on anyone. That the Federal Government has waited too long to address the deepening crisis on its watch, despite three years of being fully informed on the consequences, is inexcusable."

The Hobart Clinic's Acting CEO Stephen Ayre cited chronically low insurer reimbursements and rising gap fees due to insurance policies that don't cover people adequately, as the leading causes of the hospital's demise. That's 780 patient admissions a year who rely on the hospital and 100 professional and dedicated staff cast aside by insurance company greed.

"The chronic shortfall in hospital contract rates from insurers, despite gouging a $5.53 billion a year take from their customers, has many private hospitals up against the wall," Mr Heffernan added.

"Those hospitals who are managing to remain open during this crisis are cutting back services, like mental health and maternity, in a bid to remain open. But that means insured patients are getting less access, fewer choices and restricted services despite paying higher premiums.

"Mental health patients are falling through the cracks. They are not provided for in the public mental health system, so are relying more and more on their GP to medicate their condition.

"However, when affected by a psychotic episode, they have nowhere to go but a public hospital Emergency Department that is not equipped to deal with their condition. Ultimately, they are simply sent home with the promise of a community follow up visit in three weeks' time. Meanwhile, they and their families live in constant fear and helplessness awaiting their next personal crisis.

"As private hospitals close, the pressure on public hospital services intensifies, leading to longer waiting times and incapacity to deliver timely care.

"Just how many more private hospitals have to close or cut services before governments get the message? Private hospitals are under immense financial strain, and without urgent action to force insurance companies to meet their obligations, more vital hospital services will be lost.

"The Hobart Clinic had an agreement with the Tasmanian Government to help reduce waitlists. The State Government's short-sighted decision not to renew this partnership, which ended in June, further underscores the fact that governments simply don't get it.

"The Hobart Clinic is the only in-patient provider of transcranial magnetic stimulation (TMS) in Tasmania, a non-invasive treatment for those who do not respond to medication for many conditions, including depression. This service will no longer be available.

"Instead, as an out-patient in the public system, there is a limit of 50 treatments under Medicare before a $150 per treatment fee kicks in. Clinicians advise this treatment limit is woefully inadequate. Typically, patients will require three treatments per week, so those out-of-pockets quickly add up. The only alternative is for patients to travel to Melbourne for in-patient TMS treatment.

"Private hospitals are critical to Australia's healthcare system, and the loss of facilities like The Hobart Clinic creates a healthcare landscape where patients are the casualties while health insurance companies bank record profits."

-ENDS-

What private hospitals do:

• 5.14 million patient admissions each year.
• 70% of all planned surgery (1.83 million operations) each year, including the majority of hip and knee replacements, malignant breast cancer procedures, spinal disorders, and eye surgeries.
• 1.66 million medical treatments each year, including the majority (54%) of chemotherapy.
• 61% of acute mental healthcare.
• 81% of hospital rehabilitation.
• Directly employ 155,000 Australians, including 59,132 nurses.

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