Hospitals go from bad to worse while gov't dithers

THE juxtaposition is jarring. New data from the Australian Bureau of Statistics shows the widening gulf between the funders and providers of healthcare, with private health insurers reaping operating profits of $2.69 billion last year while private hospitals suffered a $756 million loss.

The ABS Industry Data for 2024-25 shows private hospitals employed 158,600 Australians (up 3,200 on the previous year), paid some $12 billion in wages and salaries, generated almost $25 billion in healthcare services income and contributed $15 billion to the Australian economy. Despite this massive contribution, the sector continues to go backwards.

"The Federal Government's own data dispels any suggestion that the crisis facing private hospitals is overstated," APHA CEO Brett Heffernan said. "Nobody can say they weren't warned about the state-of-play or the consequences to come.

"Private hospitals have upheld their side in employing more people than ever, delivering more healthcare to more patients than ever, and contributing more to the economy than ever. In contrast, health insurers are insuring more people than ever, who are paying the highest premiums ever.

"Yet the system is dysfunctional due to the greed of insurers. In fact, under the Albanese Government's four years health insurers have reaped the biggest profits in their history, with the annual premium increases the government approves largely being banked instead of funding patient care in full.

"It has gone on too long. The Albanese Government can no longer hide. It has direct skin in the game. When you increase the premiums Australians pay for health insurance, you have a responsibility to ensure insurers actually pay for healthcare instead of just pocketing higher profits.

"These figures prove the system is being rorted by insurers. When hospitals employing the workforce, treating patients and carrying the rising cost of healthcare are operating at a loss, while the insurance companies charged with funding patient care continue to reap record multi-billion-dollar profits, clearly the system is broken and being abused."

The ABS figures show the sector's operating result deteriorated from a $36 million loss in 2023-24 to a $756 million loss in 2024-25. Capital expenditure fell from $782 million to $754 million despite increasing demand for healthcare services.

"It tells us private hospitals have to cut services and wind back investment in healthcare in a bid to stay open and that is increasingly tenuous," Mr Heffernan said. "That undermines the quality, timely access and choice for which people pay their health insurance premiums.

"That the private hospitals are treating more patients than ever while running at massive losses should alarm every Australian who expects to have access to quality and timely healthcare. The only ones not keeping pace with patient needs are health insurance companies. No reasonable person can look at those figures and conclude the system isn't broken.

"We maintain the easiest and quickest fix is for the Albanese Government to do what it said it would if the insurers didn't voluntarily return to pre-Covid payout ratios of 90%. That is, legislate the 90% benefits ratio. It's has been 15 months since that ultimatum and nothing has changed.

"Health insurers must be held to account with a Mandatory Code of Conduct for contracting with private hospitals. An arbitration model with price transparency, overseen by the ACCC, is essential in tandem with the 90% guarantee to ensure consistency and fair terms."

-ENDS-

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