Opinion
Back in the early 2000s, Australia was looking down the barrel of what the AMA called “arguably the biggest potential disaster the medical community has ever faced”. Skyrocketing medical indemnity costs were forcing more and more doctors out of practice. A meeting of 5000 doctors in Sydney threatened to pull every doctor in Australia out of practice if something wasn’t done.
Even today, few Australians appreciate how close the medical system came to complete collapse. Luckily, Australia back then had a competent government. John Howard appointed Tony Abbott as Health Minister: it’s not exaggeration to say that Abbott saved the Australian medical system. Then AMA president Bill Glasson recalls that, “Abbott personally got into that medical indemnity package. He worked on it day in and day out… The people of Australia don’t understand. If they didn’t have him in that job, we would have pulled out all the doctors.”
Unfortunately, Australia is now run by a government whose incompetence is legendary.
Right at a time when the hospital system is facing another existential crisis.
The $19bn private hospital sector is in financial crisis, with skyrocketing wages, energy, insurance and debt costs fuelling concerns that more hospitals, health clinics and dental surgeries will close, a secret high-level study has revealed.
Behind the crisis are a range of issues. One of the biggest is the direct result of demented “Net Zero” policies — and the apparent failure of the chattering class to grasp that, firstly, “Net Zero” is ruinously expensive, and, secondly, that when the cost of energy rises, so does the cost of everything else. Australians should have learned that lesson from Julia Gillard’s carbon tax.
The other big cost rise, as it was in the earlier crisis, is insurance premiums.
The study, labelled commercial in confidence and worked on as late as February 27, found private hospitals’ energy and utilities bills were up 13.8 per cent compared with a year earlier, insurance was up 10-15 per cent, interest rate-driven debt costs were up 6 per cent while workforce costs were up by 3.5 to 4.5 per cent.
Sources say Health Minister Mark Butler and his department’s secretary Blair Comley were briefed on the findings of the EY report, as a critical plank of the health system comes under threat, sparking warnings millions of people could go without access to healthcare.
Yet Labor have, til now, run silent on the crisis. No doubt because they don’t want to puncture one of their few strengths: the (false) perception that they are the better party to manage health care. Just as Labor sat on the latest round of health insurance premium rises until after the Dunkley by-election.
The study comes after Mr Butler revealed this year’s average health premium increase would be 3 per cent, further stretching the affordability of health costs for families, after out-of-pocket expenses for private medical services increased by 38 per cent in the past three years […]
Australian Private Hospitals Association chief executive Michael Roff said the paper highlighted the most challenging economic time for the sector in living memory. He blamed unavoidable increases in hospital operating costs and funding from insurers not matching inflation.
Australian Medical Association president Steve Robson said the private sector was in crisis as he accused health insurers of failing to adequately reimburse hospitals for services. He called for an independent body to conduct a review of the remuneration arrangements between private health insurers and private hospitals to ensure the viability of the sector into the future.
While the Labor-Greens left would no doubt dearly love to see the private sector forced out in favour of their beloved public system (as they are doing by force in Canberra), they completely fail to understand what a disaster that would be. When the head of Catholic education in Australia threatened to close every Catholic school in 1962 and dump their students on the public school system, the Menzies government panicked. If the private hospitals closed down, the already-swamped public hospital system would collapse completely.
With about two-thirds of all elective surgeries occurring in the private sector each year, experts warn further private hospital closures threaten to swamp Australia’s overwhelmed public system.
Industry sources not permitted to speak on the record said about 30 per cent of private hospitals and clinics were forecast to shut down if the government failed to act.
According to figures from the Department of Health, 71 private hospital services have closed in the past five years including 48 day hospitals, four psych hospitals and 17 overnight hospitals.
At least six private hospitals have closed in the past 16 months, heaping pressure on surrounding public hospitals, while workforce issues have forced the closure of a host of private ICU and maternity units, including at Brisbane’s Mater Hospital, Epworth Geelong, Cairns Private Hospital and Sunnybank Private Hospital in southwest Brisbane. A further two private mental health services, run by Wesley Mission, shut their doors last week, with inpatients likely to spill into the public system or go without treatment all together.
Meanwhile, private health insurers are swimming in money.
Mr Roff said the private health insurance industry had record profits: $2bn last financial year, up from $1bn the year before. “This insurer bounty has come at the expense of private hospitals, with payments from insurers failing to keep pace with inflation,” he said.
Insurers, for their part, are squealing indignantly.
Private Healthcare Australia rebuffed the claims, saying insurers were also bearing the brunt of high inflation, which was “driving up the cost of everything health funds pay for”, and funds were spending more in cyber security and IT services to support billing and claims.
The Australian
Does anyone want to count on the Albanese government to solve this mess in a hurry?