Following reports about the sustainability of some private hospitals earlier this year, the Government directed the Department of Health to undertake a Financial Health Check of the sector in May.
A summary report was released today. Click on the links below to download a copy.
Download Summary (PDF) | Download Summary (Word)
Findings from the Private Hospital Sector Financial Health Check
The Financial Health Check provides an analysis of the challenges faced by the private hospital sector. To protect the commercial information of the private hospitals, a short summary report was released publicly today by the Government.
It found that while parts of the sector have remained strong, there has been a reduction in profitability over time as costs have risen faster than revenue.
The data assessed by the Health Check shows the private hospital sector has faced a number of shocks including the COVID-19 pandemic and it continues to experience a degree of volatility, due to inflationary pressures and workforce challenges which are working through the system.
There are some positive signs of growth in admissions, and more recently indications that a number of private health insurers have offered additional funding to some private hospitals. Data is not yet available to the department to determine whether this will significantly improve profitability.
In undertaking the Health Check, healthcare providers identified a number of services that were increasingly difficult to offer. Two particular services of concern are obstetrics and mental health.
Establishment of the Private Health CEO Forum
Following the release of the summary report today, the Minister for Health and Aged Care, Mark Butler MP, announced that the Government will establish a Private Health CEO Forum.
The forum will bring together leaders from private hospitals, private health insurers, medical groups and independent experts to develop short term options for government consideration, and to commence work on long-term reforms to strengthen the sector’s financial viability.
Mixed stakeholder reaction
Both Catholic Health Australia and the Australian Medical Association welcomed the release of the summary report and announcement that the CEO Forum established as part of the review will continue. The Australian Private Hospitals Association however was critical saying, “what was released today fails to make clearer the path forward, let alone flag any solutions.”
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