has launched an urgent review into the $22 billion private hospital system, as it faces intense financial stress driven by rising labour and input costs and constrained revenue.
“To better understand the sector’s operating environment the department has commenced a focused project to collect revenue, cost, and other data to assess the financial performance, pressures and profitability of the sector.” Private health insurance coverage has grown strongly out of the pandemic with 54.6 per cent of Australians having some sort of coverage in March this year. That amounts to about 14.8 million people, slightly down from record highs of 55 per cent in early 2023.In the year to March 2024, hospital benefits increased 9.7 per cent, or about $17.7 billion.
“For many years costs experienced by private hospitals have risen faster than the indexation applied to benefits paid by private health insurers. Private Healthcare Australia chief executive Rachel David welcomed the review, saying the sector was committed to providing quality care. “Whatever the review comes up with, it will inevitably be limited by the capacity of households to pay.”Australian Medical Association president Steve Robson said the review was overdue, noting two-thirds of all planned operations take place in private settings.
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