Big public hospital fee hikes and aggressive recruitment strategies are hurting the hip pockets of consumers

“The Victorian Royal Women’s Hospital has hiked accommodation costs for private patients by up to 18%, despite COAG seeking to increase public hospital funding by around 6.5%,” Matthew Koce, CEO of Members Health said today.

“The price hikes announced by the Royal Women’s Hospital are just another in a series of announcements over the past five years which have seen prices for some room categories increase by well over 100%”.

“While health fund premium announcements are put under the microscope every year, hospitals such as the Royal Woman’s appear to have been furiously targeting private patients with aggressive accommodation cost hikes.”

Over the past five years, ‘Advanced Surgical’, ‘Surgical’, ‘Obstetric’, ‘Medical’ and ‘Day Surgery’ room categories have all experienced double digit increases ranging from nearly 25% to over 150%.

“In terms of real money this targeting of private patients may in some circumstances represent cost increases to consumers for their hospital stay of over $500 and $600 for some accommodation categories.”

“It is outrageous that while health funds are working hard to relieve the cost pressure on consumers, recently achieving the lowest increase in 17 years, some public hospitals appear to view private patients as cash cows to be taken advantage of.”

“What we are seeing is an example of blatant cost shifting from the State Government run public hospitals to the Commonwealth and to those with private health cover.”

“Those with private health cover may end up paying three times, firstly through their taxes, secondly through their health insurance premiums and thirdly through medical out of pocket costs.”

“While health funds achieved an average premium increase of just 3.95 percent, the lowest increase in 17 years, it is disappointing that some State run hospitals are cynically targeting the hip pockets of those who have chosen to take personal responsibility for their healthcare needs.”

“A recent report by the Australian Institute of Health and Welfare (AIHW) revealed that in 2015-16 privately insured patients generally experienced around half the wait time for elective surgery as non-insured patients in Public Hospitals.”

“While Public Hospitals aggressively recruit private patients the growth in public hospital waiting lists for elective surgery continues, with the national medium waiting time for elective surgery increasing by more than a third since 2001-2002.”

“All the evidence points to an alarming pattern of behavior, with public hospitals implementing aggressive strategies sanctioned by the Victorian Government through the Department of Health to pressure more patients to use their health insurance. This is adding over 1 billion dollar every year to the cost of health insurance premiums and unfairly pushes those without insurance cover further down the waiting list for treatment.

It is extraordinary that public hospitals are now adding $1.1 Billion to the cost of private health insurance premiums every single year. That is simply not sustainable and it is not fair.

“Health funds are regularly receiving complaints that public hospitals are aggressively pressuring sick and vulnerable patients to use their private health cover.”

“Just before Christmas, a 90 year old, discharged public hospital patient, contacted a not-for-profit health fund to report being aggressively pursued to use his health insurance. This gentleman was almost in tears.”

“Many public hospitals are awash with ‘recruitment’ staff, signage and literature pressuring and intimidating private patients to use their insurance for procedures which should be provided for free.”

“Treating private patients as ‘cash cows’ is unfairly hurting the hip pockets of more than 13.5 million consumers with health insurance cover and appears to be encouraging the formation of a two tiered health system.”

“The apparent prioritisation of insured patients in Public Hospitals is likely driven by a need to prevent them from going to a privately run hospital. What we don’t want to see is the evolution of a two tiered public health system that puts those who can pay to the front of the line and those who can’t afford to pay, to the back.”

The most recent COAG Hospital funding Agreement, already signed by the Prime Minister of Australia, Premier of New South Wales and the Premier of Western Australia highlights growing concern among senior ranks of the Government. The COAG agreement specifically refers to private patients in public hospitals, committing signatories:

…to ensure the information and process for patients electing to use private health insurance in public hospital emergency departments is appropriate, robust and best supports consumer choice.

“Members Health congratulates the Federal Minister for Health, Greg Hunt MP for acknowledging and tackling the rapidly escalating growth and excessive charging of private patients in public hospitals. Unfortunately, recent behavior suggests we have a long way to go if this issue is to be properly addressed.”

“Affordability is a key concern for private health consumers and Members Health funds are working hard to keep costs as low as possible. The behavior of some public hospitals is very concerning and we are keen to work with the Federal Government and the COAG process to make sure everyone, regardless of their health insurance status, gets a fair go when they present to hospital.” Matthew Koce said.

“Members Health funds are all not-for-profit, member owned and community based. They only exist to serve their policyholders and return around 90 cents in every premium dollar paid, back to consumers as benefits.”

Members Health is the peak industry body for 23 health insurers which are not-for-profit, member-owned and community based. In all, the Members Health funds provide private health insurance to over 1.7 million Australians.

Further enquires:

Matthew Malone
Director of Policy, Industry and Government Relations
(03) 8831 3372

Download PDF with attachments here: Media Release – Big public hospital fee hikes and aggressive recruitment strategies are hurting the hip pockets of consumers.