Public hospitals cashing in on private patients with massive fee hikes

Public hospitals are hiking up fees for privately insured patients and adopting aggressive, tactics to prop up poorly managed budgets, says the peak body for 27 of Australia’s not-for-profit health insurers.

Fee notification letters from one of Victoria’s leading public institutions The Royal Women’s Hospital show accommodation charges for private patients have, in some instances, risen by between 50 and 124 per cent over the past five years.

In the past year alone, 1- to 14-day accommodation for Advanced Surgical and Surgical patients have increased 38 per cent, according to letters sent to health funds and seen by Members Health.

“With reports in the media of the Victorian government putting the squeeze on public hospital budgets – despite ever increasing Commonwealth funding – it comes as no surprise that hospital administrators are seeking other ways to prop up their revenue streams,” said Members Health CEO Matthew Koce.

“But that’s no excuse. The letters from the Royal Women’s Hospital are yet another in a series of announcements over the past five years, which have seen prices for some room categories more than double.”

“These fee hikes are the consequence of blatant cost shifting by the State Government, forcing public hospitals to make up funding shortfalls by seeking more money from people with private health cover.”

In addition to these shameless fee hikes, Members Health regularly sees explicit evidence of public hospitals aggressively pressuring private patients to use their cover for services otherwise covered by Medicare.

“This pattern of behavior – State governments cutting funding and public hospitals targeting privately insured patients – is adding well over $1.1 billion to the cost of health cover every year and unfairly pushing those without insurance further down the waiting list for treatment.”

“Yesterday’s news of more than 20,000 sick Victorians having their surgeries further delayed because of massive State budget cuts eliminates any doubt over why public hospitals are hiking their fees for private patients at such exorbitant rates,” Mr Koce said.

“For those without private health insurance, waiting lists in the public hospital system can run into the years for painful and debilitating conditions.”

In 2017-18, Australian Institute of Health and Welfare figures showed the median waiting time for elective surgery in public hospitals rose to 41 days overall – 44 days for public patients and 22 days for patients who used private health insurance to fund all or part of their admission.

“It’s outrageous that while health funds are working hard to relieve the cost pressure on consumers, recently achieving the lowest increase in 18 years, State-run hospitals appear to be treating privately insured patients as cash cows to be taken advantage of and are pushing public patients to the end of the queue.”

“We congratulate 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, this most recent behavior suggests we have a long way to go.”

“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 is the peak industry body for 27 health insurers which are not-for-profit, member-owned and community based. In all, the Members Health funds provide private health insurance to more than 3 million Australians.

Full media release and supporting data: 2019-11-15 Members Health_Media release RWH Fee Hikes