Federal government concern about states ‘double-dipping'

The Federal Government says it’s looking closely at how state run hospitals are charging privately insured patients for public admissions.

The Australian Financial Review reports the Assistant Minister for Health, David Gillespie, says the federal government is increasingly concerned about privately insured patients being charged for treatment in public hospitals

"[Minister Greg Hunt] and I are very worried about it. It is a way of cost-shifting – whether it is harvesting private patients in public hospitals ... or whether it's pushing work to the private system that otherwise would have been done in the public system," said Dr Gillespie on Wednesday.

Dr Gillespie worked as a doctor for 33 years, including 21 years as specialist gastroenterologist and consultant specialist physician before entering parliament.

He says the private health insurance rebate means more funding actually goes back to the states to run hospitals.

“(States) get their case mix and volume of patients decreed number at the most efficient price and [then] they double dip under health insurance, they can't have it both ways – it's one or the other".

Patients need better information

Earlier this year the Australian Institute of Health and Welfare released figures showing private health insurers paid more than $1 billion to public hospitals in 2015 alone.

Bupa has long called for a crackdown on the practice, reiterating the point earlier this year in a submission to a Department of Health consultation.

“We believe there should be much greater scrutiny of, and transparency regarding, the information provided to members to help them make decisions to either elect to be a private patient or exercise their right to be a public patient,” Bupa said.

“Current behaviour by many public hospitals sees many Bupa members receiving a bedside visit after a procedure or letters two or three months after an event pressuring them to declare their private cover and we believe this is unquestionably inappropriate and contrary to the intent of private patient declaration.”

Bupa says it's comfortable with customers receiving treatment in a public hospital as a private patient if that's their personal choice, or it's the appropriate place for that treatment to occur (for example complicated pregnancies).

Stays should match payments

The insurer also says if a Bupa customer is going to be charged as a private patient, their hospital experience should align to the extra benefits being paid, such as a private room and choice of surgeon.

Bupa says public hospitals should only be able to charge private patients in the case of;

  • pre-booked admissions (e.g. not emergency);
  • if they have contracts with health insurers, with the contract to allow compliance, monitoring and audits, as per arrangements with private hospitals; and
  • if the patient signs a statement prior to admission, submitted to insurer at least 24 hours prior to hospitalisation, with the statement clearly spelling out the additional benefits that will be received as a private patient e.g. choice of doctor.

The peak private health insurance group, Private Healthcare Australia, wants more transparency from the states on the consent process when admitting patients.

It’s called for the removal of state government quotas for non-source revenue with increased monitoring of private patient flows through public hospitals.

“At a state level, an unspoken encouragement of public hospital cost shifting seems to be growing. If every State and Territory achieved cost shifting at the same level as NSW, which is 3.2% of all public hospital costs, it would cost an additional $500 million annually. This would potentially drive premiums up a further 2.8%”