For years, we’ve been repeatedly told that when Governments plough public money into subsidising private health insurance and private hospitals, they’re doing it to help the public hospital system.
Prue Power is executive director of the Australian Healthcare & Hospitals Association, which represents public healthcare, and whose members include Queensland Health, South Australian Health, Tasmanian Health & Human Services, Northern Territory Health and ACT Health.
It’s time, she writes below, to expose the fallacy of this argument:
“A common argument coming from the private health sector is that the Government should support private care in order to take pressure off the public hospital system. This argument has two significant flaws.
Firstly, it assumes that public and private hospital services are inter-changeable and thus that demand for public hospital services will be reduced by encouraging consumers to access private care. In reality, public and private hospitals provide a very different set of services, with only limited duplication in some discrete areas.
For example, public hospitals provide almost 100 per cent of emergency services and deal with the vast majority of unplanned admissions. Public hospitals also provide a number of highly specialised services not provided in the private sector, such as organ transplantation. In addition to this, public hospitals are much more likely than private facilities to provide less profitable services, such as major burns and paediatric care.
In the event of a public health emergency, such as a flu pandemic, it is public hospitals that are expected to deal with the sudden increase in demand for care. This means that the public hospital system is required to maintain a much greater reserve capacity than the private sector, which focuses mainly on planned admissions.
In rural and regional areas, the majority of hospital services are provided through the public system. There are very few private hospitals in the bush, primarily due to the higher cost of providing care in rural settings and the lower levels of demand.
In some areas, such as elective surgery, consumers have a choice about whether to access care in a public or private hospital. However, all Australians, regardless of their private health insurance status, rely on public hospitals to provide them with high quality care in an emergency and for services not available in the private system.
Secondly, the argument that by supporting private health care pressure will be taken off public services assumes that both sectors operate independently of each other and that therefore increases in activity in the private sector can occur without taking resources away from the public sector. This argument is also flawed.
One of the greatest constraints on the ability of public hospitals to provide additional services is workforce restrictions. There is a fixed health workforce in Australia, with shortages in many key areas.
If the private sector provides additional services, it requires a larger health workforce. These doctors, nurses and allied health workers are likely to come from public hospitals, thus further depleting the capacity of the public system.
Supporting the private sector to provide additional services means that public hospitals will have fewer staff to care for their larger and sicker patient population.
Both public and private hospitals play an important role in Australia’s health system and both should be supported by Government. However, given their different service mix, and the constraints of a fixed health workforce, they should not be treated as two independent and interchangeable systems.
If the government is serious about supporting the public health system, it should do so directly and not rely on the private sector to reduce the pressure on overworked public hospitals. ”
More reading about these matters in this recent column from The Age.
