It’s such a delicate operation trying to cover health care costs

Federal funding crackdown could have an unhealthy side-effect, warns Martyn Goddard

TASMANIA’S

public hospitals stand to lose nearly $40 million a year in a federal crackdown on the practice of having patients pay for their treatment through private health insurance.

Official figures show the treatment of more than 21,500 patients admitted to the state’s public hospitals in 2015-16 was paid for by health insurance, not the State Government. The number has been growing rapidly as hospitals, hit by government funding cuts, struggle to raise the money they need.

It has become a key element of State Government policy. Our hospitals are given targets for the numbers of private patients they are expected to enrol. Now the Federal Government wants to call a halt. Almost one public hospital patient in every five is a fee-paying private patient, a fundamental departure from the principle that all Australian public hospitals should be free.

Another $47 million came from treating private patients who were funded by other insurance schemes or who paid their own hospital bills.

All up, our public hospitals made $82 million from treating fee-paying private patients.

At the Royal Hobart Hospital, 23 per cent of patients are treated as private. At the Launceston General Hospital the figure is 17 per cent, and at the North-West Regional Hospital 11 per cent.

Hospitals around the nation, including ours, employ people whose sole task is to persuade patients to allow their bill to go to their insurer, rather than taking money out of the hospital’s own inadequate budget.

All states have followed the same procedure, but Tasmania is second only to NSW in its enthusiasm for the process.

Health care costs do not go away just because the State Government doesn’t want to pay for them. In this case, the cost has fallen on private insurers, the Federal Government and, ultimately, individuals.

It has been vigorously opposed by private insurers, private hospitals and the Federal Government.

It forces premiums up for everyone by about $350 for a typical family hospital cover. The insurers argue that public hospitals are a government responsibility, not theirs.

Private hospitals resent the higher premiums for driving people away from private health care and accuse public hospitals of stealing their customers.

And the Commonwealth, which pays almost 30 per cent of private insurance premiums, sees it as illegitimate costshifting and wants to stop it.

Federal Health Minister Greg Hunt has put forward a five-point plan to make it difficult or impossible for public hospitals to continue charging private health funds.

If that happens — and Mr Hunt is determined that it will

— a lucrative funding stream on which our hospitals have come to rely will dry up.

There is no suggestion the Commonwealth will move to plug the funding gap. If the State Government is not prepared to pick up the bill, hospitals will have to treat fewer patients.

State governments, including ours, have been remarkably silent on the threat to the funding of their hospitals. And the Hodgman Government has no basis to argue convincingly against Mr Hunt’s crackdown.

The Tasmanian Government massively under-funds this state’s health system. It spends more than $300 per head of population less than the rest of the nation, an under-spend amounting to at least $140 million a year.

On top of that, $260 million this year in GST money redistributed from other states and given to us in recognition of our greater health needs is being used instead for other government priorities.

In all, our Government would have to increase funding by about $400 million a year to give Tasmanians a national-average standard of care. Most of that money would go to hospitals.

The founding principle of public health care — that you should be treated according to your need, not according to your wealth — is being undermined. At the very least, there are strong incentives for public hospitals to favour feepaying patients.

Though they all deny doing this, there is evidence private patients get a better deal than public patients. Perhaps the most egregious example of this is that, nationally, elective surgery patients whose private insurance is billed have to wait less than half as long for their operation than public patients.

Although hospitals promise no patient paying through private insurance will incur any direct costs, some people get bills from their surgeon or anaesthetist. When challenged, these are usually withdrawn — but many patients pay up anyway.