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Private health system is key in fixing the public hospital crisis

Private health system is key in fixing the public hospital crisis

A compelling opportunity now exists to revolutionise Tasmania’s healthcare system, but it requires the entire network – including governments – to be brave, recognise that opportunity and to work together to bring it to reality.

It was shown to be possible during COVID when the entire Tasmanian healthcare network, both private and public in league with government, demonstrated the ability to work cohesively in the face of the most serious community health crisis faced in a generation.

As challenging as COVID was, there are other challenges which pose much greater long-term difficulties for the health system.

As a population, it is well documented that we are getting older. At the same time, we are getting sicker with increasing rates of chronic disease. The result of this is our public hospital system is constantly struggling to meet the health needs of the people who rely on it.

Public hospital waiting lists are ballooning to record levels. Emergency departments are full. Hospital beds are blocked to the point where even patients who require admission have to wait because there are simply no beds.

It isn’t always well understood, but the private health system plays a critical role in reducing demand and pressure in the public system.

Put simply, the more people who can access care and treatment in the private system and not rely entirely on the taxpayer-funded resources of the public system, the less pressure there is on Tasmania’s public hospitals. This means the public system is there for people who need it the most.

For context, more Tasmanians have private health insurance than do not. Just over 275,000 have some form of private health insurance, representing 52 per cent of the population. More than 130,000 of these live in the two southern electorates of Clark and Franklin, and many of them are on low to middle incomes.

The federal government understands the benefits of keeping people in private health care where they are not reliant on taxpayer funded beds, staff and resources for their care. So much so, that a means-tested private health insurance rebate is paid to help people on lower incomes access their health care outside of the public system.

The rebate commenced at 30 per cent. It has been eroded over the years to the point where in some cases, it is less than 25 per cent. While a five per cent erosion may not seem significant, it represents $23 million disappearing from the pockets of Tasmanian policy holders on low to middle incomes every single year.

This can force people back into a public system, where governments are funding 100 per cent of their care. That erosion has contributed to public hospitals being full and elective surgery waiting lists remaining stagnant.

The simplest and most cost-effective way the federal government can ease pressure on the public system is to restore the private health insurance rebate to 30 per cent and give people every incentive to access health care in the private system.

Tasmania needs policies that will allow for genuine reform in the health sector.

Governments need to support a modern and dynamic health delivery approach that sees people provided with timely and appropriate care while keeping them out of hospital, not enshrining hospitals and hospital admission as the only gateway to care pathways.

Under current outdated regulations, private health insurers are only able to fund procedures when they are performed in an admitted hospital setting.

Private health insurance should be able to provide cover for procedures currently undertaken in a hospital setting outside of a traditional hospital, where clinically appropriate, by non-hospital health providers.  Services like wound care, intravenous infusions, rehabilitation and other post-operative procedures could be undertaken under the supervision of a general practitioner, or other health care providers in a community setting.
This would have the immediate effect of reducing inpatient demand at our public hospitals.
Importantly, such a reform would allow fit-for-purpose patient care to be offered at a lower cost, with increased accessibility, and a focus on early intervention that addresses health issues before they become serious.

We need to ensure that private health insurance regulation provides insurers with the flexibility required to keep pace with modern care delivery settings, the changing health needs of our community and actually make it easier for people to access the care they need when they need it outside of hospital, which would in practice keep them healthier or reduce the length of a hospital stay.

Private health insurance reform is a critical piece of the health picture. Without a robust private health system, the public hospital system will continue to buckle and lurch from crisis to crisis.

A world-class healthcare system that meets the challenges of a regional state such as Tasmania is absolutely possible and can be used as a beacon for challenges faced by those living in regional Australia. But we must be willing to take a holistic approach and work together toward the ultimate goal of good community health that we all share.
Paul Lupo 
CEO of St.LukesHealth