Safe and affordable housing a human right
February 13, 2025
Pre-Budget Submission 2025–26 Health Policy
February 17, 2025
Catholic Health Australia (CHA) is calling for stronger, long-term reforms to ensure the sustainability of private hospital services across the country, especially in our regions, as they grapple with mounting financial pressures.
“The government’s reforms announced last year will provide much-needed short-term relief, but we must take bold steps to guarantee the long-term viability of private hospitals,” said Catholic Health Australia CEO Jason Kara.
CHA’s budget submission on health outlines several recommendations to address the financial and operational challenges faced by private hospitals. These include:
- using private hospital capacity to treat public patients on long waitlists
- incorporating current and future hospital costs into the private health insurance premium round process
- adjusting capital reserve requirements for private health insurers to free up funding
- ensuring the entirety of the private health insurance rebate is allocated to patient benefits not insurer management expenses
- subsidising wage growth in private hospitals
- move to activity-based funding by introducing a national private price
“Without urgent action, private hospitals — particularly not-for-profit hospitals that put patients before profits and serve the most vulnerable communities — will continue to struggle, putting much needed health services for thousands of patients out of reach.
“We need a fairer system where corporate insurers contribute more to hospital funding rather than prioritising profits at a time when cost of living pressures are placing greater burden on families.
“Our analysis shows that over the last six years, insurers’ hospital premium income has risen by 16.5 per cent, while benefits paid to patients have increased by only 8 per cent.
“Insurers are making ever bigger profits while returning less and less to patients and hospitals. This imbalance is threatening the viability of private hospitals, which play a crucial role in alleviating pressure on the public system. We must ensure that funding reaches the frontline of care.
“In the long-term, CHA is calling for the introduction of a National Private Price, which would align price growth with the real costs of delivering care — similar to what occurs in the public sector,” said Mr Kara.
The government’s Private Hospital Sector Financial Health Check in November, an initiative called for by CHA, confirmed the private hospital sector is facing serious viability issues, especially in delivering critical services like maternity and mental health, with more than 70 services closing in the past five years.
Reform options, proposed by the Department of Health and Aged Care in January for consultation, include increasing default benefits for non-metropolitan hospitals, boosting the supply of international psychiatrists, expanding maternity cover to be included in more insurance policies beyond just the Gold level plans, and requiring insurers to fund hospital-in-the-home care.
“CHA has submitted detailed feedback on these reform options and will be working with the government over the coming months to refine and implement policies that support the viability of private hospitals and ensure they can continue delivering high-quality care for all Australians,” Mr Kara said.
