Private hospital funding rates surge past public

Posted February 12th 2008

by DPS

Government spending on private hospitals is growing at more than triple the rate of funding for the public sector, according to the Annual Report on Government Services, prepared by steering committee of officials from the commonwealth, state and territory governments.

The committee examined $120 billion in government expenditure – almost 13% of Australia’s gross domestic product.

The total amount spent on public hospitals – excluding services such as community health, dental and ambulance services – was $22.5 billion in 2005-06. Public hospitals received a total of $24 billion from government ($22.5 billion) and non-government ($1.5 billion) sources, or 40.8% of recurrent government health funding in 2005-06, down from 43.2% one decade prior.

“This decline reflects the more rapid growth over the decade of government expenditure on private hospitals and medications,” the report said. “The average annual growth rate of government real expenditure on private hospitals was 25% between 1995-96 and 2005-06, compared with 9.3% for medications and 7.9% for public hospitals. Nationally, total recurrent and capital health expenditure per person in 2005-06 was $3,758.

The Private Health Insurance Incentive Scheme, which provides a 30% rebate on private health insurance premiums, cost the Federal Government $2.1 billion in 2001-02 and blew out to $3.2 billion in 2005-06.

Nationally, it takes 237 days for 90% of people waiting for elective surgery to be admitted to a public hospital, while 4.6% of patients had to wait more than one year, the report shows. For 90% of elective surgery patients in the ACT, the wait is longer than one year at 372 days. The next longest waiting period is in Tasmania, followed by the Northern Territory, New South Wales, Victoria, South Australia, Western Australia and Queensland.

One in five aged care patients spent 35 days or more in a public hospital, the report shows.

Federal Minister for Ageing Justine Elliot said elderly people were stuck in hospitals because the Howard Government allowed the number of aged care beds to dwindle. She said it cost $937 million a year to accommodate 2,300 elderly people in hospital when it would only cost $83 million to provide more appropriate aged care services.