Dr Rachel David discusses hospital default benefits and quality of care on ABC Radio

Station: ABC Radio Melbourne
Program: Mornings
Date: 12/10/2022
Time: 9:38 AM
Compere: Virginia Trioli
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


VIRGINIA TRIOLI: I’ve got a very serious story running on the ABC News website today written by Jessica Longbottom. Accusations of an unsafe psychiatric facility, inexperienced staff, profits ahead of patients, a toxic culture fuelled by a focus on the bottom line, and a number of calls very strongly backing that up from people who have been patients or who have had people they care for being patients there and also from former staff members, and it’s very hard to ignore those particular criticisms. Dr Rachel David is the CEO of Private Healthcare Australia. Now, that’s the organisation that represents the health insurers. So of course, they’ve got a very strong interest in this because it’s the insurers then that will pay for the patient’s attendance at these private centres. Dr David, good morning. Good to talk to you.
RACHEL DAVID: Good morning, Virginia.
VIRGINIA TRIOLI: First of all, just for clarity, can I just ask what sort of doctor of you are?
RACHEL DAVID: Look, I’m a medical doctor, but I haven’t practised for some years.
VIRGINIA TRIOLI: That’s fine. What’s your view of the allegations contained in the ABC story today?
RACHEL DAVID: Look, I’m absolutely appalled. The vast majority of private hospitals and private mental health facilities are out there trying to do the right thing in an environment where there is very, very high demand for services. And people living with mental health conditions are among the most vulnerable in our community. The majority of mental health services that are inpatient or provided in hospital are provided in the private sector. So we just have a collective responsibility to do a lot better.
VIRGINIA TRIOLI: Has it come as a surprise to you? Have you heard anything before this story’s been published about Essendon Private Clinic? What’s been fed back to you?
RACHEL DAVID: Look, I have heard that over the years health funds have had some difficulty in dealing with the parent organisation in terms of very aggressive, financially driven tactics used in contracting. So it has been on our radar, but this is the first time we’ve heard or seen these terrible stories about poor quality care coming directly from staff and patients and that is an absolute red flag.
VIRGINIA TRIOLI: So you’ve been aware of aggressive tactics by Macquarie Healthcare?
RACHEL DAVID: That’s right, yeah. That’s been a situation that’s now gone on for some years.
VIRGINIA TRIOLI: And what, if anything, has your organisation done about that?
RACHEL DAVID: Look, there’s not a lot we can do under the legislative constraints that govern private health insurance. Health funds usually fund private hospitals through a contract process, but even if they fall out of contract with the private hospital, they still have to pay that hospital 85 per cent of what they otherwise would have. So we don’t have a lot of levers. The responsibility for accrediting that a private hospital is providing its services appropriately really lies within your- in this case the Victorian State Government.
VIRGINIA TRIOLI: To accredit this facility or not?
VIRGINIA TRIOLI: Have you drawn your concerns to the attention of the State Government and the Health Minister?
RACHEL DAVID: Yes, so we will be doing that now. Our…
VIRGINIA TRIOLI: [Interrupts] Sorry, just to jump in there, Dr David. Up until now, particularly in relation to those aggressive pricing tactics, have you expressed any concerns about that previously to the State Government?
RACHEL DAVID: Well, in terms of the financial situation, that’s something which is really on the onus of the health funds to resolve. But when it comes to quality and patient safety, every hospital, whether it’s private or public, operating in the state of Victoria, that is the responsibility of the Victorian State Government to investigate and control. And we really weren’t aware of the extent of these problems until we were informed by the ABC just recently.
VIRGINIA TRIOLI: No, I get that. But what I’m talking about is that if as the representative of the health insurers, you’ve been aware of aggressive pricing policies that just logically then are going to have an impact on quality of care. Because if you’re pricing things aggressively, that means you’re actually putting a focus on profits, which logically has to impinge on the care that patients get. Don’t you have a responsibility to take that conversation further with someone, with anyone, with the State Government or another governing body?
RACHEL DAVID: Yeah, look, we have actually raised it with the federal government. That is- I mean, and this is a bit of a spaghetti bowl of regulation which is part of the problem.
VIRGINIA TRIOLI: [Interrupts] Okay. Just tell me- just so we can proceed logically. Just tell me about that. So what exactly, if anything, have you done when you as an organisation became aware of aggressive pricing policies that logically are then going to impinge on quality of care? What have you done about that?
RACHEL DAVID: Look, we’ve done a couple of things. When we became aware that this story was going to air, which is a few weeks ago, we…
VIRGINIA TRIOLI: [Interrupts] I’m sorry, I’m going to jump in again.
VIRGINIA TRIOLI: This is not about this story. You’re telling me that for some time it’s been a long running problem, Macquarie’s aggressive pricing policy. What, if anything, before this story was drawn to your attention, did you do about that or did you do nothing?
RACHEL DAVID: No, we contacted the Federal Department of Health, which regulates the contracting or the financial arrangements that health funds have with hospitals.
VIRGINIA TRIOLI: And what did you say?
RACHEL DAVID: And I said, look, I’ve had some- we’ve had some issues in contracting with this particular group, and we’re hoping to resolve them without any impact on patients. But it is- but it’s a continuing concern, and now that these other issues have been raised relating to patient quality and safety, I understand that that will be- that that is highly likely to be escalated.
VIRGINIA TRIOLI: So you mean not much was done after your first complaints, only now? Because it just seems I’m not the only person in the world here, Dr David, who is going to draw a very strong link between those aggressive pricing practices that then logically lead to a diminution in care and service because you’re trying to fatten your profit margin.
RACHEL DAVID: Well, look, I totally share your concerns. And what’s happened is A, a disgrace, and B, unusual. But we need to consider protecting the consumer here first. So what’s happened? So what would happen if- you know, we could complain about the financial process of contracting with hospitals. But then what happens is the only avenue that’s open to health funds at that point is to go out of contract with this hospital. That’s the only stick, if you like, that a health fund has. Even if a health fund does that, it’s still obliged under federal legislation to pay that hospital. We can’t not pay that hospital because if that was the situation, then consumers would just be charged enormous co-payments and they may not have anything or anywhere else to go.
VIRGINIA TRIOLI: [Talks over] Look, I understand that in terms of the system- yeah, of course.
RACHEL DAVID: So- yeah. So- but we are- I can absolutely assure you, we have raised our concerns. And when we became aware of the specific problems that the whistleblowers, the brave people who’ve come forward have raised with the ABC, we will not be letting this go. All right?
VIRGINIA TRIOLI: I know that Private Healthcare Australia, your organisation, has said that private health insurers have paid about $7.3 million to Essendon Private Clinic over the last year. That’s about $739 per night per patient. That’s the majority of the hospital’s income. Now the rest comes from the Federal Government. So there’s a massive interest here in both the Federal Government and your organisation being absolutely assured that private insurers’ money and also public money is going to an appropriate organisation and a facility that provides appropriate care. So the onus is now squarely on your organisation and the Federal Government and the State Government for licencing it, too.
RACHEL DAVID: Yeah. Yeah, well that’s right. And I think part of the problem here is that there are so many cooks in this regulatory system and that’s something that, you know, again, it’s another problem that we’ve raised repeatedly. You know, there are too many people that are being held responsible. At the moment, the bottom line, rightly or wrongly, does lie with the Victorian Government. And my biggest concern is when they licenced this hospital to operate, did anybody at any stage physically inspect that hospital or talk to the staff? It’s very easy for people to review paperwork and tick off a kind of paper based accreditation. But the important thing that we’re looking for here is did anybody visit the hospital and under what circumstances did that occur?
VIRGINIA TRIOLI: That’s a reasonable question, and that’s one that I’ll take on and put to the State Government. But I’m going to turn that question around and give it to you as well. Dr David, when your organisation became aware of this troubling aggressive pricing policy by the parent organisation, did anyone from your organisation go and inspect Essendon Private Clinic to see if that aggressive pricing policy was starting to have an effect on care?
RACHEL DAVID: Look, I am aware that some funds have conducted audits of hospitals like this in Victoria, and specifically [indistinct] Essendon Hospital…
VIRGINIA TRIOLI: [Interrupts] But did- did yours do this in relation to Essendon?
RACHEL DAVID: That would not really- because we’re a policy and advocacy organisation, it would really be up to the health funds to do that, and I understand that is part of the contracting process with health funds. But let me come back to the fact that even if they found everything that has been raised on the ABC, they cannot legally withdraw payment from that hospital.
VIRGINIA TRIOLI: No, I understand that.
RACHEL DAVID: It’s impossible.
VIRGINIA TRIOLI: I understand that there needs to be a framework around it, but you take steps in order to get to that point, if that’s the point that one needs to arrive at. But I’ll take that up with the State Government and others as well. Dr David, I appreciate your time today. Thank you.
RACHEL DAVID: Thanks very much, and thanks for raising this important issue.
VIRGINIA TRIOLI: Dr Rachel David, CEO of Private Healthcare Australia, which was apparently onto real concerns.
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