Dr Rachel David spoke to ABC radio Hobart about the viability of private maternity units

Talking health and having babies now. Has your private health insurance been affected by the ongoing dispute involving Healthscope, the operator, that is, of the Hobart Private hospital? Now, if you tuned into the morning’s program with Leon Compton today, you would have heard growing speculation that Healthscope is going to scrap maternity services at the Hobart Private due to staff recruitment issues and possibly other issues.

So, Leon spoke with AMA Tasmania President Doctor Michael Lumsden-Steel, and here’s a little bit of what he had to say about the dispute.

Really, the issue is coming down to how the health insurers are funding and paying for the services the hospitals are providing for maternity care. One of the big challenges that we’re facing, Look, it’s twofold. You’ve got insurance providers that are increasingly there for profit organisations, ie they are actually there to make money for their shareholders, and not necessarily just a return to members.

We have to ask the question to, how are insurers really supporting 50 per cent of our population which is an essential role for carrying and delivering our future generation?

The AMA’s Doctor Michael Lumsden-Steel says: the issue lies with how the health insurers are funding and paying for the services.

Doctor Rachel David is the CEO of Private Healthcare Australia and would like to respond to these claims. Doctor Rachel David, welcome to the Drive program.

Well look, the AMA is an organisation run by doctors for doctors so I kind of put the statements that were made in the, he would say that wouldn’t he, kind of basket. The reality is that the funds have been paying Healthscope more to run maternity services. In fact, Health Funds pay back $0.88 for every dollar they earn in premiums, which is the highest rate of any form of insurance. It’s very tightly regulated by the Prudential Regulator and the Department of Health. So, I think the issue of Health Funds paying more money is not what’s really at stake here. We have already given additional funds to Healthscope to run this service.

But it’s a bit more complicated than that. Money won’t actually solve this problem. The issue is that there are fewer births now because the economy is not as good as it was. There is a workforce shortage of skilled obstetricians, midwives and nurses, which is affecting that Healthscope Hospital, as well as hospitals all around the country. And furthermore, the cost of seeing an obstetrician in their rooms to manage the pregnancy and then, say, in the nine months leading up to the actual birth in hospital, is only allowed to be covered by Medicare, not by private health insurance.

And the out-of-pocket that are charged by obstetricians can be above 5,000- between $5000 and $10,000, and, in a cost of living crisis that just completely puts people off. So, there’s multiple factors that are playing into this and hospitals, private or public, have to be able to do a certain number of births every year to be considered a safe place to give birth.

So, what the Health Insurance Funds have done, we’ve heard from all sorts of people that there’s a potential for this service to close, so the Funds have tried to be proactive and have approached the Federal Government, as part of its review, its health check into private hospitals with some potential solutions. And, we hope that through negotiating with the Federal Government and private hospitals, we can get some movement on those.

But we have to prioritise affordability. Whether it’s affordability of premiums or affordability of seeing the doctor. Because without those things, people just won’t participate in the private market.

Well, look, we are in the position- well, what we’re doing at the moment is talking to the other hospital services, the Health Funds, and the Federal Government to see whether we can arrive at a solution here. And we will make sure that no one is disadvantaged if, in fact, Healthscope goes ahead and closes this service.

But it is a symptom of a broader problem that is affecting hospitals, private and public, all around the country. And much as we will be able to reach a short term solution for people that are already pregnant or considering having a baby in Hobart, there are some really difficult, longer term issues that we have to grapple with here. Including the fact that because people are concerned about cost of living, house prices and the economy, they’re not having as many children.

Well, look, I’ve had three children myself. I’ve had three babies in private hospitals and received excellent care. And it does give you a sense of control to know that you’ll have one person looking after you and know where you’ll be able to give birth.

So, usually in these situations – and I’d be astounded if this was different – anyone who’s already booked in to the hospital will be allowed to give birth there. In future, if Healthscope chooses to go ahead with closing the service, there is still Calvary in Hobart, and obviously the public hospital. But it’s we will have to work with them to ensure that they are properly equipped to be able to meet the demand. So, we’re not going to leave anybody out on a limb here.

Look, it’s really a historical issue. Healthscope- Calvary is part of a network that is not for profit, and it had a pretty- you know, all hospitals have been through tough times with the pandemic and inflation, but Calvary has a really established role in Hobart and has done, maybe, better than Healthscope has as a for profit private hospital.

Healthscope is a whole group. They’ve got about 38 hospitals around Australia is having some pretty significant problems. They were taken over by a global private equity firm in 2019. Some business decisions were made that did not go well. And since the pandemic they’ve really struggled to get back on their feet.

Well look, it’s got to be sustainable. So, there is a couple of things that- a couple of headwinds. And one is that the cost that people have to pay, firstly, to see an obstetrician. In the first place there are the premiums, its top hospital cover because of the high risk of something going wrong suddenly in a pregnancy. And then, you know, ultimately in the context of a cost of living crisis where young couples are really struggling, there are a lot of things that we need to fix here, including the broader economy.

And then I think that what we need to consider as well is just demand is dropping. Australia’s birth-rate has dropped significantly since the beginning of the pandemic. and our economic problems started. So, it might not be possible to sustain multiple maternity services in Tasmania, given there’s a minimum level of births that a hospital needs to do every year to be considered safe.

Well look, I think that we need to wait and see what’s actually going to happen. And, you know, in every situation that I’ve been involved in, where there’s been issues like this, people that are already booked in will be looked after. So, anybody who’s already made plans and has approached the hospital, and their obstetrician works there, they will be looked after.

In the long run, it is much safer and better to have a baby in a hospital which is meeting the minimum requirements for the number of births, and has the appropriate number of staff, whether they be obstetricians, midwives or nurses. Because if there is a workforce shortage and, or they’re, the hospital, is not able to meet that minimum number of births, then it’s probably not a good idea to keep it going for quality and safety reasons.