Radio National Counterpoint Interview with Dr Rachel David on private patients in public hospitals and ‘cost-shifting’

Station: Radio National
Program: Counterpoint
Date: 15/05/2017
Time: 4:26 PM
Compere: Amanda Vanstone
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia

AMANDA VANSTONE: Joining me now to discuss just that is Rachel David, she’s the CEO of Private Healthcare Australia. Rachel, welcome to Counterpoint.
RACHEL DAVID: Thanks Amanda.
AMANDA VANSTONE: Now, you don’t mind – that is the private health insurers – do you, when someone is in a public hospital because they’ve got some sort of chronic condition, a very serious condition and the specialists with whom they’re dealing likes to work in the public hospital sector because of all the research students, et cetera, that might be with them and it just suits that doctor so you go into the public hospital. You don’t have a problem with that, do you?
RACHEL DAVID: No, there’s always been a small number of people who’ve been in that category for many years. They have a relationship with a particular specialist doctor because they have a difficult condition. That doctor only works in a public hospital and so that’s where they get treated and that’s particularly true for our members who live in rural and regional Australia. They have the doctor of their choice but they do get treated in a public hospital. What we’re talking about here, though, is something quite different.
RACHEL DAVID: We’ve seen over the last few years – last two to five years – very rapid growth in the number of private patients in public hospitals. Because increasingly state governments are encouraging hospitals to chase down patients who’d presented to a public hospital emergency department because they feel sick and they’re encouraging them, sometimes very strongly, to use their private health insurance rather than the Medicare system.
AMANDA VANSTONE: Now that shifts – that means that people like me that have private health insurance end up paying for something because obviously if the private health insurer pays they need to get their money back from their clients. So those of us with private health insurance end up paying for medical care provided in a public hospital that really should be paid for by the public hospital.
RACHEL DAVID: Well look, that’s exactly right and what that’s done effectively, over the last few years, is add about $1 billion to the cost of premiums but it’s also growing at about 12 – an average of 12 per cent per annum. As state governments have increasingly encouraged this by basically reducing the funding that they actually put directly into the public hospitals and asking that they find what they call non-source revenue, or extra money from other sources like people with private health insurance, veterans, or people that might have compensation claims. So that in itself it seems innocuous but what that does is that it drives up the cost of premiums and sometimes it puts a lot of pressure on the consumer when they present to the hospital, often in distress, when this conversation is had with them to make a decision quickly that might not be in their best interests.
AMANDA VANSTONE: Right because if they shift to private health insurance, they might have some out of pocket expenses that they wouldn’t have. Is this the point? That if they stay as a public patient.
RACHEL DAVID: That’s right. The moment you declare that you’re a public patient in that setting – sorry the moment that you declare that you’re a private patient in that setting, that potentially triggers a whole lot of other issues, like extra bills you could get. That’s – you could get billed for the treating specialist and you could get billed for any tests that you had in that care setting. Particularly if you’re actually discharged. So I think it’s very important that consumers are aware that if they’re asked that question – do you want to use your private health insurance – that this could happen. They could get actual bills many weeks after they’ve been seen in a public hospital setting and they need to get full financial consent at that point.
AMANDA VANSTONE: Because if you go to a private hospital, of course, you will be billed for various tests et cetera but that doesn’t normally happen in a public hospital and that’s the risk you run if you agree to go in as a private patient.
RACHEL DAVID: That’s right and in a private hospital and in a private care setting, often those doctors and hospital staff have been very well educated to provide informed financial consent at the point of service. Which is really – and it’s usually in the context of a planned admission to hospital where a lot – people have known for some weeks what treatment they’re going to get. If you are short of breath, if you have chest pain or some other frightening condition has happened and you present rightly to an emergency department or you’re taken there in an ambulance and the conversation is held at that point – do you have private health insurance – number one you are not in a real – really in a state to be able to make an informed choice. And number two often the staff at that point are not well prepared to give you informed financial consent. And that can mean we’ve had a number of members come to us that have had out of pockets north of $1000 that they didn’t expect because they’ve made that decision. So what we’re suggesting is that consumers and patients need to be really aware that’s the case. If they’re an Australian permanent resident, and they’re eligible for Medicare, there is no compulsion to use their private health in that care setting.
AMANDA VANSTONE: I’m talking with Rachel David, CEO of Private Healthcare Australia, about people in public hospitals being encouraged to use their private healthcare. Now new hospitals being built – I mean there’s a big issue about the hospital in Adelaide but – relating to the cost of it – but as I understand it the new Fiona Stanley Hospital in West Australia and our new hospital in Adelaide have a lot more single occupancy rooms. Is that because – do you suspect that’s because both of those governments have a plan of saying to people, look would you like to go private, you’ve got a better chance of getting a private room?
RACHEL DAVID: Look I think that is part of it, you know, certainly there is a big – new hospitals are very popular with the electorate but they’re also the most expensive setting of care and they have to be paid for. So the incentive is if – is really these days for public hospitals to compete with private hospitals for the patient because the patient becomes very valuable in that setting to raise more money. So that’s not really a dynamic we’ve seen in Australia before but it’s really gathered momentum in the last few years. And it’s not just putting upward pressure on health fund premiums. It’s putting a lot of upward pressure on Medicare as well. So we’re seeing 10 per cent year on year growth in Medicare costs, health fund premiums are going up at about four and a half.

And this is – it’s driven by an ageing population that’s using the system more, but it’s also being driven by all of this additional infrastructure that’s being added. And really, when public hospitals are competing with private hospitals for patients, what we need in the system is a lot more transparency about where the expenditure is going, what’s happening with the patients that are admitted, and what sort of outcomes are they getting. So that even if you do decide to be a private patient in a public hospital and you get a single room and you get a very high standard of care, we need the data on your admission to be shared so that we can give you the right bills, we can give you the right expectations, and also ensure that the quality of treatment that you’ve received is acceptable.
AMANDA VANSTONE: Well, transparency is actually a solution to most problems I think, certainly in the financing area, whether it’s health or education or whatever. Transparency show us where the money went, show us what it costs you to pay for this and costs you to pay for that. It is an ideal way to clear up any problems, but there isn’t a very high degree of transparency in this area of the private patient in a public hospital, is there?
RACHEL DAVID: No, there really isn’t. This has all been happening under the radar from the bottom up in the health system, so that when Federal Government politicians talk about things like Medicare you think what they’re talking about is public hospitals where you can present and have emergency treatment free of charge, but increasingly that’s not actually happening. So what we think of as Medicare is actually being undermined from below by this kind of behaviour, and what we need to be….
AMANDA VANSTONE: [Interrupts] Can I just say, it’s an odd kind of thing, because we had the Medi-scare campaign at the last federal election run by federal Labor, but we’ve got not only Labor state governments – but we have got Labor state governments – encouraging people to go in and use up the public hospitals.
RACHEL DAVID: Well, that’s right. A lot of encouragement and a lot of pressure is being put on people to actually use their private sources of funding when they’re presenting in a setting which traditionally has been the Medicare setting, a public hospital. It’s not just Liberal or Labor state governments, this occurs in New South Wales extensively, which is Liberal; it occurs extensively in Queensland, in particular, which is a Labor state government. But really, if you’re defending something called Medicare, and the premise is that people can get care free at the point of service in an emergency, we need to be clear that in many cases that isn’t happening. And what we really need is a mature discussion at the state and federal government level about who is funding the treatment, what is the most appropriate setting of care, and how we keep it affordable in the future. And what I’m really looking for is, in those Commonwealth state agreements that determines how hospitals get funded, is that there’s some recognition that these multiple sources of funding are being used, and some caveats put around how they’ve been used so that consumers and patients are protected.
AMANDA VANSTONE: Let me just ask, when you go to a private hospital you come out and you get a bill. It’s not just the total, it’ll have- sometimes you won’t understand all the- you know, like tests for this and tests for that, and if you’re not medically trained you think, okay, I had a test for this and that, and a friend who’s a doctor might tell you what it all was, but at least it’s itemised. But what happens when you go into a public hospital, you, under pressure or otherwise, elect to be a private patient? Do they give you the same itemisation or just sort of get a bill?
RACHEL DAVID: Well, it’s extremely variable, and this is one of the issues that we want to put on the table, that often we don’t get enough data back really to have any idea what bills the patients have received. Sometimes we just get a claim for an admission and that’s all the information that we get, so we have no way of helping that patient manage their bills or understand what they’re going to get back from the health fund. So one thing that we are looking for is not just some kind of code of conduct about how patients are treated in emergency departments, but also …
AMANDA VANSTONE: [Interrupts] [indistinct].
RACHEL DAVID: For entry. But also data- when they are in hospital and they have made a decision to pay for it using their health insurance, that there is transparency of data about what has happened, what they’ve been admitted for, and what they’re going to get billed for, which I think is the least people should expect.
AMANDA VANSTONE: Rachel, if you wanted to put the nub of it, of what the issue is, what would you say?
RACHEL DAVID: Well look, I think as the health sector becomes more complex, sophisticated, but also more expensive, that our state and federal political leaders really need to look at this rationally without getting caught up in ideology and the branding of things like Medicare and private health. There’s no point in defending something from an ideological perspective if it’s not what’s actually happening on the ground. So we need to look at this. We need to look at what’s really happening, who’s paying for what, and make sure at the end of the day that the consumer is not disadvantaged by cost-shifting that’s going on and people are turning a blind eye.
AMANDA VANSTONE: That was Rachel David, CEO of Private Healthcare Australia, talking about people in public hospitals being encouraged, even pressured, to use their private health insurance.
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