Australia’s private hospital mental health system crisis ‘set to get worse’
Australia has lost hundreds of private mental health beds — and the crisis appears likely to get worse. SEE THE MAP
Hundreds of mental health beds have been lost across Australia due to a string of closures in the private psychiatric sector, amid warnings the crisis is likely to get even worse.
Six dedicated mental health hospitals have closed since mid-2023, and further beds have been lost through ward closures in that time.
Almost 300 private beds were lost, with the spate of closures blamed on various factors including financial woes, workforce problems and low occupancy.
But Private Healthcare Australia says since mid-2023 five private mental health facilities have opened across the country while others have undergone expansions, with the total beds gained outnumbering those that closed.
The Hobart Clinic 27-bed inpatient facility was also been slated to shut at the end of this week, but the Tasmanian government on Tuesday offered $2m to keep it operating for another six months.
The Australian Private Hospitals Association has warned eight more private hospitals — which were either dedicated to mental health or had units for these patients — faced the “very real prospect” of imminent closure.
Tony Read, 57, spent a month in The Hobart Clinic several years ago after experiencing suicidal thoughts.
He said his stay was transformative, and armed him with tools to help manage anxiety, depression and recovery from alcohol addiction.
Mr Read, who lives in northwest Tasmania, continued seeing his psychiatrist and psychologist from the clinic after he left too.
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Mr Read, who no longer has private health insurance due to the cost, said he was “gutted” when he heard The Hobart Clinic would close.
“My first thought went to, ‘Oh my goodness, the amount of people in the future that will not be able to access that service’,” he said.
He said the idea that the public system could absorb the increased demand was “laughable”.
Another former patient, a carer admitted for burnout, said she entered the facility as someone who couldn’t get out of bed, and left able to live a normal life.
The Hobart woman, who did not want to be named, has lived with anxiety and depression for many years.
She said the slated closure was “terrible” and she was concerned about the impact on the public system.
She said her stay was covered by insurance, apart from a $200 excess.
Royal Australian and New Zealand College of Psychiatrists president-elect Angelo Virgona said remuneration for the specialists in the private hospital sector had become increasingly problematic over the years.
They generally did not receive gap fees from patients and “paltry” payments from insurers had stagnated, he said.
“On an hourly basis I say that it is the worst remunerated role for psychiatrists in the country,” he said.
Dr Virgona said young psychiatrists were put off working in the private inpatient setting.
And with older psychiatrists retiring the workforce shortages would only get worse, he said.
“I think it’s inevitable that there’ll be further closures if the situation doesn’t change,” Dr Virgona said.
He said the college was “gravely concerned” about the state of private hospital psychiatry and mental health units in Australia.
He said the private sector serviced patients with severe disorders including treatment-resistant depression and eating disorders, and people suffering complex trauma.
If these patients were unable to access private admission, already overwhelmed public services would be “smashed” and people could be turned away with “dreadful consequences”, he warned.
Dr Virgona suggested increasing trainee positions in the private hospital inpatient space could help improve workforce shortages.
Australian Private Hospitals Association (APHA) chief executive Brett Heffernan said low reimbursement from insurers and rising out-of-pocket costs for patients were primary causes of The Hobart Clinic’s slated closure.
Mr Heffernan said the combination of inadequate funding from insurers, an explosion in health insurance restrictions and a lack of government interest in workforce solutions had created a situation where psychiatrists were deterred from working in private inpatient settings, further exacerbating an already dire mental health care crisis.
“With more private mental health hospitals and services to close, it’s hard to imagine, but this crisis is likely to get a lot worse,” he said.
“The APHA has called for urgent and decisive federal action to prevent further closures and stabilise the mental health sector.”
This included forcing insurers to meet “fair” funding obligations and addressing workforce shortages, he said.
“We have been urging the Federal Government to ease its moratorium that prevents internationally trained psychiatrists from working in private psychiatric inpatient facilities,” he said.
But Rachel David, the chief executive of insurers’ peak body Private Healthcare Australia, said there was “no evidence” the closure of private mental health beds or facilities has been caused by underfunding by health funds.
“Demand for private hospital care has been impacted by factors that are outside of health insurers’ control,” Dr David said.
“This includes medical workforce shortages, the high cost of seeing a medical specialist in the community, and a shift towards people receiving a lot more healthcare out of hospital.”
She said some stand-alone mental health hospitals had closed because there was insufficient demand to fill the number of beds available.
A federal health department spokesman said the private hospital sector was facing “systemic challenges”.
He said private hospital and insurer CEOs were pulled together by the government to develop options to support the sector’s sustainability.
“There are a range of ideas we want them to consider seriously, particularly to maternity services and mental health,” he said.
“Ultimately, the solutions lie with insurers and hospitals working together.
“It is incumbent on them to come together and find solutions.
“The Australian Government’s $1bn mental health commitment includes $90m over four years to grow the mental health workforce across psychiatry, psychology, and peer support.”
Mental Health Australia chief executive Carolyn Nikoloski said bed closures in the private sector would inevitably increase demand for already stretched public beds.
“These changes reduce choice for the community, with some people purposefully seeking out private health insurance to give increased options for care,” she said.
“It is a disappointing outcome in the context of increasing service demand across the board.
“The bed closures are happening within the context of increasing financial pressures on our mental health service system and broader mental health workforce challenges.
“Government must, in particular, urgently improve funding models and pursue workforce reforms to attract, retain and support the mental health workforce.”
She said greater investment was also needed in prevention and early intervention.
If you need help, you can contact Beyond Blue on 1300 22 4636 or Lifeline on 13 11 14
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Originally published as Australia’s private hospital mental health system crisis ‘set to get worse’
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