Private hospitals in Australia are on the verge of collapse as closures begin

Tens of thousands of public patients are waiting more than a year for surgery as the overstretched hospital system is flooded with private patients. See which hospitals are affected and have shut.

Tens of thousands of public patients are waiting more than a year for surgery – the longest time in two decades – as the already-overstretched hospital system is flooded with private patients.

Close to 80 private hospitals have shut in the last five years and a further 12 private hospitals have closed their maternity or mental health services as the system teeters on the verge of collapse.

The situation is so dire, doctors predict there will be no private maternity services within five years.

The closures mean private patients are being forced into the already overstretched public system where one in 10 — or 82,000 — people are now waiting more than a year for surgery.

The closures of private hospitals mean patients are being forced into the already overstretched public system. Picture: iStock

And private mental health services have become “ghost wards” with no patients because of a shortage of psychiatrists and their decision not to work with highly complex patients in hospitals.

They can earn more doing ADHD assessments for $1000 per appointment in their private practice.

See the list of hospital closures below:

Health Minister Mark Butler has asked his department to do a financial check on the viability private hospital sector after it collectively lost $611 million last financial year.

“Reports about the sustainability of some private hospitals are concerning, particularly those in regional areas and where they play an important role in the local community,” he said.

Meanwhile people are paying soaring health fund premiums and getting nothing in return as services disappear.

“Every single projection before the end of 2030 says there won’t be enough private births to keep the hospitals open. So our prediction is that there won’t be any private maternity in the country by 2030,” obstetrician and Australian Medical Association (AMA) president Professor Steve Robson said.

Health Minister Mark Butler. Picture: NewsWire/Martin Ollman

AMA president Professor Steve Robson.

The chief executive of the largest not-for-profit provider in the country St Vincent’s Hospitals Chris Blake said it was worse than that.

“Just the simple maths of people living with chronic disease for longer, when you combine that with demographics, the system (public and private) is unfundable within five years,” Mr Blake said.

The private sector carries out two thirds of the nation’s elective surgery and if it goes under, public hospitals which already have soaring wait times could not cope.

Private hospitals claim health funds which last year doubled their profit to $2 billion are underfunding them.

“Health insurance companies have the capacity to pay for the true cost of hospital care without the need to further increase premiums,” Australian Private Hospitals Association president Christine Gee said.

Private hospitals are also struggling to attract the staff they need to run operating theatres after experienced nurses quit during Covid.

St Vincent’s Hospitals chief executive Chris Blake. Picture: St Vincent's Health Australia

Australian Private Hospitals Association president Christine Gee. Picture: LinkedIn

And, as a result, only profitable services are being offered to patients.

“Maxillofacial surgery, one of the other things that a lot of people take out private health insurance for – removing a child’s wisdom teeth – tonsillectomies, that surgery is actually not profitable and hospitals are losing money so they’re saying look, we can’t do it. We just want to do orthopaedic surgery,” Prof Robson said.

It comes as insiders claim private health funds are trying to deliberately price Gold cover out of the market as the price soars above $10,000 per family per year.

Private Healthcare Australia chief executive Dr Rachel David said health fund payouts for hospital treatment had risen 9.7 per cent in the year to March and “there is no evidence that Australians with health insurance are getting less for their membership or facing barriers to private health services right now”.

If private hospitals want health funds to pay them more “they are really asking consumers to pay them more via their health insurance policies,” she said.

There had been a clear trend towards specialist doctors charging steeper out of pocket “gap” fees for common surgical procedures, she said.

“We’re hearing more stories of people receiving shocking unexpected bills from their doctors when they’re at their most vulnerable. Some of these bills are exceeding $10,000,” she said.

“These out-of-pocket fees are becoming a major barrier for people with private health insurance to access private hospital services and they are undermining the value of health insurance.”

Meanwhile, the Boston Consulting Group found some patients were simply not being diagnosed because of a shrinking number of GP consultations.

“GP consultations are now nine per cent lower than they would have been had the pre-Covid growth trajectory been maintained,” the consulting group’s health industry report said.

Medicare-funded specialist consultations have declined even more significantly.

Specialists in obstetrics, surgery, and ophthalmology have all reduced their average hours in private hospitals since the pandemic and GPs are increasingly opting for part-time roles.

From 2018 to 2023 total private admissions have grown at a compound rate of less than 1 per cent, the report found.

Mr Blake said another reason hospitals were struggling was that patients were putting off surgery because they can’t afford out of pocket costs.

Originally published as Private hospitals in Australia are on the verge of collapse as closures begin