Healthcare costs will keep rising, says private hospital boss Robert Cooke

Healthcare costs are lifting well above inflation, says Healthscope’s Robert Cooke.

Mr Cooke said there were inefficiencies in the system that needed to be addressed. Picture:Ian Currie.

Private hospital boss Robert Cooke has warned that Australia’s healthcare costs will continue to rise as demand for services in an ageing population increases.

The chief executive of Healthscope said today he has “bad news” for Australia: “health care is going up well above inflation”. He added that was the case in most countries across the globe.

“Given the ageing population, the technology, the demand for services, we will be paying more as a country. It is a question of who is paying,” he said.

Mr Cooke said there were inefficiencies in the system that needed to be addressed but he said the private healthcare system was the solution, not the problem.

The cost of healthcare in Australia has been in focus as recent reports highlight the high cost of some procedures in Australia compared to other countries. There has also been concern raised about the cost of some medical devices, not only compared to other countries but also between Australia’s public and private system.

A surgical variance report on orthopedic procedures, released last week by Medibank and the Royal Australasian College of Surgeons, also showed a wide range in prosthetics prices in Australia’s ­private hospitals. It showed the average cost of prostheses surgeons used for hip replacements ranged ­between $4908 and $16,178, and for knee replacements between $5388 and $12,464.

Private health insurers are pushing for reform of the Prostheses List — which the government uses to regulate how much health funds pay for prosthetics, human tissues and device implants — to address affordability issues. The industry has promised health fund members their premiums will be lower next year if the government reforms the list by November.

“The problem at the moment is a lot of industry participants are taking one line, prostheses ... probably as a country we are over paying but there is a lot of cross subsidisation across the system and a lot of inefficiencies,” Mr Cooke said.

“The government’s private health insurance review needs to look at a whole range of issues, which go to efficiency and affordability of private health.”

Mr Cooke, who delivered a 18.9 per cent jump in annual profit to $182.8 million today, outlined that nurses pay added to the higher costs.

“Everyone skips over that state governments, who are probably still paying catch up on previously underpaying nurses, are paying nurses way above CPI,” he said.

“We match that (in the private system), so that goes through to the (cost of a) health insurance premium.”