Private Healthcare Australia calls for maternity service funding reform after Hobart ward loss

Just days after the closure of the maternity ward at the Hobart Private Hospital was announced, a peak national healthcare body has publicly called for a new funding model for maternity services.

Healthscope has announced that the maternity ward at the Hobart Private Hospital will close.

The peak body for the Australian private health insurance industry has called for a sweeping overhaul of the way maternity services are funded across the country as concerns mount over the closure of a crucial ward in Hobart.

North American-owned healthcare company Healthscope announced last Thursday that it would be shutting the maternity ward at Hobart Private Hospital, where 600 babies are delivered every year.

These births will now need to be absorbed by Calvary Hospital and the public system.

CEO of Private Healthcare Australia, Dr Rachel David. Picture: Supplied

The decision has prompted community outcry, with Premier Jeremy Rockliff, Health Minister Jacquie Petrusma and her federal counterpart Mark Butler all scrambling to find solutions to the problem.

Mr Butler said he and Ms Petrusma had a “productive” discussion on Friday and that he understood there were ongoing conversations between private health insurers and the state government.

Just days after Healthscope’s announcement, Private Healthcare Australia (PHA) has issued a call for a new funding model to be applied to private maternity services across the nation.

In a budget submission to the federal government, the peak body for private health insurers said midwives and GPs should be able to manage pregnancies and births in the private hospital system, with health insurers stepping up to fund more options for families.

It comes as many Australians are turning their backs on maternity services in the private system due to factors such as high out-of-pocket fees that can be greater than $6500 in some cities.

PHA CEO, Dr Rachel David, said midwives, GPs, and obstetricians should be allowed to “offer a total package of private maternity services”, including pregnancy care in the lead-up to birth, with fixed out-of-pocket costs to give families certainty.

Hobart Private Hospital, pictured next to the Royal Hobart Hospital.

Currently, women are required to pay a private obstetrician directly to manage their pregnancy and deliver their baby in a private hospital. However, according to the PHA, this often includes uncertain and exorbitant out-of-pocket costs for consultations, scans, and pathology services.

“Many women are attracted to the benefits of a private hospital birth, which offers the choice of your own doctor, continuity of care, and your own room, but the costs are rapidly becoming prohibitive,” Dr David said.

“We want to create more affordable options that health insurers are prepared to help fund. We know many women would like to engage their own midwife or GP with obstetrics experience to care for them in the private system, particularly if they have a low-risk pregnancy. But there’s no funding model set up for this.

“If the federal government backs this proposal, Tasmania will be able to attract a greater range of health professionals to care for pregnant women during their pregnancy, particularly midwives who want to work in more advanced roles.”

Under the current model, health funds can only legally pay for in-hospital care and not the management of a pregnancy.

The PHA says its reform proposal would remove drip pricing and ensure expecting families were aware of total out-of-pocket expenses before beginning the private maternity care experience.

Health funds and the Australian government would each provide a minimum of $3000 to lead practitioners undertaking the care co-ordination role, with a single bill provided to the patient. PHA says this would cost the Commonwealth about $246m over four years but would ultimately create savings by lowering demand for services in the public hospital system.

“We can’t keep doing things the way we have for decades if we want to keep private models of care available in Tasmania,” Dr David said.