Hospital care—public or private, the Australian government contribution is the same

Whether you are a public patient in a public hospital or a patient using private insurance in a private hospital, the Australian Government ends up contributing around the same amount of funding, according to a report released today by the Australian Institute of Health and Welfare (AIHW).

The report, Funding sources for admitted patients in Australian hospitals, 2005-06, was originally commissioned by the National Health and Hospitals Reform Commission and shows who pays for the care provided to patients in Australian hospitals.

In particular, it compares the Australian Government's funding for public patients and privately insured patients, using the latest and best quality data available at that time.

'In 2005-06, the Australian Government's average contribution for public patients per episode of care was $1,367', said John Goss, Principal Economist at the AIHW.

'For patients using their private insurance in private hospitals the Australian government's average contribution was $1,364. For privately insured patients overall, whether treated in a private hospital or in a public hospital as a private patient, the average contribution by the Australian Government was $1,427 per episode of care.'

'For all privately insured patients in Australia the average cost per episode of care was about $3,477, of which 67% was for hospital charges and 32% for medical charges' Mr Goss said.

'The funding for these charges came from private health insurance benefits of $2,646, Medical Benefits Schedule rebates of $512 and out-of-pocket patient spending of $274.'

The Australian Government pays the Medical Benefits Schedule rebate, and subsidises private health insurance benefits by between 30% and 40% depending on the age of the health insurance fund member.

The Australian Government bore a greater proportion of the costs of privately insured patients over the age of 65, than for those aged under 65 mostly because it pays a higher private health insurance rebate for older Australians.

The report also shows that within the same diagnosis related group, public hospitals tend to handle a greater proportion of the more complex cases. There is also evidence that private hospitals provide a mix of complementary and competing services to those provided in public hospitals.

Tuesday 1 December 2009

Further information: Mr John Goss, AIHW, tel. 02 6244 1151 mob. 0402 346 379

For media copies of the report: Publications Officer, AIHW, tel. (02) 6244 1032.