The Australian Private Hospitals Association has issued what it describes as 'Mythbusters' in response to the latest Grattan Institute Report.
One of the key myths it identifies is the report's claim that the major driver for increases in private health insurance benefit outlays is increases in hospital payments – accounting for almost two-thirds of the increase.
According to the association, "Private hospital payments account for almost two-thirds of total benefit outlays from hospital insurance, so they would be expected to account for two-thirds of the increase.
It also challenges the suggestion rising costs are driving higher benefit outlays. "In the year ending Monday 30 September 2019, private health insurance benefits paid to private hospitals increased four percent but this was entirely due to increased utilisation," it said, adding that the benefit paid per separation actually decreased in real terms.
The association continued, "Expenditure growth in the public hospital system was 4.2 percent in real terms over 2014-15 to 2017-18. In the private hospital system it was only 2.6 percent. Costs have increased but so have health outcomes for patients and cost increases would have been much worse if hospitals were not already driving efficiencies year on year."
It also challenges the Grattan Institute's assertion there are no incentives for private hospitals to improve efficiency or quality.
It says, "The report ignores the fact that vast majority of private hospitals contract with health insurers to provide services on a ‘case payment’ basis. This means that for a set benefit paid by the insurer, the hospital must provide for all of the patient’s care even if the patient needs to stay in hospital for longer than planned."