The Federal Health Minister, Nicola Roxon, says she’s agnostic and it doesn’t matter whether hospital services are provided by the public or private sectors. The Minister has also floated the idea of using hospital vouchers to give public patients a choice of providers.
This might be pre-COAG argy bargy designed to frighten recalcitrant States like NSW into line. But perhaps the next Australian Health Care Agreement will do more than plough billions more dollars into the public hospital sector which has had a 64% boost in real funding over the last decade.
To its credit, the Rudd Government is determined to introduce a rigorous national hospital performance reporting regime and wants funding increases tied to performance targets. The Minister has also offered to include private hospitals in the performance measuring system to help the private sector improve efficiency. Yet back in the real world, any private hospital operator who needed a government stats agency to tell them what’s going on in their business would have already gone broke.
The Minister’s wary attitude to private hospitals has even led her to suggest that “public hospitals are better and much more efficient in a range of areas”. That private hospitals must be less efficient because they are driven by the profit motive is a popular idea in the public sector. This is strange idea for a health minister to endorse and yet still support contracting out public care to private providers.
You can’t be agnostic when the whole point of contracting out public services is to gain the cost and productivity benefits of the more efficient private sector. Governments which doubt private contracts will deliver a better return to taxpayers may well have a self-fulfilling prophecy on their hands.
This week the South Australian government announced an agreement with a private medical company to fly-in surgical teams to perform 210 operations over the next four months at Queen Elizabeth public hospital. This will be funded using the money the Federal Government has provided to the States to blitz elective waiting lists. According to the story in The Australian, this will cost about $1 million, which is more than the public sector average.
Other State Governments appear to have used the money to buy care in private hospitals. The hospital cost weight data published by the Australian Institute of Health and Welfare is consistently and considerably higher for public than for private hospitals. An illuminating and therefore little referred to evidence-base demonstrates exactly why governments should have faith in the private sector and abandon the ideological prejudice that ‘public is best’.
The Department of Veterans Affairs purchases hospital services for the veterans community from both public and private hospitals by contract and tender. While the private sector is paid at close to market rates, the public sector is renumerated on a cost-recovery basis.
An analysis performed by the DVA comparing the cost differential for equivalent services and treatment was referred to during evidence before the House of Representatives Committee of Inquiry into Health Funding in 2006. It showed that the DVA paid “significantly lower prices in the private sector than in the public sector.” Given all this evidence, it is hard to remain a private health care agnostic.
Having worked as a registered nurse in public and private hospitals, I prefer the public sector. My work in the private sector was as an agency nurse but I think that gives you a unique perspective. Private hospitals do work that is going to generate profit for the hospital. If anything goes wrong, they move the patient out to the public sector (take note those collecting statistics). While there may be full medical and nursing teams during “working hours” 7am to 6pm, after hours, wards and intensive care units can be staffed by GP Locums in private hospitals. Just as well the nursing staff were experienced! But, a few years ago, private hospitals changed their skill mix, so that many of them now have minimal numbers of registered nurses supervising a team of Endorsed Enrolled Nurses and Assistants in Nursing. This was to achieve cost modelling targets, not improve the quality of care. I am disappointed to hear Nicola Roxon say that the huge fortune that is being given to private hospital and private funds will remain as is, while the public sector that does all the work that the private sector won’t touch, faces a huge funding problem. If people choose the private sector they and their fund should pay for it. Mind you from my observation, if you want quality and safety or you need a complicated procedure done or you have a chronic illness, choose the public sector.
A brief and hurried response to the input from Jenny Haines who certainly offers good insight into the divide between public and private aged care. Between them they still fail to meet the demands of average ageing Australians. Our elderly and age-affected remain desperately in need of medical, allied health, welfare and advocacy services not yet available in a co-ordinated package. As do our children, ageing Australians have specific needs tied into their living environments. As a nation we’re failing critical human needs at a time when family, network and government support is least accessible . Why we assume older people need or deserve less care than those who follow in their footsteps I’ve no idea. No one human life is more important than another as our medical fraternity will tell you.
It depends on how you define “best”. If you regard the primary role of a hospital to provide elective surgery, then certainly they do this more efficiently. This is for a wide variety of reasons, almost all of which relate to a lower demand when compared to the public sector, as well as increased financial incentives in the private sector. However, “best” in health care doesn’t mean “fastest”. Nor can it or should it be measured in terms of elective surgery waiting lists, but in overall service provision. Private hospitals take a much lower burden of seriously ill patients and in my experience prioritise surgical cases over medical cases. This of course influences how “efficient” they are.
Also, bear in mind the fact that a major cause for waiting list blow outs is the cancellation of elective procedures due to lack of bed space. If this situation was reversed the medical staff who currently sit around doing very little due to lack of surgical patients would be more productively employed, rather than the ridiculous but common scenario of having surgeons with no operating time in one public hospital, while the (public) patient is being operated on under a fee for service arrangement in a private hospital, thanks to the “waiting list blitz”. Surely the system becomes more efficient if we restore capacity, rather than just shifting to the private sector.
Finally, there is a factor that is often forgotten in the equation which is the training role of public hospitals. If we look at hosptials purely in terms of service provision we will rapidly lose all capacity due to a skill shortage worse than the one we already experience. Although the share of undergraduate and postgraduate training that occurs in the private sector is increasing, this is one of the essential roles of the public sector and increases it’s “inefficiency” from a cost point of view, but results in better care in the long term (and arguably the short term).