Another misleading story about hospital costs

The head of Ramsey Health told us in the AFR today that the “Productivity Commission report on public and private hospital systems found that the private sector was 30% more efficient”  It did not.

Last year the CEO of the Private Hospitals Association said that private hospital costs are 32% lower than public hospitals. The same old hoary untruths keeps being repeated.
The Productivity Commission concedes (p83) that it is hard to compare the costs of the two systems. However it went on to say that at a national level public and private hospitals had broadly similar cost per case mix adjusted separation in 2007/08. (Sorry for the jargon but it means comparing like with like).It added that significant differences were found in the composition of costs.
Private hospitals often choose to point out that in certain areas they are cheaper. That is true for about 60% of surgery. Private hospitals are specialised in certain areas, particularly minor surgery. We have always known that the harder and more expensive work is left to public hospitals.
The ultimate test of whether private hospitals are more efficient is whether they jump to treat public patients in private hospitals  on a casemix basis. The fact is they don’t. Years ago Jeff Kennett made an offer to private hospitals to treat public patients in private hospitals. They declined and despite their bravado today about being more efficient, they will still not put their misleading propaganda to the test.
 The CEO of Ramsay Health received a salary package of $ 31 m in 2014. That would partly explain why the costs of his company are so high.!
I wonder if there are any scalpel sharp health correspondents who will examine the spin put out by Ramsey Healthcare?
John Menadue


Share and Enjoy !

Please keep your comments short and sharp and avoid entering links. For questions regarding our comment system please click here.
(Please note that we are unable to post comments on your behalf.)

Contributions to Pearls and Irritations

Your contribution will fund quality independent comment and analysis in Pearls and Irritations


Subscribe to John Menadue’s Newsletter

Top 5 most read


Receive articles straight to your Inbox

How often?

Thank you for subscribing!