GRAEME HOUGHTON. Role of the private hospital sector in the Covid-19 pandemic

The Commonwealth has announced that it is partnering with the private hospital sector to provide additional resources for dealing with the Covid-19 pandemic.

It will make $1.3 billion available (or more if required) to meet half the cost of treating Covid-19 cases and uninfected, high priority surgical cases. ‘Partnership agreements’ are to be negotiated by each of the states and territories so that the resources of 675 private hospitals are available.

We are told that, given reasonable assumptions, “Our health system will probably cope” with the pandemic but the news that the resources of the private sector will be available is welcome.

The pandemic demonstrates again that Australia does not have a health care ‘system’. There are eight states and territories running hospitals; primary medical care is overwhelmingly provided by GPs working in small businesses; and we have a public hospital system and a private hospital system which are connected only in a very tenuous way by the specialist doctors who work in both sectors. Patient care information (medical records) is not linked across these diverse sectors in a way which effectively supports continuity of care.

Medical scientists have been warning for years of the inevitability of an influenza pandemic akin to the ‘Spanish flu’ which took tens of millions of lives in the years following World War I. We have learned in the space of three months that our health services are not well prepared to deal with pandemic infectious disease.

The Australian Private Hospitals Association has described the ‘partnership’ measures as “guaranteeing the viability of Australia’s private hospitals…”, so is their “viability” an end in itself or a temporary means for dealing with the pandemic? It is to be hoped that this “once-in-a-century redesign” is entirely driven by the needs of the community rather than the perceived need to financially support private hospitals.

There are already very large government subsidies for the private sector and whether this amounts to good policy is hotly debated. The public purse supports private health insurance to a controversial extent and the workforce is overwhelmingly trained in the public sector at public expense.

While some public hospitals have almost certainly been technically insolvent in recent decades, they have been considered far too important for government to allow them to fail. Is government now extending the same certainty to the private hospital sector? Perhaps, in the current crisis, the argument for nationalising the private hospital sector is stronger than the argument for sustaining it with more subsidies.

The media release of the Commonwealth Minister, the Australian Deputy Chief Medical Officer and the Australian Chief Nursing and Midwifery Officer on 31st March gives us some of the objectives, principles, purposes and priorities but very little explanation of how this “redesign” will work.

As for the details to be worked through in partnership agreements:

  • The media release says that private staff and facilities will be available “alongside the public hospital sector” and, elsewhere, they “will integrate with state and territory health systems”. What do these different terms mean?
  • The facilities of the private sector will be “fully available to” state and territory hospital sectors and the Australian Government. What does this mean? Will the public sector be able to commandeer resources from the private sector?
  • If $1.3 billion is half the cost of this project, where will the other half come from?
  • Who will decide which patients will go where? Presumably, patients being funded from our $1.3 billion (let’s call them ‘overflow’ patients) will be referred from the public sector.
  • An important question is whether overflow patients admitted to private hospitals will be classified as private and billed by the hospital and their doctors. In the public sector, patients have a choice of being treated publicly or privately. Will this apply to all patients in private hospital?
  • Who will staff the beds and will they be remunerated, in particular, the doctors?
  • How will priority for access for all patients to all resources be decided, but especially those in private hospitals, among non-infectious emergency cases, intensive care cases, urgent elective cases, cases requiring isolation because of infection or compromised immunity, public and private patients?
  • How will we know when the Partnership Agreements have served their purpose and can be terminated?

In summary:

  • Notwithstanding the repeated warnings of infectious diseases physicians and epidemiologists, Australia has not developed a plan for mobilising its health services to deal with pandemics.
  • Our health services have evolved in a largely unplanned way and they are not organised to deal with a pandemic of infectious disease.
  • We need to mobilise all our resources in this crisis but how will we know that the services purchased with $1.3 billion are needed and that the community is getting a good deal?
  • Considerable skill and good will is required make the diverse providers of health services function more like a system that provides high quality care, that is care which is equitable, safe, timely, effective, efficient and acceptable to patients.
  • There will be more pandemics and we should not regard the partnership agreements with the private sector as temporary, with no implications for the future.
  • Before the pandemic and this plan for responding to it, the financial viability of private hospitals and private health insurance were increasingly in doubt. There must be a discussion about their role in our community and evidence-based discussion about the extent to which financial support for them from government is justified.

Graeme Houghton, BSc MHA, served as CEO of teaching hospitals in Melbourne and Adelaide for over 25 years. He worked in the for-profit private hospital sector for two years and following his retirement he has worked as an adviser to the National Department of Health in PNG and “common Chair” of the three former Tasmanian Health Organisations.

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