The funding of private hospitals in Australia

Abstract

Private hospitals are an essential component of Australia's complex mix of public and private health funding and provision. Private hospitals account for 34.3 per cent of all hospital separations, and over half (56.2%) of all same-day separations. The revenue (funding) of the sector approached $4 billion by 1998/99, and as a result of its recent rapid growth capital expenditure in the sector was nearly $550 million in the same year. Private casemix of private hospitals is distinctive, and characterised by a high proportion of surgical procedures in general (48.1 per cent), and more than a majority of all services in such areas as rehabilitation, orthopaedics (shoulder, knee, spinal fusion, and hand surgery), alcohol disorders, same day colonoscopy and sleep disorders. This chapter synthesizes data from a multitude of sources to produce a comprehensive picture of Australia's private hospital sector and its funding. It examines the funding (revenue) sources of private hospitals, and considers how and why private hospitals approach the issue of funding from a different perspective than their public sector colleagues. To illustrate how Australian private hospitals approach revenue (funding) strategically, a series of indicative types of hospitals is explored.