THANK you for providing an opinion on the following urgent issues confronting our surgical patients.

As surgeons and their hospitals are busy tackling the backlog of elective procedures after the coronavirus disease 2019 (COVID-19) pandemic, they may not yet be fully aware of the significant access blocks for our patients at the point of GP referral.

A perfect storm is currently brewing as many of our patients, who have deferred seeking health care for non-COVID-19 conditions during the pandemic, are receiving late diagnoses of cancer and other diseases (here and here). Compounding this, the blowout in public hospital surgical waiting lists, which of course varies in different geographic areas, is partly hidden by the scarcity of outpatient appointments (here and here).

Our privately insured patients are also experiencing significant access blocks to surgical theatres due to financial hardship. As many patients have recently dropped or downgraded their insurance premiums during the pandemic (here and here), not surprisingly, they are questioning whether they can afford surgical, anaesthetic and radiology gap fees at the time of GP referral.

There are many reasons why this situation is about to get worse.

Before the pandemic, there were many calls for urgent reform of our unsustainable health system (here and here). Back in February 2020, a member of the Australian Prudential Regulation Authority (APRA) called for private health insurer mergers because of concerns about their future viability related to the growing exodus of younger healthier members. At the end of December 2020, private health insurance membership fell further to 43.9% of the Australian population, mainly due to the lack of affordability of premiums. Every patient who drops their private health insurance joins the long queue for a public hospital bed.

The high cost of private health insurance premiums is influenced by many factors. One factor that requires intervention is the widespread strategy of public hospitals to encourage inpatients to claim their private health insurance “to help their local hospital”. Of course, privately insured patients have the right to use the public system, but most are unaware that the short-sighted strategy of “double dipping” by public hospitals to prop up deficiencies in state funding directly contributes to the negative spiral of higher premiums, and in turn, lower private health insurance membership. In addition, every private surgical patient admitted to a public hospital rather than a private hospital, potentially restricts the access of a public patient to a surgical theatre.

In response to political and community concerns about the lack of affordability of premiums, private health insurers have restricted the average rate rise to only 2.74 % in April 2021. For many years, health funds have been pressuring private hospitals to accept lower and lower indexation well below rate rises in contract negotiations, as well as highlighting areas where cost savings may be made, including reducing inpatient stays, inpatient rehabilitation, alleged overservicing, and low value surgical care (here, here, here, here and here). As Australian health care costs are increasing by about 4% per annum, private hospitals are arguing they have limited capacity to create new efficiencies to address funding shortfalls without impacting on the quality of their care or restricting their range of much needed high cost surgical subspecialities. Unfortunately, this impasse is resulting in a hostile relationship between private insurers and private hospitals, and impeding constructive collaboration within the private health sector.

If health care costs continue to escalate and younger, healthier members continue to drop their private cover as is likely after the withdrawal of JobKeeper payments (currently subsidising about 1.5 million jobs and 500 000 business), premiums will rise significantly, and the death spiral of private health care may be closer than we think.

Given the ongoing urgent need for health reform exacerbated by the pandemic, why is there a lack of debate on this topic?

Health funders (governments and private health insurers), associations, hospitals and clinicians seem to be pursuing different priorities in the lead up to the May 2021 federal budget.

The federal government is understandably focused on managing its unprecedented budget deficit and debt, as well as funding the effective rollout of the COVID-19 vaccine, the continuation of telehealth and the recommendations of the Royal Commission into Aged Care Quality and Safety. Universal health care and preventive health care are also high on our government’s list of priorities along with the increasing demand for advances in new health technologies and high cost drugs by our rapidly ageing population and the epidemic of chronic disease including mental illness.

Following a series of government regulatory changes to private health insurance at the end of 2020, the peak association of health funds, Private Health Care Australia, is currently advocating to government for the reinstatement of the 30% private health insurance rebate. It is also applying political and industry pressure to reform prostheses funding (predicted savings up to $500 million per annum) and second tier default benefits (savings up to $200 million per annum), remove unwarranted and outdated regulation (savings up to $445 million), and increase Medicare Levy Surcharge (an additional $164 million).

Doctors’ associations are quick to protest against government, health fund or hospital attempts to influence cost or mode of delivery of health care on the grounds of fears about managed care. Clearly, US style managed care would have negative consequences in Australia and should be resisted. However, defending the unsustainable status quo stands in the way of constructive discussions about positive innovations which also protect the choices of patients and their doctors.

As we emerge from the pandemic, GPs and surgeons share much in common. We are grappling with many health system challenges on a daily basis: the disruption of referral pathways partly due to the pandemic’s impact on the rise of telehealth and corporatisation, the need for doctors to protect clinical autonomy while following complex clinical guidelines, the frustrated desire to embrace advances in care in a cost-constrained environment, and the chronic frustrations associated with red tape and health bureaucracy.

While we still have some influence over the future sustainability of our public and private health systems, it would be a positive step forward if we could engage in a constructive debate about improving patient access to surgical care – together.

Clinical Professor Leanne Rowe AM is a GP who has a deep understanding of the private and public health systems through serving on the boards of hospitals, private insurers and the Royal Australian College of General Practitioners. She is currently Chairman of Nexus Hospitals, a network of short stay hospitals, and a non-executive director of Doctor Care Anywhere, a GP telehealth service.




The statements or opinions expressed in this article reflect the views of the authors and do not represent the official policy of the AMA, the MJA or InSight+ unless so stated.


The Federal Government's initial response to the Aged Care Royal Commission final report does not go far enough
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2 thoughts on “Open referral letter to surgeons: intervention required

  1. Oliver Frank says:

    Well said.

    The private health insurance tax rebate has been the worst health-related policy in the last thirty years. It has manifestly failed to achieve its objective of reducing demand on public hospitals. As you point out, many patients with private insurance continue to choose to be admitted to public hospitals. In addition, the private health insurance tax rebate is not equitable, because the rich derive more benefit from it than the poor.

    Private health care that is funded partly by taxes that the government is forgoing cannot be said to be truly privately funded.

  2. Anonymous says:

    What’s best practice around the world? The Commonwealth Fund research shows that the UK NHS has substandard outcomes so should not be emulated. The Dutch and Singaporeans have done comprehensive research, and completely rebuilt their systems. What has been their experience subsequently? The level of debate in Australia seems pretty superficial.

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