“If I can be treated in a public hospital, why would I need private health insurance?”
It’s a good question.
Our public hospitals are among the best in the world. They’re where all surgeons train and they’re where most of our emergency departments are located.
But our public hospitals face huge demand for their services – and they always have. Back in 1953 demand for health care was already starting to outstrip supply. The National Health Act was passed that year which allowed private health insurers (and private hospitals) to enter the health sector and help relieve the pressure.
Public and private health care
Today, the Australian health system operates with a combination of public and private service providers, with almost half the population holding private hospital insurance.
If you’re treated in a public hospital, Medicare covers 100% of the charges for accommodation, meals, medical and nursing care, theatre and other fees related to your treatment. All the services provided by Medicare and the public health system treatment are funded by the Medicare Levy which is collected through our taxes.
But while Medicare and public hospitals do a great job, you can wait quite a while for treatment because of the high demand and the elective surgery waiting list.
Elective surgery, as opposed to emergency surgery, is treatment that can be ‘delayed for at least 24 hours’.
Doctors rank the urgency of your need for elective treatment into categories.
- Category 1: means you really should be treated within 30 days or your condition could become an emergency.
- Category 2: desirable for you to be treated within 90 days.
- Category 3: your condition really should be treated within 365 days.
You might be interested to know the majority of public hospital knee and hip replacements are in Categories 2 and 3. In the June quarter 2015, Victorian patients in Category 2 waited, on average, 123 days beyond the ‘desirable’ 90 days (that is a total of 7 months). In the same reporting period, patients in Category 3 had an average wait for their surgery of 575 days – or 19 months!
And just getting to see a specialist in the public system can take ages. The Age newspaper reported in February 2016 that some Victorians are waiting more than four-and-a-half years to see a specialist doctor in a public hospital. That’s before they can even be considered for further treatment or surgery.
If you are in pain, or can’t get around because of a bung knee, wouldn’t you want to be treated quickly?
Why you’re better off with private health insurance
Private health insurance gives you a level of control that the public system can’t.
Private hospital insurance allows you to:
- skip the queues and get the treatment you need sooner
- receive treatment in a private hospital of your choice
- choose your doctor or specialist.
Private hospital treatment is funded through a combination of Medicare and your private insurer.
If you need hospital treatment, you’ll receive it almost immediately if you have private hospital insurance. Insurers have contracts with private hospitals which ensure the quality of your care and their ability to cover 100% of your hospital costs.
And if your doctor uses your insurer’s direct billing arrangement (such as Defence Health’s Access Gap) you’ll have no-gap or a known-gap on your in-patient medical treatment. This is a valuable feature that caps the cost of private specialist care.
Private patients treated in public hospitals
Even with private health insurance you can still be admitted to a public hospital. If you’re involved in an accident or emergency, the ambulance will take you to the nearest public hospital.
In a public hospital, you’re entitled to the same Medicare-funded treatment everyone else receives. And if it’s an emergency, you’ll receive that treatment immediately. Medicare will cover 100% of the charges for your treatment in a public hospital.
Public hospital budgets are stretched. In fact, the Australian Medical Association warns of a looming ‘perfect storm’ in our public hospitals due to rising costs and declining funding. Because of this, many public hospitals now ask patients to use their private hospital insurance for their admission.
The treatment of private patients in public hospitals has increased by 110% in the eight years to June 2013. But as a private patient in a public hospital, you will not have control over when or who treats you, or the comfort that your private hospital cover provides.
Should you use your private health insurance in a public hospital? Perhaps consider these questions first.
- Can I choose my own doctor?
- Can I have a private room?
- Will all my costs be covered?
If the answer is ‘no’ to any one of them, your private health insurer will be paying for treatment that would otherwise be totally covered by Medicare. That contributes to the pressure on the premiums you pay.
A matter of choice
It’s your choice – you can use your private health insurance in a public hospital if you wish. But you should not feel pressured or obliged. You won’t be treated any faster in a public hospital if you use your private health insurance. And you could end up with out-of-pocket expenses while the person next to you has nothing to pay.
Public hospitals must treat you as a free public patient if that’s what you want – regardless of your insurance status.