Tens of thousands of people in New South Wales with private health insurance are facing shock bills after opting to use their insurance in public hospitals. Private Healthcare Australia (PHA) has revealed that many insured patients are being burdened with unexpected out-of-pocket costs, sometimes exceeding $10,000.
According to PHA’s analysis of hospital billing records for 2022-23, over a third of private patients treated in NSW public hospitals ended up with significant bills. Some of these exceeded $1,000, with a few going beyond $10,000. While the majority of charges were for medical services, there were even instances where patients were billed for diagnostic services by doctors they never met or chose.
Dr Rachel David, CEO of PHA, highlighted that these costs often arise because NSW public hospitals allow doctors to charge privately, even when patients receive the same treatment as they would without insurance. Many patients end up signing consent forms while severely unwell, casting doubt on whether they can fully grasp the financial implications.
“What’s particularly troubling is the lack of transparency around these charges. NSW Health’s informed consent process is flawed and can easily mislead patients into agreeing to costs they weren’t aware of,” Dr David said.
The situation is even more concerning when coupled with data from the Australian Institute of Health and Welfare. NSW is admitting more private patients into its public hospitals than any other state, despite having some of the longest waiting times for public patients seeking elective surgeries. Dr David noted that nearly 20% of public hospital beds are now filled by private patients, equating to almost 4,000 beds—equivalent to the combined capacity of some of the state’s largest hospitals.
This surge in private patients is closely tied to the NSW Government’s approach to billing private patients in public hospitals. The government’s plan to increase charges for private patients could drive the numbers even higher, a move Dr David views as a creeping privatisation of the public health system.
“Our public healthcare system is based on the principle of equal access for all, funded by our taxes. Yet, private patients are being charged for services that public patients receive for free. This creates an unfair two-tier system,” she added.
At a time when many Australians are grappling with cost-of-living pressures, the imposition of these bills feels particularly unjust. NSW Health is being urged to revise its admission information and consent process to ensure patients understand the financial implications of their decisions. Dr David suggests patients should be presented with three clear options: either no out-of-pocket costs, uncertain potential costs, or clear information about the total amount they may be charged.
Failure to provide this clarity could lead health funds to introduce their own, more straightforward rules about recognising private patient elections before rebates are issued.
Further adding to the financial burden is the NSW Government’s recent budget announcement, which outlines plans to raise $490 million through additional charges on health funds and privately insured individuals. This could lead to a weekly increase of $3 to $5 for insurance premiums or pressure health funds to pay double the Commonwealth rate for single rooms in public hospitals. This development has left many wondering why private patients are being targeted in this way, especially within a public system meant to provide universal healthcare.
The current situation in NSW is fuelling concerns about the integrity of the state’s public hospital system, and whether it is drifting away from its founding principle of free healthcare for all.
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