As the Treasurer’s Economic Forum draws near, Australia’s private hospital sector is calling on federal and state governments to better harness its capacity, without spending a cent.
The Australian Private Hospitals Association (APHA) says a more coordinated, long-term partnership with governments could ease pressure on the public system, lift productivity and improve patient outcomes. But despite three years of raising concerns with the Albanese Government, the sector says little has changed.
“We remain positive about the role of private hospitals in Australian healthcare delivery, but we need Federal and State Governments to come with us,” said APHA CEO Brett Heffernan. “And it doesn’t have to cost anything.”
Private hospitals receive no direct government funding, yet they deliver a large share of Australia’s planned care. According to APHA, just 633 private hospitals manage 70% of planned surgery, 81% of rehabilitation, 61% of acute mental health care, and over half of chemotherapy treatments. Last year, they admitted more than 5.14 million patients—up 3% on the previous year.
“Taxpayers get a massive return on zero investment in private hospitals,” said Heffernan, who added that private facilities offer high-quality, technologically advanced care but are hindered by bureaucratic restrictions and resistance from health insurers.
The contrast in funding is stark. While private hospitals receive no direct government money, private health insurers benefit from around $7 billion in taxpayer rebates annually. Meanwhile, the public sector is receiving roughly $400 billion over five years under the current federal-state health agreement, with that figure expected to rise in the next round of negotiations.
“There’s a disconnect in how we invest. A more collaborative partnership between private and public hospitals, making the most of private facilities, capabilities and spare beds, needs to be a priority,” Heffernan said.
He pointed out that during the pandemic, governments leaned heavily on private hospitals to maintain continuity of care. That collaboration, he says, has since been forgotten.
Last week’s Productivity Commission interim report, Delivering Quality Care More Efficiently, noted some of these concerns. But Heffernan says concrete commitments are needed if those observations are to have real impact.
He argues that private hospitals are not seeking taxpayer dollars, but rather structural changes that would allow them to function more effectively and compete fairly. “Ongoing neglect and a lack of strategic support threaten the sector’s viability at a time when Australia needs it most,” he said.
The sector contributes more than $24 billion annually to the economy and supports 155,000 direct jobs, with further employment generated across supply chains.
Innovation is also a key strength. From introducing the first da Vinci surgical robot to leading the uptake of AI-driven endoscopy systems, private hospitals have led major advances in care. “Innovation drives efficiencies, reduce costs and improves patient outcomes,” Heffernan said. “But governments must recognise private hospitals’ efforts or risk squandering those gains.”
The APHA has proposed several policy changes that it says would improve outcomes at no cost to taxpayers. These include scrapping the 10-year moratorium on overseas-trained doctors—particularly to address shortages in psychiatry—streamlining investment pathways, removing insurer barriers to hospital-in-the-home services, and setting minimum return ratios on insurance premiums to protect patients.
The group also wants private providers to be actively involved in national health policymaking, pointing to what it sees as a missed opportunity in how current systems are designed and funded.
“These cost taxpayers and patients nothing,” Heffernan said.
“A thriving private hospital sector is not just a healthcare priority, it is a cornerstone of Australia’s economic security and national self-sufficiency. As we look to the future, the viability and sustainability of private hospitals are integral to delivering a healthy, productive and competitive Australia.”
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