Australia’s peak body representing private hospitals has criticised the Federal Government’s private health sector consultation process, arguing that more than two years of discussions have failed to produce meaningful reforms for a sector facing financial pressure.
The Australian Private Hospitals Association (APHA) said the Government’s CEO Forum, established to examine the sustainability and affordability of the private healthcare system, has completed its current term without delivering concrete outcomes.
APHA Chief Executive Brett Heffernan said concerns raised when the forum was established in late 2024 had been borne out by events.
“We said the government’s CEO Forum was a dud and set up to fail when it was formed in December 2024. Unfortunately, that view has been vindicated,” he said.
According to APHA, the forum followed an earlier CEO Roundtable launched 25 months ago to identify short and longer-term options for supporting the private healthcare sector. The association argues that despite ongoing discussions, no policy measures have emerged to address pressures facing private hospitals, particularly in mental health, maternity and regional services.
Mr Heffernan said participants had contributed in good faith but claimed the process lacked decision-making authority and had become an exercise in consultation rather than action.
The criticism comes amid a broader debate over the relationship between private hospitals and health insurers. Private hospital operators have repeatedly argued that insurer payments have not kept pace with rising operating costs, placing pressure on service delivery and threatening the viability of some facilities.
The Federal Government has previously acknowledged concerns about the financial health of parts of the private hospital sector. In its 2024 Private Hospital Viability Health Check, it identified challenges affecting a range of providers and called for closer attention to industry sustainability.
APHA is now urging the Government to introduce a legislated minimum payout ratio requiring health insurers to return 90 per cent of premium revenue to patient benefits and hospital services. The association argues this would restore payout levels seen before the COVID-19 pandemic and provide greater certainty for hospitals.
The group is also calling for a mandatory code of conduct governing negotiations between insurers and hospitals, alongside an independent arbitration process overseen by the Australian Competition and Consumer Commission.
Health insurers have previously maintained that premium increases, claims costs and affordability pressures must all be considered when assessing benefit payments and industry performance.
The future of the CEO Forum remains unclear, although APHA claims discussions are underway to extend the process for another year. Whether that leads to policy changes may become a key test of the Government’s response to ongoing concerns within the private healthcare sector.
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