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Private hospitals in Australia

Commission research paper

This paper was released on was released on 7 December 1999. The report examines the structure and performance of Australia's private hospital industry. Its objectives are to provide a comprehensive overview of the private hospital system and to detail the key factors affecting its performance. While it draws attention to a number of policy related issues worthy of examination, it does not contain any detailed policy analysis or recommendations.

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The Productivity Commission today released a research report which examines the structure and performance of Australia's private hospital industry.

Private hospitals are an important part of Australia's health care system. They provide 30 per cent of acute care hospital beds and treat 45 per cent of all surgical patients. Moreover, the private hospital industry has been undergoing some significant structural changes.

Amongst other things, this report:

  • provides a statistical overview of the structure of the industry and the activities of the 500 acute care, psychiatric and day hospitals that operate within it;
  • looks at some indicators of the industry's financial performance, efficiency and quality of service (though it does not attempt to benchmark private hospitals against the public hospital system);
  • discusses some of the key factors affecting performance, including the relationships between private hospitals, doctors and the health insurance funds; and
  • draws attention to a number of policy issues germane to the industry's future performance, including licensing arrangements for private hospitals and competitive neutrality, both within the industry and between private and public hospitals.

The report does not, however, include detailed policy analysis or contain policy recommendations.

Cover, Copyright, Foreword, Contents, Glossary, Summary

1 Scope of the paper
1.1 Scope of the report
1.2 Information sources
1.3 Report outline

2 The private hospital industry
2.1 The private sector's role in the delivery of hospital services
2.2 Defining the private hospital industry for this study
2.3 Industry structure and activity
2.4 Mergers and hospital diversification

3 The market for private hospital services
3.1 Market definition
3.2 Market participants

4 Financial performance
4.1 Private hospital revenues
4.2 Private hospital costs
4.3 Profitability

5 Broader performance indicators
5.1 Hospital efficiency
5.2 Quality of care
5.3 Appropriateness of care

6 The regulatory and legislative environment
6.1 State and Territory regulation
6.2 Commonwealth regulation of the private hospital industry

7 Competition in the private hospital market
7.1 The relationship between private hospitals and doctors
7.2 The relationship between private hospitals and health funds
7.3 The relationship between health funds and doctors
7.4 The Trade Practices Act and the ACCC
7.5 Other competitive aspects of the private hospital market

8 Broad drivers of demand for private hospital services
8.1 Income growth and distribution
8.2 Population growth and ageing
8.3 Technological developments
8.4 Community attitudes to health care

9 Some future policy issues
9.1 Industry-specific issues
9.2 Some broader health policy issues

A Private hospital revenues, charges and costs

B Additional hospital performance and State-based structural data


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