Catholic Health Australia has joined the Australian Private Hospitals Association in calling on the Albanese Government to “guarantee and legislate” a minimum private health insurer benefit-payout ratio of 90 per cent.
In a joint position statement released yesterday, the hospital peak bodies set out a critical opportunity for coordinated Commonwealth leadership to stabilise Australia’s integrated public–private hospital system.
The hospital system is under increasing financial strain, with $3.4 billion stripped from the sector over the past three years (since the COVID-19 pandemic).
In the fiscal year (FY) 2023, the benefit-payout ratio dropped to 83 per cent and has stagnated at 85 per cent in FY24 and FY25.
Over this period, the health insurers reaped record multi-billion-dollar profits, and their management fees have soared, while the private hospital sector reported a $34 million operating loss in FY24.
Requiring a return to the pre-COVID ratio of 90 per cent would increase payments to hospitals by 5 per cent, injecting $1.2 billion per year into hospitals and health services, improving sustainability and workforce retention.
APHA and CHA are calling for a Mandatory Code of Conduct for insurer-hospital contracting, overseen by the Australian Competition and Consumer Commission, in tandem with a legislated 90 per cent benefit-payout ratio, to ensure transparency, consistency and fair terms across the sector.
To alleviate the burden on the already financially challenged sector, APHA and CHA are also seeking 50-50 co-funding from the Government to provide targeted support for the looming nurse wage increases, which will take effect from 1 July 2026.
This co-funding of nurse wage increases ($445 million over four years) will support hospital viability, moderate premium pressures, and maintain national hospital capacity.
Katharine Bassett, Catholic Health Australia’s director of health policy, said hospital sustainability is “not a private sector issue, but rather a national health system issue”.
“If private hospitals weaken, public hospitals feel it immediately. Waiting lists grow, access tightens, and communities lose services,” Dr Bassett said.
“At the centre of this debate are patients. These reforms are about ensuring Australians can access timely surgery and quality care, regardless of whether they enter the system through a public or private hospital.”
FULL STORY
Hospital peak bodies unite on joint position to address private hospital viability (CHA)
