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Private contracts paper over public hospital dysfunction


The State Government’s move to outsource some elective surgery borders on a stunt to divert attention from ongoing problems in the public hospital system, writes Warren Jones.

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The previous State Government’s Transforming Health agenda almost crippled the hospital system, resulted in upwards of $1 billion in profligate expenditure and left a legacy of unnecessary new builds, closed and downgraded hospitals and critical bed shortages.

This resulted in a public hospital system with overloaded Emergency Departments and inadequate in-patient facilities, particularly for mental health patients and those on ever-lengthening waiting lists for elective surgery.

The problem with mental health services is almost insoluble, but it is linked to the overall deficiency in public hospital accommodation and support facilities. With elective surgery, the  Government is dragging the chain in restoring these services to Modbury and Noarlunga Hospitals, and in re-introducing surgery to the Repat.

The practice of outsourcing patients from the burgeoning public elective surgery waiting lists to private hospitals for treatment has been in place for many years. Mostly it has been a series of ad-hoc arrangements, often rushed, and at the end of each financial year, to meet budgetary and prescribed workload requirements.

In the face of ever-lengthening waiting lists, the worst in the country, the State Government has announced a formalised program of outsourced surgical treatment in 13 private hospitals over four years. By any definition, this is privatised health care and is an indictment of this new Government’s ability to repair the hospital system and provide adequate surgical beds and facilities in the public sector.

There is no doubt that, in the short term, this plan will benefit patients languishing on surgery waiting lists. However, it is a band-aid measure and unsustainable as a substitute for efficient and timely treatment in public hospitals. Unless public hospital capacity is increased, when this privatisation scheme ends, surgery waiting lists will again blow out to unacceptable levels.

There are other important issues in promoting this artificial interface between the public and private hospital sectors. There is a lack of transparency in the financial arrangements entered into by SA Health which cannot be excused or sustained by “commercial in confidence” claims. Public-private partnerships in health tend to financially disadvantage the public sector.  A recent case in point is the contract struck by SA Health with Calvary Wakefield Street Hospital to perform elective surgery on 200 public patients from the RAH. SA Health agreed to pay Calvary a per-patient package cost for the surgery and hospital facilities of 140 per cent of the private insurance rate. This was not a good deal.

The overall impact of the Government’s privatisation plans will be to inhibit or delay the restoration and expansion of surgical and other in-patient facilities and services in our struggling public hospital system.

By formalising agreed four-year contracts with a cross-section of private hospitals the Government hopes to contain costs, but, as yet, we have no information on the cost basis nor the total budget. However it is unlikely that private operators will offer discounted services, and private medical specialists certainly won’t. So the only way this privatisation can compete financially with public hospital surgery is if the surgeons and anaesthetists agree to a fee-for-service arrangement which cost shifts their component to the Commonwealth. Even so, this is still an impost on the public purse and taxpayers’ pockets.

Leaving aside the financial aspects, there are very real concerns about the logistics and safety of the proposed arrangements.  The selection and placement of patients is an administrative process with inadequate input from clinicians. SA Health admits it has no control over the “processes” involved in the private care of these patients, nor over nursing and medical staffing and standards.

Post-operative care and the management of longer-term surgical complications will be fragmented and confusing for patients and their doctors. In the past, there have been occasions when public hospital specialists and GPs have been unaware their patients have had private surgery until they have had occasion to see them subsequently.

Quite apart from the advantages of continuity of care in a public hospital with which patients are familiar and where their, often extensive, medical records are located, there can be considerable disruption for patients and relatives when their designated private hospital is determined by bed availability rather than geographic convenience.

Another issue which has been downplayed but cannot be ignored is the difficulty which may be experienced by privately insured patients in gaining access to treatment in private hospitals. The logistics of combining public and private in-patient services in a private hospital are problematic. This was evident recently in Flinders Private Hospital when there was a bed shortage for private patients, while beds designated for overflow public patients from Flinders Medical Centre remained unutilised.

The overall impact of the Government’s privatisation plans will be to inhibit or delay the restoration and expansion of surgical and other in-patient facilities and services in our struggling public hospital system. It will erode the essential cohesiveness of complementary clinical services in the public system and, most importantly, it will reduce the opportunities for teaching and training of medical and nursing students and of junior doctors and specialist medical trainees.

This unfortunate policy borders on a political stunt to divert attention and criticism away from the underlying shortcomings in our public hospital system.

These are the issues that must be addressed directly, rather than wasting time, money and human resources on stop-gap measures that will contribute nothing to long-term solutions, and may detract from their implementation.

Warren Jones AO is an Emeritus Professor at Flinders University and a former head of obstetrics at the Flinders Medical Centre.

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