A new report from The Grattan Institute, an Australian public policy think tank, suggests private health insurance premiums could be cut by up to 10 per cent if private hospitals were made more efficient and stopped over-servicing. The report states that private health insurers should pay less to private hospitals, reasoning that private hospitals are not more efficient than public hospitals. In fact, patients stay 9 per cent longer in private hospitals than public hospital patients with similar conditions. Paying private hospitals for treating a patient, rather than for keeping the patient longer, doing more tests, or ordering more drugs, could reduce costs by more than $1 billion a year. Private hospitals also provide more care than public hospitals that is of little or no value to the patient. Private health insurers could save about $1 billion a year if they no longer had to play for low-value or no-value care.
- Saving private health 1: reining in hospital costs and specialist bills. The Grattan Institute.
- Download report (PDF)