Maintaining the viability of private psychiatric hospitals: The role of independently determined health insurance payments

Private psychiatric hospitals provide access to care for the approximately 46% of Australians who pay for private health insurance with hospital coverage. However, although private health insurance coverage has gradually increased, activity in private psychiatric hospitals has stagnated, particularly when measured by separations and Medicare-funded inpatient services. The funding and cost structure of private hospitals may be significant factors in this discrepancy because insurers are making record profits while private hospitals maintain that their costs are not covered. The burden falls on patients who are unable to access private hospital care. An independently determined, cost-based benchmark for private hospitals is recommended. Such independent costing of psychiatric care is already in routine use.