Health Privatisation Juggernaut Trips Over Auditor General’s Report

Health Privatisation Juggernaut Trips Over Auditor General’s Report – 6 January 1998

The plans by State Health Ministers to privatise public hospitals and their services has received a body blow from the Western Australian Auditor General’s report entitled “Private Care for Public Patients” the Australian Doctors’ Fund claimed today.

In his recent evaluation of the Joondalup Health Campus Project in Western Australia the Auditor General, D D R Pearson, raised serious concerns on the proposal for a private operator to build and manage the Joondalup Health Campus (335 bed hospital over the next 20 years) in which private and public patients are collocated in the same building.

In his report the WA Auditor General questions the benefit to the State of the Joondalup Project:

“There is not, however, reliable information that the contract provides net tangible benefits to the State relative to the public sector alternative from either services or facilities.” p 5.

The WA Auditor General also raises questions about cost savings from the privatisation scheme claimed by WA Department of Health bureaucrats. “…there is no reliable estimate of the extent of any savings.” p 33.

Executive Director of the Australian Doctors’ Fund, Mr Stephen Milgate, said “The most concerning of all revelations by the Auditor General was the potential negative impact on patient care under the new arrangements.”

“The Operator has a financial incentive to influence admission, treatment and discharge patterns in order to increase the proportion of more profitable treatments, and to: – structure patient treatment to optimise the number and nature of episodes of care; – code information from medical records to attract the highest possible prices; and – discharge and transfer patients in a way that optimises profitability.” p 42.

“It is possible therefore for the Operator to seek to limit the quantity of services provided where , for example, the Operator considers it not to be in its commercial interests.” p 43.

“Clinically inappropriate practices are therefore particular risks associated with the contract, which the Department needs to manage.” p 44.

Mr Milgate said “The WA Auditor General has embarrassed a lot of people in high places who think that privatisation and collocation of public and private hospitals will somehow solve the problems of an overburdened public hospital system and an under utilised private system.”

“The Australian Doctors’ Fund believes that both private and public hospitals should be separate and difference institutions which act as check and balance on each other. The public hospital system must be retained as a public institution whose prime functions include caring for those who are unable to afford public health care and training young doctors.” Mr Milgate said.

Chairman of the Australian Doctors’ Fund, Dr Bruce Shepherd, said that “Attempts to disguise the reality of what is an inevitable growth in health costs are doomed to failure.”

“The facts are that people are living longer and demanding a better lifestyle particularly in relation to their health care. People in general want to be active in their retirement. They are not prepared to tolerate the aches and pains that their parents and grandparents had to put with and who can blame them when alternatives are available.”

“We must stop kidding ourselves that such schemes masquerading as privatisation can somehow magically lower the costs of health care”, Dr Shepherd said.

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