Doctors Call For Moratorium On Hospital Collocation

Doctors Call For Moratorium On Hospital Collocation – 19 February 1998

The rush to build back to back public/private hospitals (collocation) could end up in a legal minefield with patients being the losers. The 5,000 member strong doctors’ health policy group, the Australian Doctors’ Fund has called on Federal and State Governments to use their planning powers to place a moratorium on private and public hospital collocations following recent adverse reports.

Executive Director of the Australian Doctors’ Fund, Mr Stephen Milgate said recent statements published in Health Administrator by Michael Gorton (who heads the health section of Melbourne-based law firm Russell Kennedy Solicitors) need to be taken very seriously. Mr Gorton has warned that lengthy and costly disputes could develop unless contracts on sharing of services (between public and private collocated hospitals) include provisions establishing circumstances in which either hospital can be held responsible for patient injury. – Health Administrator Ph: 02 9977 7500 (independent weekly news on the business of health care) Release date 25 November 1997, modified 30 January 1998.

Mr Milgate said that Michael Gorton had joined an avalanche of critics into the collocation/privatisation process. “The chorus is becoming a crescendo” Mr Milgate said. These criticisms included:

“What is certain is that if we have wholesale collocation, we will get a substantial increase in private bed capacity at a rate which is more than likely to exceed the capacity of the health insurance funds to fund it. And it will drive away investment from the private hospital system because of the financial difficulties of existing private hospitals”– Dr Mark Bryce President of Australian Private Hospitals Association, Healthcover magazine, Volume 8, Feb-March 1998.

“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.” “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.” – West Australian Auditor General, D D R Pearson, in his report into the Joondalup hospital project (a privatised public/private hospital campus (built and managed by a private operator) entitled ‘Private Care for Public Patients’.

“the push to privatise public hospitals and other public sector health services has not been underpinned by any specific studies of costs and efficiencies undertaken by the Department of Treasury and Finance”– Victorian Auditor General, into the new Latrobe Regional Hospital (a private sector awarded project), Healthcover magazine, Volume 8, Feb-March 1998.

“There is more than sufficient evidence for a States moratorium and a wider inquiry into the whole collocation process. Who benefits? Who wins? Who pays? What we are seeing is the start of one unholy mess with patients the losers”, Mr Milgate said.

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