Media release

Millions of dollars to be saved with reform to delivery of out-of-hospital care

Millions of dollars can be saved, and tens of thousands of hospital beds freed up, if more out-of-hospital care is delivered in Australia’s private health system.


A report released today by the Australian Medical Association says Australia’s private health system is behind other countries in delivering out-of-hospital care, and a new national approach is needed to drive an efficient, less fragmented system that delivers benefits to patients.

AMA President Professor Steve Robson said there are many procedures where clinically suitable patients should be  able to access out-of-hospital care, such as rehabilitation following hip and knee replacements — some of the most common procedures performed, and a significant cost to the healthcare system.

The AMA’s report: Out-of-hospital care models in the private system found there has been a 174 per cent increase in knee and hip procedures in the private system since 2003.

“The cost difference between rehabilitation at home and hospital per patient is around $6,200. Looking at knee replacements alone, our report found expanding access to out-of-hospital rehabilitation to patients who would prefer this and were assessed as clinically appropriate by their surgeon, could save up to $62.7 million and free up to 94,000 beds per annum,” Professor Robson said.

“That’s a lot of extra beds for a health system in crisis — a system that’s struggling with ballooning elective planned surgery waiting lists.”

“These are conservative estimates of potential savings, as research shows that out-of-hospital care can also be beneficial for patients recovering from other surgeries, strokes, or even patients who require mental health treatment or palliative care.

“For some patients, out-of-hospital care can deliver the same outcomes as in-hospital care, while also providing patients with other benefits such as the ability to recover in the comfort of home.

The AMA is calling for the sector to design models of out-of-hospital care that are patient-centred and clinician-led.

“At the moment, many out-of-hospital care models in the private system are insurer-led and delivered — often referred to as vertical control. This is an equity issue for patients, as not all insurers fund or provide these models of care and there are no safeguards in place to protect patients,” Professor Robson said.

“This current insurer-led approach has also created a situation that puts patient choice and clinical autonomy at risk, with some insurers only providing out-of-hospital care with select providers and not necessarily involving the patient’s doctor.

“This situation can, in part, be attributed to a lack of independent oversight and coordinated reform across the private health sector. We need nationally consistent guidelines for out-of-hospital programs to ensure private health policies remain easily comparable.

“This is why we are calling for a Private Health System Authority to lead reform, including the development of these guidelines.”

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