10 December 2009
Productivity Commission Proves Private Hospitals are More Efficient
Today’s release of the Productivity Commission into the performance of public and private hospital systems shows
that private hospital patient costs are lower, provide safer treatment and cost tax payers less money.
The report states: “On average, the private hospitals in this study reported lower risk adjusted mortality rates than
public and public contract hospitals”. According to the report, lower standardised mortality rates indicate higher
levels of quality. The results show that private hospitals have a Risk Adjusted Mortality Ratio of just 0.305 which is
half the rate of public hospitals at 0.632.¹
The Commission’s report shows that MRSA infection rates in public hospitals are more than double those in private
hospitals, at 16.70 compared to only 7.18 infections per 10,000 bed days.²
“The Commission’s report proves that private hospital costs are lower when adjusted for the different patient mix as
public hospitals,” said Michael Roff, CEO of the Australian Private Hospitals Association. “Private hospitals in
Australia perform 60% of all surgery, everything from cardiac surgery to hip and knee replacements and do it
cheaper and with lower infection rates.”
“The cost per casemix-adjusted separation in private hospitals was $4,172 and in public hospitals was $4,302. When
factors beyond private hospitals’ control are removed, such as medical and prostheses costs, the cost per casemix
adjusted separation in private hospitals was just $2,284 compared to $3,373 in public hospitals.”
-ENDS-
For more information or to interview Michael Roff contact: Lisa Ramshaw, APHA Public Affairs Manager on 0413
971 999
Notes to editors:
The productivity commission report shows that MRSA infection rates in public hospitals are more than
double those in private hospitals, at 16.70 compared to only 7.18 infections per 10,000 bed days.
Where private hospitals are responsible for costs they are always lower than public hospitals. On average for
the costs which private hospitals control they are 32% less than those in public hospitals. Private hospitals
have lower costs for general hospital ($599 lower), pharmacy ($119 lower), emergency ($174 lower), and
capital costs ($196 lower).
A recent AIHW report shows that on average public patients cost the tax payer $3,296 per episode, whereas
privately insured patients being treated in private hospitals cost the tax payer only $1,364 per episode. This
saves the tax payer $1,932 per episode.
1
Productivity Commission (2009) Public and Private Hospitals Final Report, page 365
2
Productivity Commission (2009) Public and Private Hospitals Final Report, page XLVIII and 135
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