PRIVATE MEMBERS' BUSINESS

Mr WILKIE (Clark) (11:36): I move: That this House: (1) notes that: (a) private hospitals perform more than two-thirds of planned surgeries, and deliver essential healthcare across Australia, including in regional areas; (b) private healthcare exists to provide choice, not to compensate for a public system in logjam; (c) rising costs relative to revenue have driven hospital closures and sales, with obstetrics and mental health services under particular pressure; (d) hundreds of thousands of Australians are downgrading their private cover as its value erodes, a trend the Government's cut to the seniors' private health insurance rebate will accelerate, adding further pressure to the public system; (e) private health regulation was designed for an earlier era of high membership, not-for-profit insurers and larger hospital numbers, and now lacks flexibility to respond to demographic change, contract imbalances and economic shocks; (f) no dedicated, whole-of-system mechanism exists to balance the interests of patients, doctors, hospitals, insurers and device manufacturers; and (g) selective contracting and vertical integration increasingly threaten patient choice and the doctor-patient relationship; and (2) calls on the Government to establish an independent statutory Private Health System Authority within the Health portfolio to: (a) monitor and report on the sector's financial sustainability, from premiums and benefit payouts to regional hospital viability; (b) ensure fair insurer-hospital and insurer-practitioner contracting, including sustainable payment arrangements given bargaining power discrepancies; (c) safeguard against managed care by assessing arrangements on their actual effect, not stated intent, where they restrict patient choice, interfere with clinically appropriate care, or distort clinical decisions, including in emerging hospital-in-the-home care; (d) advise government on policy levers, including premiums, rebates, product tier design and risk equalisation, to lift coverage and reverse the drift to exclusionary products; and (e) oversee safe, clinically-led expansion of out-of-hospital care that is properly funded and benchmarked, without shifting cost or risk to patients and families.

Australia's health system is built on a partnership between a strong public system and a substantial private sector. These sectors are interconnected. When one comes under strain, the effects are felt across the entire healthcare system.

That's the reality which underpins this motion that I put before the House today. Private hospitals are not a peripheral part of healthcare delivery in Australia. As much as I would like a universal public healthcare system which is appropriately resourced and able to meet the needs of all Australians, the reality is that we currently need private health care.

Indeed, private hospitals account for more than 40 per cent of all hospital admissions and perform around 70 per cent of elective surgery nationally. Moreover, almost 13 million Australians hold private hospital cover. Take that capacity away, and the public system simply won't be able to absorb it.

Right now, the warning lights are flashing. The Department of Health, Disability and Ageing's own private hospital sector financial health check found that costs are growing faster than revenue in many parts of the sector. The Australian Private Hospitals Association reports that more than 20 hospitals have closed and more than 80 services have been withdrawn in recent years.

Meanwhile, private hospital profitability had hit a 15-year low, with ABS figures showing the sector's operating result went from a $36 million loss in 2023-24 to a $750 million loss in 2024-25. Capital expenditure fell from $782 million to $754 million while demand kept climbing. These figures show a sector in trouble, and the consequences extend well beyond individual businesses.

Make no mistake—when a private hospital shuts its doors or stops offering certain services, the patients don't vanish. They turn up at the public hospital down the road, which is already stretched to breaking point. A weakening private sector therefore becomes a public healthcare issue as well.

At the same time, there are consumer concerns about the affordability and value of private health insurance. As of June 2026, almost 46 per cent of Australians, almost 13 million people, held private hospital cover. But, with premiums continuing to rise and cost-of-living pressures continuing to bite, people are asking whether they're getting any value at all.

This will be exacerbated if the government gets its way in winding back the private health insurance rebate for over-65s. Plenty will downgrade. Some will walk away entirely.

Then the pressure lands on the public system again. So who's watching the whole picture? There's currently no independent body responsible for monitoring the private healthcare system as a whole.

Yes, we have regulators for parts of the system, but no independent body looks at how insurers, hospitals, practitioners, governments and patients actually interact. Nobody connects the dots and nobody is equipped to deal with a sector which, as all the indicators are showing, is plummeting. That's what this motion seeks to address.

It calls for the establishment of an independent statutory private health system authority. The authority would monitor and report on the sector's financial sustainability, including premiums, benefit payouts and the viability of regional hospitals. It would shine a light on contracts between insurers, hospitals and practitioners so that power imbalances don't quietly erode access to care.

Importantly, the authority would safeguard against the emergence of managed care arrangements that restrict patient choice, interfere with clinically appropriate care or distort clinical decision-making. Australians rightly expect healthcare decisions to be driven by clinical need, not by an insurer's balance sheet. The authority would also provide independent advice to government on important policy levers, including premium settings, rebates, product design and risk equalisation arrangements.

These policy settings influence both affordability and participation in private health insurance and therefore have implications for the sustainability of the broader healthcare system. Finally, as care moves towards hospital in the home and other out-of-hospital models, there's a need to ensure that innovation remains patient focused. Indeed, with more than 74 per cent of private hospital admissions already same-day episodes of care, emerging models must be clinically led, properly funded and rigorously evaluated.

Let me be clear. This isn't about favouring private over public. A strong public healthcare system must remain the cornerstone of Australia's health care.

But a sustainable private sector keeps waiting lists shorter and capacity available when Australians need it. An independent private health system authority gives us transparency, scrutiny and evidence based advice so we spot the risks before they become crises. It would help ensure that Australia's mixed healthcare system remains sustainable, equitable and focused on patient outcomes.

I commend the motion to the House.