Both governments and private insurers are struggling with hospital accountability

Governments across the Western world are struggling with the health care troika. Skyrocketing costs, an ageing population and an unproductive, secretive and very powerful industry. So far, no country has succeeded in cracking this puzzle. Many countries including Australia, have turned to privatisation claiming naively that ‘the market will fix everything’. Politicians seem to forget that business models don’t always equate with effectiveness.

The private USA model of healthcare costs double the European public model. USA citizens see a doctor less often, have higher infant mortality rates and lower life expectancy rates. Costs for many USA tests and treatments are double their European and British counterparts. So what are the real issues and how can they be resolved?

The mainstream media loves to publish dramatic stories showing the symptoms of the problem but rarely points to the cause. Several recent stories are a good example. The Victorian Government announced this week that it will expect all public hospitals to accept ambulance patients, even at excessively busy times. The current option of ‘going on bypass’ or refusing to accept Ambulances may be no longer available. This represents a bandaid solution to a growing problem of overcrowded Emergency Departments.

Dr Allan Whitehead, President of the Victorian Emergency Physicians Association, pointed out that the number of people coming to hospitals had been growing by about 7-10 percent every year. But has anyone tried to find out who these people are, and why they are flooding into hospitals?

It has been estimated that 40% of people in Emergency Departments are in the last year of their life. Many are elderly, frail people who lack adequate coordinated end of life care. Getting a medical assessment in a nursing home is nearly impossible. The majority of General Medical Practices close after five pm and at weekends. And despite over a billion dollars being spent on the PCEHR, Australia still has no functioning national medical records system.

Instead of raising these issues the focus was on ‘save our hospital’ language and political


Across the corridors in Australia’s private hospitals, the blame game continues. One of Australia’s major health insurers has recently announced that they will no long pay for avoidable errors. These include falls in hospital, picking up a hospital-acquired infection or requiring readmission within 28 days of a procedure. Attempts to contain the soaring cost of medical care were given as a reason, with private insurers saying that their payouts to private hospitals had doubled over the last decade, for 1.5 billion to 2.9 billion. Insurance premiums have also been rising at twice the rate of inflation.

However, private hospital networks claimed that the conditions being imposed on them were unfair. This time the ‘save our dying patients’ language was used. How is it that being asked to reduce errors in return for production costs doubling every ten years, is being seen as a sign of abusing sick people? Private hospitals have plenty of room for reform.

Medical reform groups say that some private medical specialists are being paid four to six times their public fee, with no obligation being imposed to make them to improve their work performance.

A recent 4 Corners program revealing that a neurosurgeon had been allowed to continued operating despite being such a severe Cocaine addict, that he killed not one, but two prostitutes on drug binges. Several years ago a drug-addict anaesthetist was charged with stealing patients opioids and at the same time, infecting some of them with hepatitis. Two nurses were arrested a few years and charged with killing some patients by overdosing them with insulin. In all cases the hospitals and clinics had known about the situation for years, and simply covered it up.

Hospital errors are conservatively estimated to kill and main 9 times more people than the national road toll every year. No hospital or clinic should receive payments when patients suffer an avoidable error. But they have,  for centuries. And that’s one of the many healthcare problems. Entrenched power, lack of accountability and secrecy.

Lack of hospital accountability can send patients broke. According to three separate sources, Australians’ are currently being charged between three and five hundred dollars just to walk into private emergency departments and wait for hours, to see a doctor. And no, the cost is not reclaimable on private insurance.

Very little is, a fact never disclosed on the never-ending health insurance ads shown on prime time television. Australia’s personal stories of being left up to twenty thousand dollars out of pocket for private cancer treatments receives only nursery media coverage. But frustraition caused by unaffordable private medical bills continues to simmer. One Brisbane obstetrician has recently stated that she believes it’s “criminal” that even the most comprehensive insurance policies fail to cover medical bills. Lack of hospital accountability can also put patients at risk of substandard care.  

At present private hospitals routinely withhold information on their errors from the national MyHosptials website. This is despite the fact that publishing hospital error rates is a proven way to reduce them. Several years ago a report was commissioned by Private Healthcare Australia into six hundred private hospitals. It involved looking at twenty-five million data points and assessing issues like infection rates and unexpected readmission post discharge. The insurers wanted to publish the data to give the public information to make informed choices. The hospitals threatened to sue.

Private Healthcare Australia apparently approached politicians for assistance but both sides of the house refused to assist with publishing a report that could have potentially, saved thousands of lives. The report is now kept hidden from the over-burdened tax payers, left forking out billions each year for private insurance and out of pocket medical costs, with no obligation for outcomes to be improved. As Dr Armitage, CEO of Private Healthcare Australia said, “The real gain for the health system is in fixing rats**t outcomes. But governments of all persuasions won’t let us off the leash.” News.com, 10th March 2013

So what does an analysis of hospital statistics on cost and quality reveal? Since World War II, Western governments welfare budgets have grown exponentially. Their rise is being driven by healthcare costs, which form an ever-increasing part of government costs. As public debt skyrockets, there is a consensus among economists that European cannot continue to find it’s healthcare systems. 

It is being speculated that public debt may form up to 120 percent of Gross Domestic Produce in Europe, by the end of 2025. The rising costs of healthcare are not being accompanied by a decrease in hospital errors, preventing out of pocket costs and increasing customer service. The USA now publishes figures suggesting that one in three deaths in the USA result from hospital errors. Medical debt is the largest cause of personal bankruptcy in the USA. Only fifty percent of patients finish their medical treatments. Dissatisfaction with the lack of education, support and involvement in their care, is seen a major cause.

Where is all this money going? A review of the costs of medical salaries reveals that doctors fees are not a major factor in rising health costs. Neither is the price of pharmaceutical drugs, despite this industries notorious market manipulation, it’s army of political lobbyists and fanatical secrecy.  

The greatest share of expenditures in health care, or the largest part of rising health care costs, is in the structure of its actual service delivery. The delivery of heath services, stripped of pharmaceutical drugs represent a whopping 72 percent of total health-care expenditures within Europe. In short, hospitals are directly involved in driving the ever increasing costs of healthcare. So why not reform them?

In Australia, health funding is fragmented across a wide range of organisations. State and Federal governments, private insurers and individual patients who now pay up to seventeen percent of the health budget. None of these groups share any meaningful data about money paid out versus quality of services delivered. What they do all share however, is a passive funding model. All bills are paid equally, regardless of errors or successes. There is no way for governments or individuals to assess different providers and compare their prices and services.

It is also dead easy for governments to avoid the hard work of making such a powerful industry accountable. It’s much easier to procrastinate, cover up and push the real issues under the carpet. Powerful health groups like private hospital networks make millions of dollars in political donations to major parties. There is no money in reforming health care into an acceptable, affordable, modern industry. But there is plenty of money to be made in turning a blind eye to the estimated 30% to 40% of the health dollar estimated to be spent on ‘waste, fraud and unnecessary tests’.

As so while politicians blame, Western budgets burn and patients continue to suffer unnecessary. Is this another Greek tragedy in the making? Wikihospitals July 2015


Hospitals may be ordered to take patients even when full. The Age Newspaper. July 10th 2015. Julia Medew.
Health Insurers say some private hospitals offer costly and substandard care. News.com. March 10th, 2013.
Hospital Errors are the Third Leading cause of Death in the US. Hospital Safety Score. The Leapfrog Group. 2015.
What healthcare needs: real consumers and dynamic competition. 24th October 2013. The Atlantic.
Unaccountable; what hospitals won’t tell you and how transparency can revolutionise healthcare. Bloombsury Press 2012. Marty Makary