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4102.0 - Australian Social Trends, 2001  
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Contents >> Health >> Health Services: Private hospitals

Health Services: Private hospitals

The number of patient separations from private hospitals grew by 55% during the 1990s.

In 1998-99 there were 502 private hospitals in Australia. They ranged in size from less than 25 beds to more than 200, and included religious and other non-profit hospitals as well as those run for profit. With almost a third of all available hospital beds in Australia, these hospitals accounted for a significant proportion of hospital activity. They catered for just over a third of all admitted patients who left hospital in the year (34%) and provided 28% of the total days of hospital care. These proportions were greater than at the beginning of the 1990s, as growth in these areas by private hospitals was not matched by public hospitals.

A notable feature of the increase in hospital activity was a shift to same-day procedures. A shift to performing some investigative procedures, and surgery, on a same-day basis was made possible by changes in medicine, such as improvements in anaesthetics and the development of fibre optics and laser surgery. Although such a shift was underway in the 1980s, it has been encouraged by federal government policy since 1989, in particular by changes to the minimum health rebate system introduced at that time.1 The shift was achieved mostly by a rapid increase in day procedures in acute hospitals, and also by an increase in the number of free-standing facilities which specialised in day procedures.


Information on private hospitals
The information presented here has been compiled from the Private Health Establishments Collection, conducted by the ABS, which covers all private hospitals in Australia. Further information can be found in Private Hospitals, Australia (cat. no. 4390.0).

Private hospitals are privately owned and operated institutions in which patients are treated by the doctor of their choice. Patients are charged fees for overnight accommodation and other services provided by the hospital and by medical and paramedical practitioners.

Types of private hospital
Acute care hospitals are hospitals which provide at least minimal medical, surgical or obstetrical services for admitted patient treatment and/or care and provide round the clock comprehensive qualified nursing services. They must be licensed by the State or Territory Health Authority.

Psychiatric hospitals are licensed or approved by each State and Territory Health Authority and cater primarily for admitted patients with psychiatric or behavioural disorders.

Free-standing day hospital facilities provide investigation and treatment for acute conditions on a day-only basis and are approved by the Commonwealth for the purpose of basic table health insurance.


Changing mix of private hospitals
In 1998-99 private hospitals comprised 286 acute hospitals, 26 psychiatric hospitals and 190 free-standing day hospital facilities. The great bulk of private hospital beds (88%) were in acute hospitals (the type of hospital familiar to most people in Australia, providing surgery, obstetrics or other procedures together with 24 hour nursing care). The numbers of acute and psychiatric hospitals had changed little over the 1990s, but the number of free-standing day hospital facilities had grown steadily, with the 72 facilities in 1991-92 more than doubling by 1998-99. By 1998-99 these facilities accounted for 6% of private hospital beds and 15% of separations (episodes of patient care) in private hospitals.

Over the 1990s there was some change in the mix of acute and psychiatric hospitals in terms of their profit structure. In 1998-99 hospitals run for profit made up a somewhat larger proportion of these hospitals than in 1991-92 (59%, up from 55%) and also a larger proportion of beds (56%, up
from 49%).

PRIVATE AND PUBLIC HOSPITALS AND BEDS

1991–92
1998–99


Hospitals
Available beds(a)
Average beds per hospital
Hospitals
Available beds(a)
Average beds per hospital
no.
‘000
no.
no.
‘000
no.

Private
    Acute
294
19.4
66
286
22.3
78
    Psychiatric
25
1.4
55
26
1.5
57
    Free-standing day hospital facilities
72
0.6
8
190
1.5
8
    Total
391
21.3
. .
502
25.2
. .
Public
    Acute
713
57.1
80
726
50.9
70
    Psychiatric
45
7.3
161
29
3.0
105
    Total
758
64.3
. .
755
53.9
. .
Total
1,149
85.6
. .
1,257
79.1
. .

(a) In the case of free-standing day facilities, which do not provide overnight accommodation, beds (including chairs and recliners) are provided mainly for short periods of recuperation following treatment.

Source: Private Hospitals, Australia, 1998-99 & 1991-92 (cat. no. 4390.0); Hospitals, Australia 1991-92 (cat. No. 4391.0); Australian Institute of Health and Welfare (AIHW) 2000. Australian hospital statistics 1998-99 AIHW Cat no. HSE 11. Canberra: AIHW (Health Services Series no. 15).


Increase in beds
There were 25,200 beds in private hospitals in 1998-99, up 18% from 1991-92. This was mostly due to an increase in acute hospital beds from 19,400 to 22,300. An increase in beds in free-standing day facilities, from 600 to 1,500, also contributed.

The increase in acute hospital beds occurred despite a slight fall in the number of acute hospitals (3%), because the average number of beds in these hospitals increased from 66 to 78. The increase in the number of beds in free-standing day hospital facilities was consistent with the large increase in the number of these facilities. The average of eight beds per facility did not change.

In contrast to the increased bed numbers in private hospitals, public hospital beds decreased over the period by 16%, from 64,300 to 53,900. As a result, private hospital beds increased as a proportion of all beds, from a quarter in 1991-92 to just under a third in 1998-99.

PRIVATE ACUTE AND PSYCHIATRIC HOSPITALS AND BEDS, BY PROFIT STRUCTURE

1991–92
1998–99


Hospitals
Available beds
Average beds per hospital
Hospitals
Available beds
Average beds per hospital
no.
‘000
no.
no.
‘000
no.

For profit
176
10.1
57
183
13.2
72
Not for profit
    Religious/charitable
81
8.3
102
77
8.7
114
    Other(a)
62
2.4
39
52
1.8
34
Total
319
20.7
65
312
23.7
76

(a) Comprises community, memorial and bush nursing hospitals.

Source: Private Hospitals, Australia 1998-99 & 1991-92 (cat. no. 4390.0).


Beds, separations and patient days
Available beds are beds immediately available (occupied or unoccupied) for the care of admitted patients as required. In the case of free-standing day hospital facilities they include chairs, trolleys, recliners or cots and are used mainly for post-surgery recovery purposes only.

Separations occur when an admitted patient is discharged; transferred to another institution; leaves against medical advice; dies whilst in care; changes status e.g. from acute to rehabilitation; or leaves hospital for a period of seven or more days.

Patient days are the aggregate number of days of stay (i.e. separation date minus admission date) for all admitted patients who were separated from hospital during the year. Periods of approved leave are subtracted from these calculations. Same-day patients are each counted as having a stay of one day.


Increase in patients
The number of patients treated in private hospitals increased over the 1990s, as indicated by the annual totals of separations (episodes of patient care in hospital). There were close to 1.3 million separations from private hospitals in 1991-92, and this rose to close to two million in 1998-99, a 55% increase. Almost all of the increase was in same-day separations (those where the patient was admitted and discharged on the same day). The number of same-day separations more than doubled, from 435,000 to 1.1 million. In contrast, separations after overnight or longer stays increased by only 6% from 846,000 to 893,000.

As a result, same-day separations made up 55% of all private hospital separations in 1998-99, whereas in 1991-92 they made up 34%. Consistent with this change, the average length of stay of patients in private acute and psychiatric hospitals decreased from 4.2 to 3.6 days.

SEPARATIONS FROM PRIVATE HOSPITALS

Source: Private Hospitals, Australia, 1998-99 (cat. no. 4390.0).


The bulk of separations were from public hospitals throughout the period. In 1998-99 there were 3.9 million separations from public hospitals, nearly all of which were from acute hospitals. Separations from public acute hospitals increased by 31% over the period, lower than the increase in separations from private acute hospitals (44%). As a result of their higher increase, private hospitals increased their share of all acute hospital separations, from 28% in 1991-92 to 30% in 1998-99.

The increase in same-day separations observed in the private sector also occurred in public acute hospitals. Same day separations increased from 29% to 45% of all separations in public acute hospitals over the period. This resulted mostly from a doubling of same-day separations (from 861,000 to 1.7 million), while overnight separations increased only slightly.

SEPARATIONS FROM PRIVATE AND PUBLIC HOSPITALS

1991-92
1998-99


Same-day separations
Overnight separations
Total separations
Same-day separations
Overnight separations
Total separations
‘000
‘000
‘000
‘000
‘000
‘000

Private
    Acute
295.1
826.0
1,121.1
741.0
873.0
1,613.9
    Psychiatric
16.3
19.7
36.0
50.6
19.7
70.2
    Free-standing day hospital facilities
123.4
-
123.4
302.1
-
302.1
    Total
434.8
845.7
1,280.5
1,093.6
892.7
1,986.3
Public
    Acute
861.0
2,076.0
2,937.0
1,716.4
2,123.0
3,839.4
    Psychiatric
n.a.
n.a.
n.a.
2.3
18.0
20.3
    Total
n.a.
n.a
n.a.
1,718.7
2,141.0
3,859.7
Total
1,295.8
2,921.7
4,217.5
2,812.3
3,033.6
5,846.0

Source: Private Hospitals, Australia, 1998-99 (cat. no. 4390.0); ABS, 1998-99 & 1991-92 Private Health Establishments Collection; Australian Institute of Health and Welfare (AIHW) 1997, Australian hospital statistics 1995-96, AIHW cat. no. HSE 3. Canberra: AIHW (Health Services Series no. 10); Australian Institute of Health and Welfare (AIHW) 2000, Australian hospital statistics 1998-99, AIHW cat no. HSE 11. Canberra: AIHW (Health Services Series no. 15).


Patient days and length of stay
The length of stay of patients admitted to acute and psychiatric hospitals varies from one day to several weeks. The sum of the days spent in hospital by all patients gives the total number of days of care provided by hospitals. While patient separations measures the throughput of patients, both the throughput of patients and the length of stay contribute to the calculation of patient days. This makes patient days a useful complement to the number of patient separations as an indicator of hospital activity.

There was a 26% increase in total patient days provided by all private hospitals over the period, from over five million to over six million. The increase in the number of same-day patients contributed an increase of 660,000 patient days while the increase in total days for overnight patients contributed 670,000. The latter increase was due not only to the increase of 6% in the number of separations of overnight-stay patients, but also to an increase in the average length of stay of these patients from 5.4 to 5.9 days.

In contrast to these increases, the 15 million patient days for public acute hospitals in 1998-99 was 1% lower than in 1991-92. As a result, private hospitals’ share of total patient days in acute hospitals increased from 23% in 1991-92 to 27% in 1998-99.

PRIVATE SECTOR SHARE OF ACUTE HOSPITAL BEDS AND PATIENT ACTIVITY

Source: Private Hospitals, Australia, 1998-99 (cat. no. 4390.0); Australian Institute of Health and Welfare, National Public Hospital Establishments Database.


Insurance status of patients
Most patients of private acute and psychiatric hospitals were insured with a private health fund, accounting for 73% of separations in 1998-99. Some 25% of patients were not insured with such a health fund. They were made up of patients whose costs were covered by a workers’ compensation or accident insurance scheme; self-funding patients; war veterans whose costs in private hospitals were covered by the Department of Veterans’ Affairs; and Medicare patients contracted from the public sector.2 Insurance status was not reported for a small proportion of patients (less than 3%).

Specialised wards
The types of specialised wards and units private hospitals contain can help to indicate the developing role of private hospitals within the overall provision of hospital services. Hospitals vary in size and in the range of specialised services they provide. Many specialised areas of medicine are expensive to provide, and are needed by only a small number of patients and units dedicated to these areas are more likely to be provided in the public sector. For example, a large public teaching hospital might consist entirely of specialised wards and units which together cover a large range of medical services. Units covering very specialised or developing areas of medicine are rare even among large teaching hospitals.

Over the 1990s, the number of private hospitals which had some of the more common types of specialised wards increased. Consistent with the increase in same-day procedures, the number of private acute and psychiatric hospitals which had a dedicated day surgery unit increased from 30 to 109 between 1991-92 and 1998-99. These units replaced labour wards as the most common type of specialised ward in private acute hospitals. The number of hospitals which had a special care unit of some kind also increased, from 93 to 140 and the number with an emergency unit increased from 10 to 38. There was little change in the number of hospitals with psychiatric wards (46 compared with 44).

Some other types of specialised wards had also become more common in private hospitals. The number of hospitals with oncology units increased from 8 to 49; those with cardiac surgery units from 4 to 17; and those with sleep centres from 2 to 42. Although there were only eight hospitals with neurosurgical wards, this represented a changed situation from 1991-92 when neurosurgical units were virtually unknown outside the public sector.

However, as in 1991-92, many specialised wards were provided exclusively, or almost exclusively by the public sector. Wards which were not included at any private acute and psychiatric hospital comprised acute spinal cord injury units, burns units, infectious diseases units, clinical genetics units, AIDS units and diabetes units. There were very small numbers of several other specialised units, such as transplantation units.

PRIVATE ACUTE AND PSYCHIATRIC HOSPITALS WITH SELECTED SPECIALISED UNITS AND WARDS

1991-92
1998-99
Type of unit
no.
no.

Accident or emergency unit
10
38
Psychiatric ward(a)
44
46
Labour ward
104
101
Special care unit(b)
93
140
Dedicated day surgery unit
30
109
Cardiac surgery unit
4
17
Sleep centre
2
42
Oncology unit
8
49
Neurosurgical unit
1
8
Total hospitals
319
312

(a) Includes alcohol or drug treatment unit.
(b) Intensive care unit, coronary care unit, neonatal care unit, high dependency unit.

Source: Private Hospitals, Australia, 1998-99 & 1991-92 (cat. no. 4390.0).


Procedures
For patients who enter hospital in order to undergo a particular procedure, such as surgery, a ‘principal procedure’ can be noted on their hospital records. The classification of procedures extends beyond surgery to other areas and includes imaging services, and allied health services (services such as physiotherapy and speech therapy).

Nevertheless, some patients, for instance many of those with an infectious disease, may be in hospital primarily for care and monitoring. No principal procedures apply to such patients.

One difference between private and public hospitals was in the proportion of patients to whom a principal procedure was assigned. About 88% of private hospital patients had a principal procedure recorded in 1998-99, compared with 72% of public hospital patients. This may be partly because private hospitals have tended to concentrate more heavily on providing particular procedures, such as surgery, than public hospitals.

Of the more than 1.7 million separations from private hospitals for which a principal procedure was reported, patients who had undergone a procedure on the digestive system made up the largest group (24%). This was mainly a result of the large numbers of endoscopies and fibre optic colonoscopies performed (these are techniques used to investigate symptoms in the digestive tract.) Procedures on the musculoskeletal system (11%) ranked second and gynaecological procedures (7%) ranked third.

The pattern was somewhat different among the 2.8 million public hospital separations for which a principal procedure was reported, where procedures on the kidney and urinary system made up the largest group (18%), resulting from the large number of haemodialysis separations. Haemodialysis ranks high among counts of separations because each patient with kidney failure may require haemodialysis a few times a week for several years, with each treatment counting as an episode of care. Procedures on the digestive system ranked second (13%) and allied health interventions ranked
third (8%).

LEADING PRINCIPAL PROCEDURES(a), 1998-99

Hospitals

Private
Public
Total
Principal procedures groups(b)
‘000
‘000
‘000

Principal procedure reported
1,740.3
2,774.8
4,515.1
    Digestive system
414.8
368.8
783.6
    Kidney and urinary system
117.6
509.1
626.6
    Musculoskeletal system
188.2
195.5
383.7
    Allied health interventions
(c)68.5
232.8
301.4
    Gynaecological procedures
126.6
161.9
288.5
No principal procedure or not reported
246.0
1,084.9
1,330.9
Total separations
1,986.3
3,859.7
5,846.0

(a) Leading five for total hospitals, includes leading three for private and public hospitals.
(b) Based on the International Classification of Diseases, 10th Revision Australian Modification.
(c) Includes separations from acute & psychiatric hospitals only for reasons of confidentiality.

Source: ABS, 1998-99 Private Health Establishments Collection; Australian Institute of Health and Welfare (AIHW) 2000, Australian hospital statistics 1998-99, AIHW cat no HSE 11, Canberra: AIHW (Health Services Series no. 15).


Endnotes
1 Department of Community Services and Health 1990, Annual Report 1989-90, Canberra: AGPS.

2 Productivity Commission 1999, Private Hospitals in Australia, Commission Research Paper, AusInfo, Canberra.

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