First no gap fee private hospital opens in Melbourne

A hospital described by backers as Australia’s ‘first private hospital with no out-of-pocket costs’ has officially launched in Melbourne’s east.
 
Adeney Private Hospital, which has 60 beds and five operating theatres, opened its doors on Tuesday in a ribbon-cutting ceremony attended by a bipartisan group of politicians.
 
According to its owners, the hospital will not charge patients out-of-pocket costs for surgeons, theatres, anaesthetists, imaging, pathology, medical infusions or PBS medications for a range of treatments.
 
But those offerings only come to those who are members of an eligible private health fund.
 
The hospital was developed as a joint venture between medical professionals and Amplar Health, Medibank’s health service delivery company.
 
Medibank is one of the health funds signed up, along with Bupa, with negotiations understood to be ongoing with other funds.
 
The hospital’s opening comes at a time when Australian healthcare continues to change and evolve, with patients looking for different paths to treatment.
 
Last year, Bupa announced it will offer members three telehealth bookings per person, per year, while nib offers members digital GP consults for a fee.
 
Associate Professor Rashmi Sharma, Chair of the RACGP Expert Committee – Funding and Health System Reform, said the definition of non-standard care and what is covered will be key.
 
‘The devil is in the detail, and obviously patients need to go in with informed consent,’ she told newsGP.
 
She also notes that while the no out-of-pocket fee sounds attractive, other factors are important for GPs providing referrals.
 
‘We like to refer to non-GP specialist colleagues who we feel comfortable with, who we have a relationship with, who we know will look after our patients,’ Associate Professor Sharma said.
 
‘Obviously, we have to take the patient’s financial circumstances into account, but we don’t simply want referrals to be done on the basis of cost, it’s got to be a balance between the two.’
 
At Adeney Private Hospital, more than 100 doctors will provide treatment for specialties including colorectal, breast, endoscopy, ENT, gastroenterology, oncology, orthopaedic, plastic and reconstructive, upper gastrointestinal, urology, vascular and general surgery.
 
According to its Chief Executive Louise O’Connor, no other private hospital in Australia currently offers as wide a range of treatments with no out-of-pocket costs across a patient’s stay.
 
‘The point of difference for Adeney Private Hospital is that it is a no out-of-pocket hospital in its entirety for those health funds that sign up to the model,’ she told newsGP.
 
‘What that basically means is the patient will not get any out-of-pocket bill from the surgeon nor the anaesthetist, nor the radiology department or the pathology department or pharmacy.’
 
Ms O’Connor also said if someone requires non-standard treatment, then there may be out-of-pocket costs which would be discussed with the doctor and the hospital in advance.
 
She said one example could be a patient with end-stage cancer who opts to pay for an out-of-pocket cost for a drug that is not on the PBS.
 
When asked on ABC’s Health Report about potential conflicts of interest, Ms O’Connor said any doctor who is also a hospital shareholder would have to declare that when admitting a patient.
 
Associate Professor Sharma said the venture will be worth tracking, as well as emphasising the importance of communication between medical specialties.
 
‘Patients are going to spend most of their time out in the community, so if you want the best investment with your spending, talk to the people who are delivering the majority of their care, which is general practice,’ she said.
 
‘If this model proves successful, maybe it’s something that can be explored further in the future.’
 

MPs from all sides of politics sitting next to Amplar Health Chief Executive Rob Read at Adeney Private Hospital’s ribbon cutting ceremony.

Ms O’Connor said its backers hope the model could represent a shift in the Australian healthcare landscape.
 
‘If I spoke to some of my doctor investors, they would say that’s exactly what they’d like to see,’ she said.
 
‘Their concern and their reason for trying to create a new private hospital was because they were concerned about the rising health costs in the private health system, and they were seeing many of their patients question the value of their private health insurance.’
 
According to Ms O’Connor, early stages of planning involved discussions around what is important to the community, particularly around the continuum of care, giving the example of a patient with cancer.
 
‘There was a recognition from the medical staff that we can’t just do surgery,’ she said.
 
‘We have to look at, how does a patient go in and out of the health system?
 
‘The cancer journey is an important one, because that often involves a diagnostic procedure first, then a recovery at home, then a surgical intervention to remove a cancer, then recovery at home, and then obviously chemotherapy or some sort of immunotherapy treatment afterwards.
 
‘That whole episode of care can take six months or more, so the whole no out-of-pocket model needed to be able to address that and not just be one piece of the puzzle.
 
The hospital, which reportedly cost $100 million to build, is due to receive its first patients in operating theatres on 4 March.
 
Around 130 full-time equivalent staff are scheduled to work there once it fully opens.
 
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