This appeared a few days ago:
The mental health crisis gripping Australia’s private hospitals
Some health insurers say stand-alone mental health hospitals are unlikely to exist in 10 years’ time given the challenges they face.
Empty mental health wards are at the heart of the financial challenges facing the struggling $22 billion sector. Robert Duong
Jemima Whyte and Michael Smith
Oct 25, 2024 – 9.48am
Psychiatrist Angelo Virgona is grappling with a paradox in the Australian health system.
Demand for mental health treatment is at a record high. It is the top reason for patients to visit a GP and is the top reason for people aged under 60 to end up in hospital, insurance data shows. Staff at public hospital emergency wards say they are overwhelmed with cases.
But Virgona says, despite the mental health crisis in Australia, particularly among younger people, private hospital psychiatric wards are empty. He says they have been forced to turn patients away for years because they cannot find the staff willing to work on the wards.
Now, Virgona, who is a director of the Royal Australian and New Zealand College of Psychiatrists and has run rural and city clinics, says no one even calls him any more looking for mental health admissions in private hospitals because they know it’s an impossible task.
“People just give up on ringing you up for admissions, we don’t have a doctor who can admit you,” he says. This means the psychiatric wards in private hospitals are sitting empty, leaving Virgona to question how long hospitals can keep the wards open.
“We don’t have enough psychiatrists who want to work in the private hospital system now,” he says.
Empty mental health wards are at the heart of the financial challenges facing the struggling $22 billion private hospital sector, which is the subject of an Albanese government review. The private hospital health check, ordered by Health Minister Mark Butler in June, which collated data from hundreds of hospitals around the country has been completed, but it has not been made public.
However, a summary of the findings from the Department of Health review obtained by The Australian Financial Review singled out declining mental health and maternity services as two key problems for the nation’s 650 private hospitals. While the data on maternity makes sense given the decline in the nation’s birth rate, the opposite is true for mental health.
Soaring healthcare costs are shaping up as a key headache for the Albanese government ahead of the next election. The latest The Australian Financial Review/Freshwater Strategy poll shows health was the third-highest rated concern, with 27 per cent saying it should be a focus for the government. Insurers are also preparing to ask for a big hike in premiums from April next year.
While rising demand for healthcare as the population ages is putting a strain on all parts of the system, the surge in mental health is the area most concerning medical practitioners.
Demand for treatment has never been higher, but wards are closing because psychiatrists do not want to work there. They earn more by treating patients in their own clinics or online. They also blame insufficient rebates from private health insurers.
The Albanese government says more than 3000 lives are lost to suicide each year with demand for treatment higher than ever. Mental illness is also topping private health insurance claims and was the main reason people under 60 spent time in hospital last year, industry data shows.
Beds but no staff
Private hospital operators such as Ramsay Health Care and Brookfield-owned Healthscope say they have the facilities to treat patients but not the staff.
“The maximum hourly earning capacity of psychiatrists treating outpatient and low complexity patients is much greater than those psychiatrists treating the most acute and high-risk patients admitted to hospitals,” says Carmel Monaghan, the head of Ramsay Health Care’s Australian private hospital network, which is the largest in the country.
She says there are patients who are “unable to access the necessary care or languishing in emergency departments and medical wards” because psychiatrists are financially incentivised to assess and treat patients as outpatients, especially for enrolment in the National Disability Insurance Scheme (NDIS).
Treating hospital patients, who are usually admitted for at least 21 days, is also harder work. The psychiatrists in those cases are on call 24 hours a day, seven days a week.
“Psychiatrists appear financially incentivised to favour telehealth and rooms-based work over work in hospital-based settings,” the preliminary findings of the Butler review says. It also says doctors have “limited ability” to charge out-of-pocket fees in hospitals, which was also driving them away.
Department of Health data shows the number of people receiving Medicare-subsidised psychiatric sessions has increased 18.9 per cent from 2019 to 2022. But over the same period, the number of services delivered in private hospitals has fallen 15 per cent.
Pay disparity
Virgona says he earns up to 30 per cent more in his own rooms than when he works at a private hospital.
In the hospital, the doctors aren’t paid for time spent travelling to and from hospitals, talking to nurses, a patient’s family or for taking calls in the middle of the night.
“It’s the worst remunerated role in all of psychiatry. As an in-patient, it’s almost uneconomical,” he says. “But it’s also wonderful, challenging work, providing continuity of care to people in ways not seen in other parts of the mental health sector.”
Many in the industry believe staffing is not the only problem, but that it is time to rethink the old model of care centred around long hospital stays. More people are being treated online or at home.
Patrick McGorry, a former Australian of the Year and mental health expert says home-based care can be managed safely with teams of experts visiting patients two or three times a week, making it a less traumatic experience than staying in hospital.
“You end up getting things like medication reviews which could easily be done on an outpatient basis if there was better infrastructure between the isolated private psychiatrist and the hospital, like a team-based community mental health model. Maybe the insurers and the hospitals need to be wrangled by the government around that,” McGorry says.
Private health insurers, which fund the hospitals, also argue the old model is flawed, with one executive saying there is no future for stand-alone medical facilities. In February, the 75-bed Bethesda mental health facility in Perth shut down after a year of operation. The West Australian government took over the lease.
“We will always need hospitals for people experiencing severe illness and those needing medical support to detox from alcohol and other drugs,” says Rachel David, the chief executive of Private Healthcare Australia, which represents the major health insurers.
“But the evidence is increasingly showing that people recovering from alcohol and drug addiction do better if they receive ongoing treatment at home and in the community so they can continue to live a productive life and overcome environmental triggers for their condition.”
“For these reasons, stand-alone mental health hospitals are unlikely to exist in 10 years’ time,” she says.
The insurance question
Australian Institute of Health and Welfare data shows health insurance funded 54 per cent of all mental health hospital admissions in 2022-23.
Mental health hospital admissions are expensive for health funds because the average length of stay is 27 days, which means admissions can cost more than $10,000.
Ramsay says both mental health and maternity are only included by health funds in gold cover policies which are increasingly unaffordable for young people who are the largest users of these services.
However, insurers dispute this saying a government mental health waiver means a person with basic cover can be upgraded to gold cover if they are admitted to a mental health facility where they will be covered during their stay.
An annual survey released by the Royal Australian College of GPs (RACGP) showed a sharp rise in the number of patients seeing a GP with mental health concerns. About 71 per cent of GPs report mental health as the top reason for patient consults, up from 61 per cent when the survey started in 2017.
“GPs from across Australia have told us that they’re seeing more patients with multiple, complex health issues including mental health, and that many can’t afford to see specialists or allied health professionals privately,” RACGP president Nicole Higgins says.
“After decades of underfunding and the Medicare freeze, we need meaningful investment in patients’ rebates to make essential healthcare affordable for all Australians. With the current cost-of-living crisis, this is more important than ever,” she says.
Some healthcare providers are looking at new models that combine hospital care with more out-patient services.
IMH Deakin Private Hospital is a joint venture between insurer Medibank and Aurora Healthcare that has a model of shorter stays, 14 days instead of 21 days, for young people seeking mental health treatment.
Anna Smith, the hospital group’s director of clinical services, says the model which seeks to get people home sooner and into out-reach programs has led to reduced readmissions.
As the private sector is forced to close down unprofitable operations and reassess the way it treats one of the country’s fastest-growing illnesses, many believe home and online care is the way forward although some GPs are concerned as patients still need supervision and the experts to help them remain in short supply.
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I have to say this all paints the picture of a system that is on the edge and is struggling to meet the demand it is faced with while knowing there is a a large backlog of unmet need.
This is surely not a stable and satisfactory situation – and so it seems likely we will see problems break out all over in the next few years.
I wonder
what solutions will emerge. We sure need some smart thinking to bolster this
aspect of the system! Right now it all sounds petty grim!
Any clever ideas?
David.
