Private versus public? Examining hospital use by a privately insured population in New South Wales, Australia, using...

Objective To examine hospital use characteristics of a privately insured cohort including hospital setting (public or private), declared insurance status and category of services received during hospital admission. Methods The study population consisted of 14276 people with membership of a private health insurance (PHI) fund in New South Wales, Australia. The final study cohort included 9004 people with at least one hospital admission over a 6-year period from 1 January 2010 to 31 December 2015. PHI claims data were linked with public hospital records from a Local Health District. Hospital utilisation measures include number of admissions and length of stay. Measures were categorised by hospital user group (public only, private only or both), declared insurance status (PHI or public patient), type of service and admission case weight. Results The study finds that despite having PHI, 40% of people receive services exclusively in a public hospital in the 6-year study period. Additionally, only 62% of overnight hospital admissions for the study population are claimed on PHI. There are differences in hospital utilisation for medical- and surgical-related admissions. Seventy percent of people with a medical admission receive services only in public hospitals, but a similar proportion of people (66%) receive services only in private hospitals for surgical admissions. Conclusions People with PHI make considerable use of public hospitals both as a public and a private patient. For this privately insured cohort, public hospitals are more frequently used for medical-related admissions and also for more resource-intensive admissions compared with private hospitals. What is known about the topic? There are multiple government incentives to encourage people to take out PHI policies in Australia. Although PHI is closely associated with private hospital utilisation, people with PHI can still use public hospitals as either a public patient, in which the service is fully government-funded, or as a private patient in which PHI contributes funding towards the cost of hospital admissions. What does this paper add? This study provides the first analysis of hospital utilisation of a privately insured cohort in Australia that reports on the interaction between public and private hospital use and declared insurance status, including utilisation differences based on service type. What are the implications for practitioners? Although there are financial incentives offered by the Australian Government to encourage uptake of PHI, the study findings show that people with PHI still make considerable use of public hospitals both as a public and private patient. Future policy reforms relating to the regulation of PHI in Australia should consider the nuanced differences in the way people with PHI use public and private hospitals to optimise resource allocation.