Beware propping up ‘bricks and mortar’ hospitals disrupted by ‘virtual care’

The deep dive by The Australian Financial Review’s new health editor Michael Smith into the standoff between private hospitals and health insurers is the jumping-off point for discussing the principles that should drive the modernisation of Australia’s health system. That should encompass a big picture reimagining how to organise and pay for the kind of healthcare services an ageing Australia needs, setting aside scare tactics about “US-style managed care” promoted by those with vested interests in the status quo.

For now, in one corner stand the operators grappling with soaring costs and wages, falling patient numbers and racking up losses amid a spate of hospital closures. In the other corner are the health funds generating record profits amid a post-pandemic membership boom, whose bottom lines are subsidised through the private health insurance rebate and Medicare levy surcharge.