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Private hospitals cost less than public sector

16 September 2011 - 2:22pm

The Productivity Commission's examination of the public and private health systems has revealed some interesting data about their respective hospital costs.

The Australian Private Hospital Association (APHA) has analysed the data and states: "The commission has found that on average treatment in private hospitals costs $130 less than in public hospital."

The news is great for private health insurance policyholders across Australia.

APHA's executive summary states: "The commission’s data shows that when looking at the costs that private hospitals can control, they cost 32 per cent - or $1,089 - less than public hospitals."

Total expenses included a range of the cost of treatment and materials through to administrative overheads and asset depreciation.

After canvassing the entire report, the APHA has concluded that 50 per cent of cases which used similar hospital services in both sectors were found to be cheaper in private hospitals.

18 per cent of services were said to be cheaper in public facilities, with a further 32 per cent to be approximately the same.

APHA believes that the figures clearly show the benefits of the private health system.

They also add that facilities in the private sector also "have a more complex casemix than public hospitals" - meaning that they are able to offer a wider range of services.