Private Hospitals Backed to Tackle Coronavirus

The federal government will shoulder the cost of running private hospitals during the coronavirus pandemic, underwriting the financial viability of overnight and day hospitals across the country.

A $1.3 billion package has been struck with 657 private hospitals and will mobilise the sector’s 105,000 person-strong workforce to help with the Covid-19 response.

The federal government will contribute 50 per cent of the funding, while states and territories will eke out partnership arrangements with the sector in coming days.

One third of Australia’s intensive care units sit in the private sector. The addition of 2,200 ventilators from the private system will help Australia reach its 7,500 ventilator target.

The integration of the private health system with the public health system will cost $1.3 billion, health minister Greg Hunt said.

“In terms of the capacity, it means over 34,000 beds and chairs that will be made available to the public hospital system,” Hunt said.

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In a letter to private health providers published on the ASX on Tuesday, the minister outlined details of the guarantee.

“A fundamental principle of this agreement is that it contributes to your ongoing viability, not profits or loan or debt repayments,” Hunt said.

“In addition, the sector is working with [p]rivate hospitals on relevant liquidity, covenant, deferral or debt support as required.”

The letter mentions the six month deferral of loans and will take into account the revenue received by private hospitals from the states and ongoing privately-funded urgent surgical services.

Scott Morrison announced the ban on non-urgent elective surgery, in the first swathe of restrictions on Wednesday, in a move that caught the sector “by surprise”.

Hunt said that Tuesday’s deal is a “very significant stride” in increasing the public system’s capacity at the same time as guaranteeing the financial viability of all 657 private hospitals.