Non-government hospitals on average deliver quality services at less cost than government-owned hospitals, and the new Independent Hospital Pricing Authority must work closely with nongovernment hospitals if savings in health expenditure are to be achieved.
Catholic Health Australia (CHA) cited Productivity Commission findings on the cost efficiency of non-government hospitals compared to government hospitals in endorsing a Senate Inquiry report recommending Parliament pass the legislation to create the pricing authority.

CHA chief executive Martin Laverty pointed to the commission's conclusion that non-government public hospitals were more efficient than government hospitals, with efficiency ratings of 93.6 per cent to 89.1 per cent respectively.

"Based on these Productivity Commission findings, we calculate upwards of $1.5 billion in annual hospital cost savings could be achieved if the NGO efficiency benchmark was met across the nation's public hospital system," Mr Laverty said.

"A Senate Inquiry report released today recommends legislation to establish the new hospital pricing Authority be passed. With some 2,700 non-government public hospitals beds across our national network, CHA also believes the legislation should be passed.

"The new pricing body certainly has its work cut out for it. Government hospitals account for their costs very differently to non-government hospitals. The Authority needs input of NGO hospitals in defining what an efficient national hospital price should be.

"All costs of operating a public hospital can be accounted for in a non-government-owned hospital per episode price. Not all government-owned hospitals are able to account for some overhead costs met by their department or state or territory government.

"If taxpayers are to get the best value for money, all costs and payments involved in running government and non-government public hospitals will need to be transparently examined," Mr Laverty said.

The Senate report and Government have both recognised the unique status of the 2,700 public hospital beds operated as part of the CHA network.

"We'd prefer the legislation require a person drawn from non-government hospitals be appointed to the board of the new Authority. Today's Inquiry report canvasses this proposal, and we ask the Parliament to consider the recommendation made by the Opposition to amend the legislation.

"We also yesterday received assurances from the Health Minister that the Authority will take into account overhead cost differences between government and non-government hospitals. This assurance is welcomed by non-government hospital operators.

"When Parliamentary debate on the pricing authority resumes, we ask Parliamentarians to remember the unique characteristics of non-government hospitals," Mr Laverty concluded.

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