Private vs public hospitals – what’s the difference?

Hospital stays for elective or non-urgent treatments can usually be offered through either a public or private hospital. But how can you decide which is the better choice for you? We take a look at the main differences between our public and private hospitals, and some of the pros and cons of each option.

How does the private and public healthcare system in Australia work?

The healthcare system in Australia consists of both government and privately funded services. Medicare is the government-funded system and everyone with a current Medicare number can be admitted free-of-charge as a public patient in a public hospital for treatment deemed clinically necessary. Medicare holders also have part, or all, of the costs of seeing a GP or specialist subsidised (called bulk-billing), as well as the cost of some approved medications through the Pharmaceutical Benefits Scheme (PBS).

In addition to these public services, there are a number of privately run hospitals and centres that do not receive the same funding from Medicare and therefore charge patients directly for services. Taking out private health insurance can help cover some of the costs of being treated in a privately run facility.

What is the difference between a public and private hospital?

Private Hospital

If you opt to be treated in a private hospital, you will generally have more choice about the care you receive. This can include choosing which doctor treats you and electing a certain type of treatment for a condition. You will usually have a shorter wait time for your treatment, and while in hospital you are more likely to be given a private room and other optional extras that could make your stay more comfortable.

If your private health insurance includes Hospital cover, it will most likely help fund some of your costs during a private hospital stay, although it may not cover all costs. It is a good idea to check with your insurer or read your PDS and other policy documentation to understand what excess (the amount you pay your insurer when you make a claim) and out-of-pocket expenses you may need to pay for your particular treatment.

Public Hospital

Public hospitals in Australia are typically considered to be of a high standard with highly trained medical professionals and world-leading facilities, with seven of our hospitals making Newsweek’s annual list of the world’s top 250 hospitals. In fact, according to Health Direct, they may have better medical facilities than private hospitals “and are usually equipped to handle more complex cases”, which generally involves treating those with multiple conditions or chronic illnesses.

Assuming it’s deemed medically necessary, the care you receive in a public hospital will be free of charge, although you may have to wait longer for elective surgeries, which is a term used for surgeries that are not conducted as a result of an emergency presentation but still medically necessary and may even be required urgently.

How do public and private hospitals compare?

There are some distinct differences when it comes to public and private hospitals. We take a look at some of the more common criteria that may affect your decision making.

Private patient in a private hospital

• Accommodation type: You will generally stay in a private room, depending on availability and your level of cover.

• Choice of doctor: You can typically choose which doctor you’ll be treated by.

• Choice of treatment: You may be able to choose a specific type of treatment if multiple options are available.

• Waiting period: You will be able to avoid public hospital waiting times, with waiting periods dependent on the waiting time for your chosen specialist. But keep in mind that your health insurance policy may have a waiting period of its own for when you can claim your hospital cover.

• Complex care: May not always be available in a private hospital. If your private hospital does not have the facilities or means to treat your condition, you will be transferred to a public hospital that can. Even if you’re treated in a public hospital as a private patient, you may be later transferred back to your original private hospital for follow-up care.

• Cost: Your accommodation and specialist’ fees will be either partly or fully funded by your private health insurer. Depending on your level of cover, you may have to pay excess and out-of-pocket expenses.

Public patient in a public hospital

• Accommodation type: Typically you will be in shared accommodation, but private rooms are still a possibility depending on availability and the nature of your admission.

• Choice of doctor: You will generally be treated by the doctor available at the time of your admission.

• Choice of treatment: You may be provided with some options but will generally receive the treatment recommended by your treating doctor.

• Waiting period: There can often be lengthy waiting periods for elective surgery. According to the Australian Institute of Health and Welfare (AIHW), 50% of patients on a public hospital waiting list waited at least 40 days for admission in 2021-2022.

• Complex care: Most complex cares are undertaken in public hospitals as they are often better-equipped to manage it.

• Cost: Access to public hospital services is provided based on clinical necessity but anyone in Australia with a Medicare card will receive care free of charge as a public patient. However, this is not applicable for all services. For example, you may need to make co-payments for pharmaceuticals you receive as part of your hospital care.

Learn more: Pros and cons of private health insurance

Can you be treated as a private patient in a public hospital?

If you have private health insurance and are admitted into a public hospital, you may be asked by the hospital if you would like to be admitted as a private patient. If you choose to be treated as a private patient in a public hospital, you will receive similar services as you would in a private hospital, such as being able to choose your own doctor and staying in a single room, if availability allows. As mentioned above, you may also be later transferred to a private hospital for follow-up care.

Researchers from the University of New South Wales, La Trobe University and the University of Queensland conducted a study in 2019 where they worked collaboratively to speak with Australians who have private health insurance and opted to use it for treatment in a public hospital. The researchers determined that while some hospitals may offer benefits such as private rooms, free parking and coffee vouchers to their private patients, being treated as a private patient in a public hospital had no effect on the quality of medical care patients received, and it was purely a matter of personal preference.

The researchers also advised checking with your insurer about any excess or out-of-pocket expenses you may incur should you choose to be a private patient, and added that many public hospitals employ ‘patient liaison officers’ who should be able to answer questions you may have about the process.

Ultimately the decision on whether to opt for treatment in a private or public hospital is a personal choice. Here in Australia, we are fortunate to have access to high-quality care and world-leading medical professionals regardless of which option you go with. If you have private health insurance, it could be a good idea to check what your policy covers and any out-of-pocket expenses you may incur, so that if you do opt for private treatment there aren’t any surprise fees and charges to greet you upon discharge.

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