The General Hospitals industry in Australia comprises nearly 1,300 hospitals and about 82,000 beds. Private and public hospitals account for about one-third of all revenue generated by the Health Care sector.
Private and public hospital revenue has grown at an average rate of 4.9% over the last five years, and is expected to reach $43.8 billion in 2009-10.
Hospital revenue is growing faster than the increase in bed numbers, which reflects a growing number of patients being admitted to hospitals. There has been a steady decline in the number of hospital beds per thousand people, which currently stands at about 3.8 beds per thousand. A fall in the average length of stay of patients has supported rising admission rates.
Expenditure on public hospitals is expected to grow at an average rate of 5.3% in the five years to June 2010. In 2009-10, government expenditure on public hospitals will reach $34.8 billion. The Commonwealth Government currently provides around 40% of this funding, and this will rise to 60% under the National Health and Hospitals Network Agreement. Revenue generated by private hospitals is growing more slowly, increasing by an expected average of 3.8% per year over the same period.
The private sector accounts for about 32% of all hospital beds, a share that has remained relatively steady over the last five years. For-profit hospital operators account for about 55% of the private hospital sector.
While the relative size of the private sector has remained constant, market share has been moving. A decade ago there were five major for-profit private hospital operators in Australia. By 2004-05, the number was down to three (Affinity, Ramsay Healthcare and Healthscope), which accounted for a total of about 47% of all private hospital beds.
After a spate of acquisitions and disposals, the two largest for-profit hospital operators, Ramsay and Healthscope, now account for about 30% and 12% of all hospital beds in Australia, respectively. Meanwhile, Ramsay Healthcare has stated that a rationale for the company’s offshore expansion includes Australian competition regulation constraints.
