Qld Health loses more than $800m under private billing scheme

A SCHEME to enable doctors to practise privately in public hospitals has cost Queensland Health $804.24 million in the past nine years.

The figure is derived from the $752.47 million difference between the payments to senior medical officers and Queensland Health's share of earned revenues and the $51.77 million in unrecovered administrative support costs.

A Queensland Audit Office report, tabled in Queensland Parliament on Thursday, found revenue that could be generated under the scheme was lost through doctors not actively participating in the private billing scheme, as well as complex, inefficient and inconsistent systems needing substantial manual processing.

The report writers estimated Queensland Health could have secured an extra $22.76 million in revenue across a variety of billable activities under the scheme in 2011-12.

For the 2013-14 year, Queensland Health has identified a further revenue uplift of $17.73 million in outpatient bulk billing.

The audit office has recommended immediate changes to make the scheme financially sustainable, setting clear targets for desired outcomes and developing an oversight body to enforce contractual obligations.

The report found the "right of private practice" scheme was not attracting significant patient activity away from the private sector but there was credible evidence category two elective surgery patients choosing to be treated privately received priority access, compared to public patients.

The audit found several scheme variants operating in Queensland which were supposed to be cost neutral.

Senior medical officers, or specialists, are paid an allowance and, in exchange, they assign all private practice revenue to the hospital where they are working.

That hospital and health service then absorbs the direct and indirect costs.

But the audit found the allowance was used as salary supplementation to attract and keep staff across Queensland, including in regional areas, rather than as a revenue raising measure.

The report found a decision in 2006 to amend the scheme - expanding it to those ineligible to bill, non-specialists and emergency department SMOs - "further entrenched the cultural belief that the right of private practice was a mechanism to effect a pay rise".

"It is clear that the concept of cost neutrality is now a foreign consideration to all involved," the report read.

"This is typified by the experience in 2011-12 when almost half of those SMOs on Option A allowances generated no private practice revenue.

"Our experience during this audit is that there is significant confusion and misinformation about this matter."

The report found the scheme had been successful in retaining more senior medical officers in the public health system per head of population than before but, because Queensland Health has not set any clear growth targets, "it is impossible to calibrate this apparent success properly".

Health Minister Lawrence Springborg is expected to respond to the report later today.

Topics:  doctors public hospitals queensland health

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