Private O&G Services Under Threat in Australia Due to Systemic Gender Bias

News

Private O&G Services Under Threat in Australia Due to Systemic Gender Bias

�鶹ֱ��leads call for urgent reform in private obstetrics and gynaecology sector.

RANZCOG

The Royal Australian and New Zealand College of Obstetricians and Gynaecologists

Updated

14 November 2024

Australia’s private obstetrics and gynaecology services are facing a significant threat, with systemic gender bias in funding and insurance contributing to an unfolding crisis that will profoundly limit options for women and further strain the nation’s public healthcare system.

The Royal Australian and New Zealand College of Obstetricians and Gynaecologists (RANZCOG; the College) convened a roundtable on 14 November bringing together service providers, policymakers, insurers, and other market participants from the private sector to discuss urgent collective reform needed to protect services.

The current crisis.

Private maternity services are becoming financial unsustainable. Between 2015–16 and 2022–23, 9 private hospitals closed their maternity wards, and 2 hospitals with maternity services ceased operating. ¹ In the meantime, at least an additional 4 private maternity services have closed, or are scheduled to close. ^{[See Table 1]}

The Department of Health and Aged Care’s recent Financial Health Check of the Private Hospital Sector, highlights obstetrics and mental health as areas “of particular concern,” underscoring the need for immediate action.

There are also increasing barriers to provision of some gynaecological procedures in the private setting. The remuneration private hospitals receive from insurers does not offset the hospital’s expenses for providing these services, therefore practitioners are sometimes advised not to offer them.

What is happening?

Health funds frequently underpay private hospitals for obstetric and gynaecological services, failing to acknowledge the actual costs. As a result, when evaluating financial viability, private hospitals tend to favour more profitable specialist services over those focused on women’s health.

Maternity care is especially costly for private hospitals to provide due to the unpredictability of labour, which leads to highly variable demand. Hospitals must have staff available 24/7 – including services such as neonatology, paediatrics, and anaesthetics – but insurers don’t account for these fluctuations, underpaying hospitals and rendering such services financially unsustainable.

Financial challenges are exacerbated by declining demand. Private hospital births declined by 4.7% from 2018/19 to 2022/23.² Fewer women are opting for private maternity care due to rising premiums and out-of-pocket costs indicative of gender bias in health insurance. Women with private insurance face disproportionate expenses for childbirth. Full coverage for pregnancy and birth is only available through the most expensive “gold cover” policies, which also require a 12-month waiting period for obstetric claims.

For aspiring parents, the costs for “gold cover” policies are substantial, totalling approximately $6,557.25 per year during the 12-month waiting period. For those who become pregnant after the waiting period, an additional $4,917.93 is required for a further nine months of coverage. This brings the total to a staggering $11,475.18 ³, a figure that is simply unaffordable for many families in the current cost-of-living crisis.

As a result, many women who hold private health insurance drop obstetrics and gynaecology cover to make their premiums cheaper opting to receive care through public providers, adding strain to the underfunded and overburdened public system and simultaneously reducing demand for private maternity services in a perpetuating cycle.

What about Medicare?

Growing out-of-pocket costs for obstetrics and gynaecology (O&G) patients highlight the gap between actual fees and Medicare rebates, which have not been updated in decades and fail to cover the true cost of care. As a result, specialists often charge gap fees to make up for what Medicare Benefits Schedule (MBS) items do not cover.

Additionally, the MBS tends to provide higher remuneration for non-O&G procedures; for instance, anaesthetists receive more favourable payments, including higher remuneration for overnight procedures. In contrast, obstetrics and gynaecology services are underfunded, leaving patients to bear a larger share of the costs.

Gender-bias within the MBS also plays a part. The Extended Medicare Safety Net (EMSN), which covers up to 80% of additional out-of-pocket costs once an annual threshold is met has caps on obstetric care and IVF. Other specialties, like psychiatry, are unaffected by similar restrictions. This exclusively disadvantages women.

A thorough review of obstetric and gynaecological MBS item numbers must be undertaken to remove current gender biases within the system.

Why must this problem be urgently addressed?

Australia’s healthcare system, ranked among the best globally, relies on a robust private sector to support the public system. Currently, one in four births takes place in private hospitals⁴, and 70% of elective women’s health procedures occur in private settings.⁵ The financial disincentives and structural biases that undermine private obstetric and gynaecological services disrupt this balance, putting further strain on public facilities that were not designed to manage such a demand. We must make private healthcare sustainable to maintain Australia’s health ecosystem.

Who bears the burden?

The decline of private obstetrics and gynaecology services deprives women of choice and jeopardises access to timely, specialised care. Women facing high-risk pregnancies or those who prioritise continuity of care with an obstetrician, as well as those requiring gynaecological procedures sooner than the public system can accommodate often rely on private services.

In Australia, the average wait time for public gynaecology procedures is 454 days (1.25 years)⁶. Without private options, the strain on the public system increases, leading to even longer wait times and worsening health conditions for many women.

The closure of private facilities also exacerbates growing “maternity deserts” in rural, regional, and remote areas, forcing some women to travel hours for essential care. Those with private health insurance in these areas find it increasingly difficult to use their coverage. Moreover, as private obstetrics services close, multidisciplinary practicing specialists often leave these communities, further reducing access to care.

The neglect of private women’s health services reflects the systemic gender bias embedded in Australia’s healthcare and policy frameworks. Addressing this issue is urgent; we must prioritise private practice reform to preserve their choices and ensure equitable, accessible care for all women.

What is �鶹ֱ��doing?

�鶹ֱ��held a Private Practice Roundtable at Djeembana (1 Bowen Crescent) in Melbourne on 14 November which convened key stakeholders from the College, the government, the private insurance sector and other organisations with an interest in private O&G.

The aim of the roundtable was to understand the current private practice landscape, challenges and opportunities across Australian states and territories, work with private health insurers to make maternity care more affordable and accessible and aim to improve gender equity and women’s choices.

The event attracted high-profile attendees including the Hon. Ged Kearney, Assistant Minister for Health and Aged Care, representation from the office of Shadow Minister for Health and Aged Care, Anne Ruston (pre-recorded by Anne), First Assistant Secretary, Health Workforce, Eliza Strapp, and Member of Parliament for the Federal Seat of Kooyong, Dr Monique Ryan.

Appendix:

Private Maternity Service Closures Outside of Reporting of the Financial Health Check of the Private Hospital Sector	State/Territory	Closure date
Gosford Private Hospital	New South Wales	Mar-25
Healthscope Sydney Southwest Private Hospital	New South Wales	Dec-24
St John of God Bunbury Hospital	Western Australia	Jun-24
Mater Private Hospital Redland	Queensland	May-24