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Private health insurance claims for patients waiting to be discharged to aged care homes have doubled as older Australians spend almost twice as many days in hospital beds as they did six years ago.
The trend emerged in high-cost claims data released on Friday, which showed health funds paying up to $700,000 for a single hospital stay.
Bed block that occurs when patients are stranded in hospitals awaiting discharge to aged care is a growing headache for hospitals, governments, and health insurers. Credit: Marija Ercegovac
A shortage of residential care beds and a rise in neurocognitive disorders and mental health conditions including dementia, delirium and depressive disorders are driving long and expensive hospital stays for patients over 65, the analysis by peak body Private Healthcare Australia (PHA) suggests.
Health insurers, alarmed by the trend, have joined state and territory governments in urging the federal government to find a long-term solution to aged care access issues which have compounded bed block across the country’s health system.
“It doesn’t matter whether it’s a state government with public hospitals, or private health insurers, or veterans affairs – this is a problem throughout the whole sector,” said PHA chief executive Rachel David.
David said addressing the rising cost of aged care places, increasing the workforce, and new approaches such as transitioning patients from hospitals into “step-down” hotel rooms, could help alleviate pressure on the health system.
“I’m not sure that simply more money is going to fix it,” she said. “We do not have sufficient numbers of people to care for the number of people who are coming through into aged care, and the actual places are becoming increasingly expensive.”
Australian health funds paid out $16.6 million last financial year to hospitals caring for patients receiving non-acute care while awaiting discharge to aged care. This is more than double the $7.3 million paid out in 2018-19, the last full financial year before the COVID-19 pandemic.
The number of older patients waiting in hospital for discharge to aged care jumped from 3363 to 4545 in the same period, a 35 per cent increase. The average cost to the insurer jumped 66 per cent to $3647, partly due to a six-day increase in the average length of stay.
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University of NSW Adjunct Professor Kathy Eagar said the bed block issue would continue to put pressure on health insurance premiums without government intervention.
“This is further evidence that this is not only going to be impacting on state budgets, it’s going to be impacting on private health insurance payouts, and therefore how much we all have to pay for private health cover,” Eagar said. “The idea that this is an old person’s problem is wrong. This is now a community wide issue.”
In 2024, the number of private health insurance claims exceeding $10,000 for people over 65 with neurocognitive and mental health conditions rose by 13 per cent. One in 10 of these patients had dementia, and one-third had depressive disorders.
The highest private health insurance claim in 2024 was from a patient in her 70s who needed a mitral valve replacement costing $697,267.
Other costly claims included a $621,723 treatment for a patient with a kidney infection, $486,479 for an extremely premature birth, and $355,760 for a patient with a viral herpes infection.
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