Private hospitals

The Australian Government does not directly fund private hospitals in Australia – the private sector owns and runs them. The Minister for Health and Aged Care must declare a facility to be a private hospital. Find out how they receive funds and who can receive treatment.

What a private hospital is

A private hospital is one that:

  • is owned and run by the private sector, including both for-profit companies and not-for-profit organisations

  • is approved and licensed by the relevant state or territory government

  • must be declared to be a hospital by the Minister for Health and Aged Care under section 121-5 of the Private Health Insurance Act 2007 to receive private health insurer benefits.

A medical service or facility cannot just decide to call itself a hospital. For the minister to declare a facility to be a private hospital, the facility must apply and provide evidence to help the minister make a decision.

The relevant state or territory government must also give formal approval to license a facility as a private hospital.

Learn about the hospital declaration process and find out how to apply.

How private hospitals are funded

Private hospitals in Australia charge for their services, so they receive income from a range of funders, including:

  • private health insurers
  • patients – who pay out-of-pocket expenses not covered by their health insurance policy, and any excess payments based on their policy
  • the Australian Government through:
    • private health insurance rebates
    • the Department of Veterans’ Affairs
    • Medicare Benefits Schedule claims
  • state or territory governments when they contract private hospitals to deliver public hospital services.

Who can receive treatment in a private hospital

Anyone can receive treatment at a private hospital.

Most people who want treatment at a private hospital have private health insurance to help cover the costs.

You can still attend a private hospital without having private health insurance – you simply have to pay any costs not covered by Medicare yourself.

Where a state or territory government contracts a private hospital to deliver public hospital services, Medicare covers the costs for public patients at that hospital.

While treatment is not free, you can:

  • choose your doctor
  • choose your hospital
  • usually have a shorter waiting time for elective surgery.

If you are a public patient in a private hospital you will have the same rights as if you were in a public hospital.

Use the Medical Costs Finder app to find out what your out-of-pocket costs are likely to be.

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