Managing private medical practice in public hospitals

Expected to be tabled in June 2019


Objective To determine whether the Department of Health and Human Services (DHHS) and health service providers are effectively managing private practice to optimise outcomes for the health sector.

Issues In the Victorian public health system, clinicians have a ‘right of private practice’ (RoPP) as part of their terms and conditions of employment (enterprise bargaining agreement and individual contracts). RoPP intends to increase patient choice, supplement clinicians’ salary to attract and retain them in the public system, and bolster public hospital income.

The Commonwealth Government funds medical practitioners working in a private capacity through the Medical Benefits Scheme (MBS). This funding extends to medical practitioners exercising RoPP within public hospitals.

Despite local variation, there are two main RoPP models used in Victoria:

  • 100 per cent donation model—the clinician receives an additional salary in lieu of the MBS payment, while the health service retains the MBS payment and bears the costs of the practice
  • 100 per cent retention model—the clinician retains the MBS payment and pays a fee to the health service to access facilities and administrative support.

There is no accurate data on the number of medical practitioners using private practice, the number of patients treated and the cost or benefits to the system. Consultation with stakeholders indicates that the practice is extensive, but the effectiveness of the program in attracting and retaining clinicians and improving access and choice for patients is unknown.

This audit will examine whether the RoPP model is providing positive outcomes for Victorian public health services, including increased treatment.

Proposed agencies DHHS, a metropolitan tertiary health service, Latrobe Regional Hospital and Western Health.

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