Tens of thousands of Victorian patients are using their health insurance in public hospitals without any guarantee it will get them faster care, a choice of doctor or a private room.
And some people are getting stung by unexpected bills for more than $1000, an insurer says.
New data shows the number of patients using their insurance in Victoria's biggest public hospitals has been creeping up for the past three years to reach an expected rate of about 15 per cent this financial year.
Public hospitals regularly ask patients if they want to use their health insurance because it gives the hospital a financial boost compared to the government funding it receives for a public patient.
The Victorian government says patients who opt to use their insurance are not guaranteed any special treatment, but may receive a doctor of their choice. Many hospitals say they cover people's out of pocket costs for using their insurance to remove any disincentive.
The practice, allowed under the government's national health funding agreement, angers private hospitals because it cuts into their market share, and insurers say it is pushing up premiums. Last year, insurers paid more than $1 billion to public hospitals.
The Victorian government's 2016-17 funding agreements with hospitals shows about one in three patients at Peter MacCallum Cancer Centre are expected to use their insurance there this year. The hospital is followed by the Eye and Ear Hospital with 27 per cent "private" activity, and the Royal Children's Hospital with 24 per cent expected.
While patients are effectively drawing on their insurance to pay for care they would otherwise receive for free courtesy of taxpayers, insurers say some patients get nasty surprises.
Chief benefits officer for insurer HCF, Cindy Shay, said a survey of 35,000 members over three years found 14 per cent – or nearly 5000 people – said they faced unexpected costs ranging from $200 to $1000, and 20 per cent of these people said they faced costs over $1000.
Sixty per cent of people did not receive their choice of doctor in a public hospital, and only 20 per cent got a single room, Ms Shay said.
Peter Mac's top ranking for "private patients" comes after the Victorian Labor government scrapped plans for "Peter Mac Private" – a 42 bed private hospital that was set to occupy the 13th floor of the $1 billion Victorian Comprehensive Cancer Centre.
In 2015, Health Minister Jill Hennessy said a private floor was inconsistent with the "heart and soul" of the project which would serve "all" Victorians, indicating a philosophical stance against a private hospital on site, even though profits were set to go back to the public hospital.
Opposition health spokeswoman Mary Wooldridge said this was hypocritical, given one-third of the hospital's patients were now "private", and said "Daniel Andrews must reverse his arrogant and ideological decision".
A spokeswoman for Ms Hennessy declined to say whether there was any evidence of queue jumping for patients using their insurance in public hospitals, and she said the government would not change its mind on a private hospital at Peter MacCallum Cancer Centre.
