Savings the aim in medihotel push

The state government has rejected criticism of the cost and projected savings of its flagship medihotel healthcare policy, after work began on the construction of the first facility earlier this month.

Labor won government in the March state election promising to build three medihotel facilities, effectively specialist hotels for hospital outpatients, with the plan to reduce demand for existing hospital beds.

The first facility, a $40 million medihotel next to Fiona Stanley Hospital in Murdoch, is to be built and operated by private businesses Fini Group and Aegis Aged Care Group.

The 60-bed facility will open in 2021.

Fini Group will build an aged care facility, super medical clinic, apartments and commercial space at the precinct.

Other medihotels are to be built at Royal Perth Hospital and Joondalup Hospital.

Health Minister Roger Cook has offered up some initial numbers showing the anticipated benefits of the projects, with hospital beds costing between $1,800 and $3,000 per night, while the medihotel operation would cost between $120 and $200.

But the opposition has raised questions about the savings, with shadow health minister Bill Marmion calling them “ludicrous claims”.

It has cited the Victorian experience to cast doubt on Labor’s proposal for WA, claiming that of 11 medihotels built in Victoria, only four are still in operation.

Many of those beds had been built using space in existing hospital wings or had replaced acute care facilities, the opposition says.

According to a 2006 report by the Victorian Department of Human Services and cited by Mr Marmion, the costs at the facilities varied widely, from $70 per patient per day to nearly $450/day.

All up, the report estimated savings of $1.5 million per year across all the medihotels operating at the time in Victoria, with the savings coming from medihotel beds replacing existing hospital places.

Those figures don’t take into account the capital cost of building the facilities.

Mr Marmion said the report showed that modest savings could only be achieved if existing beds were closed.

Health Minister Roger Cook acknowledged to Business News that the state had not done any detailed cost modelling, but expressed confidence that the program would work based on lessons from other jurisdictions.

“We will be taking on board the lessons learned from around the world to make sure our medihotel policy supports the needs of patients,” Mr Cook said.

“While a hotel may cost hundreds (of dollars) per night, a hospital bed costs thousands.

“It stands to reason that medihotels have the potential to be more comfortable for patients, free-up hospital beds and save the state money.

“Our first medihotel at Fiona Stanley Hospital will help inform the models we implement elsewhere in the state.”