Nearly one in five patients admitted to public hospitals in 2015-16 were funded by their private insurer, according to the Australian Institute of Health and Welfare’s latest report, Private health insurance use in Australian hospitals.

Private patients waited an average of 21 days for elective surgery, compared to a median time of 59 days for public patients.

Health policy analyst Martyn Goddard said public hospitals used private health insurance to make up for “inadequate government funding”.

“Public hospitals are supposed to be free,” he said. 

“They’re supposed to be there for everyone who needs them on the basis of need, not wealth.”

Health Minister Michael Ferguson said use of private health insurance in public hospitals was a matter of personal choice.

“It is important to note that as a small state, some speciality services are only offered in public hospitals as there is not the critical mass to support private provision, which influences the rate of private patient use of the public hospital system.

“We will continue to work collaboratively with Tasmania’s private hospitals.”

Mr Goddard said the rate of privately insured patients at public hospitals in Tasmania had been increasing by about 7 per cent annually in the past decade, and 2.5 per cent in the last 12-month period of the report.

“The hospitals are doing this, not because they want to, but because they have to. They’re required to do it by the government.

"The reason this happens is that the government is not putting in enough money to make the hospital system run properly.”