News
24 October, 2025
New data shows growth in private mental health care
DATA on private hospital licenses and expansions shows Australia’s private mental health sector is continuing to expand.
The publicly available data shows more mental health beds have opened in new private mental health hospitals over the past five years than were lost in standalone mental health hospital closures.
Several hospitals have also been redeveloped to include extra private mental health beds, and two new mental health hospitals are currently under construction.
The data shows, although seven dedicated private mental health hospitals have closed over the past five years, seven new facilities have opened.
These new hospitals collectively provide around 316 new beds, compared to about 267 beds lost through known closures.
Existing hospitals have also expanded significantly including Belmont Private Hospital in QLD (20 per cent capacity increase to 185 beds).
Two further purpose-built private mental health hospitals in Southport QLD and Adelaide SA are currently under development and due to open by 2027.
CEO of Private Healthcare Australia, Dr Rachel David, said while every closure of a mental health facility was concerning for patients and their families who had used its services, the sector was growing with more modern patient-centred services proliferating.
“It’s important the public understands the full picture,” she said.
“Australia’s private mental health sector is not shrinking. In fact, it is modernising and expanding to meet changing consumer demand and new models of care designed by mental health experts.
“Psychiatrists are increasingly choosing to treat people in the community or at home because that’s where patients prefer to recover, and where outcomes are often better. Hospital care will always be essential for some, but more people are receiving care outside of hospitals nowadays.”
Dr David said health insurers are paying out more claims than ever for mental health care, which is consistent with this growth.
The Government’s latest Hospital Casemix Protocol (HCP) data shows health insurers paid 6 per cent more for hospital based mental healthcare in 2023-24, compared to the previous year.
“The system is by no means perfect and is facing major challenges,” she said.
“We have a mental health workforce shortage, and some psychiatrists are charging very high fees for appointments in the community, which is a major barrier to people receiving treatment.
Dr David added regional Australia health workforce shortages are most acutely felt and are impacting the viability of private mental health services.
“The Federal Government is working with the private health sector on these issues,” she said.
