This article looks at key changes impacting on private hospital care: the increasing corporate ownership of private hospitals; the Commonwealth Government's support for private health;the significant increase in health fund membership; and the contracting arrangements between health funds and private hospitals. The changes highlight the often conflicting interests of hospitals, doctors, Government, health funds and patients in the provision of private hospital care. These conflicts surfaced in the debate around allegations of 'cherry picking' by private hospitals of more profitable patients. This is also a good illustration of the increasing entanglement of the Government in the fortunes of the private health industry.