Maybe it’s time the federal government made it mandatory for specialists to upload their fees to Medical Costs Finder, so at least consumers know what they’re in for.
Out-of-pocket costs for private medical care have grown by 12% in the past year, up from an annual growth of 1% per year for the past nine years.
A new report from research firm Mandala, commissioned by Private Healthcare Australia, shows that consumers in the ACT were hit hardest in FY23, paying a median OOP fee of $591, $312 more than the national median of $240.
In NSW the median OOP fee was $279, and in Queensland it was $258.
Without reforms, by 2030 14% of people who need to see a specialist will be delaying accessing care, a number that jumps to 21% among 25 to 34-year-olds.
Of the $6.1 billion cost of private in-hospital medical services in FY2023, consumers paid 16% or $1.1 billion out of their own pockets, only 39% of which was via a known gap agreement.
“While most providers have agreements with private health insurers to charge no gap or a known gap to consumers (92% in FY23), there is a small portion who do not,” said the report.
“This 8% of providers are responsible for charging 61% or $700 million of the total gap paid.”
Consumers also face “invisible” out-of-pocket costs – payments not captured in official statistics as they fall into grey areas, including booking charges and administrative fees – a process known as “side-billing”, which in many cases is illegal, although poorly enforced.
In Tuesday night’s federal budget, the government committed $7 million to upgrade its Medical Costs Finder website, where consumers can see all specialists’ fees before proceeding with a consultation.
The MCF’s biggest weakness is that it is not mandatory, and so far less than 1% of specialists have uploaded their fees to the site.
Private health funds, via their peak body, the PHA, have called for greater transparency of specialists’ fees, as well as a “surprise billing” law to make sure patients are not liable for costs not properly disclosed to them before treatment.
“While most hospitals and specialist doctors have agreements with private health insurers to charge ‘no gap fees’ or ‘known gap fees’ to patients receiving hospital treatment (92% of providers in FY23), some do not,” said Dr Rachel David, CEO of PHA.
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“When you look more closely at that 8% of providers who don’t, we are seeing some big fees being charged for common procedures, particularly hip replacements, knee replacements, spinal surgery and weight-loss surgery.
“We urgently need more transparency of medical billing so consumers and their GPs can see a specialist doctor’s fees before choosing one, and we need to ensure consumers are provided with clear, easy to understand quotes for medical treatment so they don’t get surprised by unexpected fees during or after the process,” she said.
“Under no circumstances should fees be discussed with patients under duress, such as on the day of surgery, and informed financial consent should be provided well in advance of a planned procedure to give patients a chance to reflect on their decision and if unsatisfied, to choose another doctor.”
The Mandala report forecasts some dire consequences by 2030, if there are not significant reforms made to the system in the near future, including:
- consumers will be spending $1.6 billion on out-of-pocket medical costs in the private health system;
- the cost of a hip replacement will increase by nearly $1000 to a median out-of-pocket cost of $2374;
- 14% of people who need to see a specialist will delay or avoid care due to cost, which represents 1.25 million people delaying or avoiding seeing a specialist in 2030.
“Upgrading the Medical Costs Finder website is a great start, but we need to do more,” said Dr David.
“The distribution of medical specialists is not proportional to the population within each state and territory. After a long pathway to qualify as a specialist, many choose to work in affluent areas. This leads to a concentration of specialists in areas with a higher ability to pay, further driving up costs,” she said.
“Under Australian law, health insurers are not allowed to cover specialist doctor consultations if they do not occur during a hospital admission.
“While some countries such as France and Canada regulate doctors’ fees, the Australian government is prohibited by our constitution from regulating Australian doctors’ fees, which enables providers to set their own prices.
“This is a major issue for our population. Fifty-five per cent of Australians – 15 million people – are paying for private health insurance.
“These people are contributing to their own healthcare and taking pressure off our stressed public hospital system. They should not be facing skyrocketing costs and unexpected bills.”
Read the full Mandala report here.
