JOHN MENADUE. Medical specialists – high fees and poor accountability.

Feb 22, 2017

So much of the public attention is on care in general practice, but specialist healthcare has some very serious problems. The first is excessive remuneration of many specialists. In some cases it could only be described as greed. The second is the lack of accountability for care by many specialists and the unwillingness of their organisations to tackle the problem. 


Specialists in Australia, on average, earn about twice as much as GPs. Survey data shows that average earnings of GPs in 2012 was $194,000. For specialists, it was $360,000.

In July-September last year, the bulk billing rate for general practitioners was 84%. For specialists it was a meagre 30%. At the bottom of the range for specialists who bulk bill were anaesthetists at 10%. For obstetricians it was 55%.

Many specialists have taken the opportunity through gap insurance provided by private health insurance funds to dramatically increase their fees. In this blog, Lesley Russell in
The impact of private health insurance on equity and access in specialist healthcare’, outlined some particular cases of fee gouging.

  • For orthopaedics, the average cost in 2014 for hip replacements was $27,310. But it varied from $18,309 to $61,699.
  • For endoscopic prostate procedures in 2014, out of pocket surgery costs averaged $2,802 in the ACT but only $183 in SA.
  • The Medicare scheduled fee for prostate surgery is just under $1,500, yet out of pocket costs for robotic assisted surgery in this field is as high as $10,810.
  • BUPA, who admit that they can’t control costs, found that 17% of radical prostatectomies were fully covered by Medicare, but 28% had gap fees of between $5,000 and $10,000.
  • In 2015 the President of the Urological Society of Australia and New Zealand spoke out about unreasonable costs for prostate surgery. He called for the society’s members to ‘refresh their awareness of their ethical responsibilities’.
  • Last year, the President of the Royal Australian College of Surgeons stated that ‘RACS cannot stand by if members are charging fees that cannot be justified as reasonable … There is no correlation between the size of fee charged and the quality of the surgery.’

Not surprisingly in all this, there are a whole range of specialists who charge fees that cannot be justified. They are having a field day at the expense of the public.

Data from the Australian Tax Office published in the SMH on October 5, 2016, also show the very high remuneration of medical specialists. On ATO figures in 2013-14, the top professionals were all medical specialists with neurosurgeons top of the list with an average annual income of $578,000, followed by ophthalmologists on $553,000. This was followed by a long range of specialists – cardiologists ($453,000), plastic and reconstructive surgeons ($449,000) and so on. Of the top 20 earning professions in Australia, 18 were medical specialists.

There is little sign that the Australian government, or the opposition, is considering ways to redress specialist fee exploitation. Many specialists indicate clearly that they are unable or unwilling to charge reasonably for their services.

One way that could be considered is for Medicare and perhaps even private health insurance funds, to refuse to pay Medicare/PHI benefits if the fee is in excess of the recommended fee. This might be one means to force specialists to be responsive to the interests of patients and the Australian taxpayer. At present, the Australian taxpayer through Medicare is underwriting this fee gouging.


In addition to the question of fee gouging, there is also concern about the ‘closed shop’ or ‘old boys’ culture’ of many specialists associations. There is evidence that these associations are not addressing poor quality of care within their professions. One striking example of this lack of accountability was outlined by a speech in 2015 by Judge Geoffrey Davies to 1,200 orthopaedic surgeons in Brisbane. Judge Davies had headed the 2005 enquiry into the Bundaberg surgeon, Jayant Patel.

Extracts from the transcript of the speech by Judge Davies follow:

Why won’t you do something about incompetent surgeons?

The Hon Geoffrey Davies AO

You all know that, in your midst, there are incompetent surgeons; surgeons whom you would never recommend to your friends or family. They may have varying degrees of incompetence and for different reasons. But all are a danger. All can cause injury.

Together you know who many of them are. But for various reasons you have done little individually and nothing collectively, to expose them or even to identify them confidentially for the purpose of retraining or limitation of practice.

Patients are entitled to know, before they choose you for their surgery, rather than one of your competitors, not only how your fees compare with those of your competitors, but also how your success rate compares with that of your competitors; and that that latter information, in the case of much orthopaedic surgery, is recorded in your National Joint Replacement Registry.

Why would surgeons who are otherwise honest and decent men and women and who are themselves competent, fail to speak out against what was plainly gross incompetence causing harm? The author of the Bristol Inquiry report described it as an “old boys’ culture”. But that is simply a euphemism. The true reason must surely be either a view that the reputation of your profession is more important than the health and safety of patients; or a view that the incompetence of your colleagues is none of your business. It can’t surely be a misplaced loyalty to your incompetent colleagues. It wasn’t in Bundaberg because none of the other doctors there really liked Dr Patel.

If, individually, you don’t speak out, patients may be injured, possibly seriously.

As you are aware, following my Inquiry, there is now a mandatory requirement that you notify the Health Ombudsman if you have a reasonable belief that another health professional has behaved in a way which constitutes a significant departure from accepted professional standards; and that such behaviour has placed the public at risk of harm. You do not appear to have responded to this obligation notwithstanding the freedom which it confers from any legal or administrative action. And the legislation invites you to notify in respect of less serious incompetence and, if you do, also offers you full protection against legal or administrative action provided your notification is made honestly.

If, in those circumstances, you as individual surgeons will not act to protect the public from your incompetent colleagues, I have come to wonder how likely it is that your association or any other specialist association is ever likely to do so. However, as I shall point out, there are a number of ways in which it can and should do so.

Surgeons who are the subject of multiple complaints Studies in 2006 in New Zealand and the United Kingdom both show a close correlation between complaints and preventable adverse events :

-Two thirds of complainants had experienced adverse events; and
-75% of those adverse events were preventable.

And a study in 2012 of nearly 19,000 formal health care complaints against doctors, including surgeons, in Australia between 2000 and 2011 showed that two prior complaints over eleven years was a strong predictor of short term further complaints. It found that:

– compared with doctors with one prior complaint over that period, those with two complaints had nearly double the risk of recurrence;
– that risk increased substantially with each additional complaint.
– and these, in turn, showed that complaint prone doctors could be identified early in their complaints trajectory.

Together these studies show, in my view, a strong likelihood that those surgeons who have had, for example, two or more complaints within an eleven year period are incompetent.

Evidence (also) show that incompetent surgeons are much more likely to be found among older surgeons than among surgeons in early or mid-career.

There are three conclusions that can be reached from this evidence. The first is that the proportion of incompetent surgeons is likely to be greater in the older age group than in the mid-career group. The second is that this conclusion is not generally recognised or, at least, admitted within your profession. And the third is that there needs to be much greater scrutiny, than there is at present, of the performance of older surgeons, partly for these reasons, but partly also because there is likely to be much greater resistance, in your profession, to complaining about a once competent surgeon who is no longer so than there is about a younger incompetent surgeon.

Individual notifications under the Legislation, like complaints by patients, can never uncover more than a small percentage of the total number of incompetent surgeons. That is why the primary responsibility for uncovering and dealing with incompetent surgeons must be upon those who can establish a system for such objective assessment.

The view that the best way of determining competence is by assessment of actual operations appears to be rejected by you in a number of ways.

First, you appear to ignore the fact that multiple complaints against a surgeon probably prove a pattern of incompetence.

Secondly, you will not make participation in morbidity audits compulsory notwithstanding the overwhelming evidence of the benefit of such participation.

Thirdly, you will not permit audits of either kind to identify and record the name of a surgeon the subject of adverse events notwithstanding the evidence that this would enable determination of a pattern of incompetence.

And fourthly, you will not permit the NJRR to be used for this purpose notwithstanding that, as I believe, it can do so. If I am correct in that belief, I think that you have been acting improperly in failing to use it for that purpose. In saying that I appreciate that surgeons have been contributing data to the NJRR on the promise of anonymity. But that could and should have been changed before now.

I cannot see how the imposition of a fine or suspension from practice for a period can, alone, be an appropriate remedy for incompetence. The surgeon should be retrained if that is possible. But in many cases, especially those of older surgeons, that will not be possible. In that case he must have his practice limited to exclude operations of the kind which he cannot safely perform or he must be prevented from practising. Suspension from practice, in whole or in part, is appropriate only while decisions are pending about retraining or limitation or ceasing practice.

Why you won’t do something about incompetent surgeons?

I regret to say that my answer to this question is not one which you will like. Yet all of the evidence that I have seen convinces me that I am right.

What then is the answer to my question? I think that there are two.

The first involves how you think and act individually.

Many of you are concerned that disclosure of your own success rate or, more accurately, your failure rate might increase your risk of being sued. But realistically that is a risk for only a small minority whom you should want to see dealt with, for the health and safety of future patients.

Many of you are also concerned that reporting another surgeon whom you believe is incompetent may rebound on you. I have said that I understand that. But that concern does not excuse you, particularly given the protection which the law now gives you.

The second involves how you think and act collectively, as the Australian Orthopaedic Association.

Collectively you are, it seems to me, still primarily a trade union having the primary purpose of looking after the wellbeing of orthopaedic surgeons. And sadly you appear, so far, to have put that before the health and safety of patients.

To change that you must make participation in morbidity audits compulsory for your members. You must require the recording of the names of surgeons involved in adverse events. You must use the results of these, and the results of complaints records to identify incompetent surgeons.

And you must use the NJRR for this purpose.

When I spoke at your annual conference in Adelaide four years ago I was still optimistic that you might, individually and collectively, do something about this serious problem. Despite your inaction since then, I remain optimistic. But time and public confidence are running out. 

Surely a federal parliamentary enquiry into the performance of medical specialists in regard to fees and accountability is long overdue. Many of them are having a lend of us!

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