JOHN MENADUE. The Pandora’s box of excessive medical specialists fees! An update and repost from April 19 2017

‘Perhaps [we could consider] a review of what Pierre Trudeau and his government (in Canada) did in 1984 when they took on a system not dissimilar to ours – uncontrolled fee for service – and legislated that doctors could charge what they liked BUT unless they adhered to the fee negotiated between the provincial government and the profession (on an annual basis) the doctor lost all access to a Medicare reimbursement. The system still works today in Canada and few doctors opt out of it. Now there is a thought and a significant game-changer.’ 

Specialists

In my blog of 22 February 2017 ‘Medical specialists – high fees and poor accountability’, I outlined what Adjunct Associate Professor Lesley Russell and others have said about excessive charging by specialists . That article included statements by the President of the Urological Society and the President of the Royal Australian College of Surgeons about the ethical responsibility of members charging fees that could not be justified. I add to that list

  • In The Conversation and in this blog on 7 August 2014 Peter Sivey ,Senior Lecturer, School of Economics, La Trobe University said ‘GP care is not the problem, costly specialist care is.’
  • Dr Rachel David, the CEO of Private Healthcare Australia, said in February last year that ‘Private health funds have no control over input costs, which include medical device benefits, hospital accommodation costs, allied health costs e.g. dental, medical specialist gap costs, among others.’ That statement says much about the power of providers and the inability of private health insurance to control costs.
  • In the Medical Observer of 5 April 2017 the AMA President took a ‘swipe’ at ‘celebrity specialists’ who are known for ‘billing eye-popping figures’. The same article noted that in a survey of 2015 data, endocrinologists, immunologists and rheumatologists charged up to $300 for initial consultations. I know of surgeons who charge $300 for a short initial consultation.
  • According to the Australian Tax Office, the twelve highest paid jobs in Australia in 2013/14 were all medical specialists, both male and female ranging from $577,674 for neuro surgeons to $383,880 for dermatologists. That top twelve earning groups included anaesthetists at $370,492. CEO’s and Managing Directors as a group were well down the list
  • Specialists earn about twice as much as GPs and not surprisingly, the proportion of GPs in the medical workforce is declining rapidly.
  • A recent article by T. Hoffman in the Australian Doctor revealed that the top four earners amongst medical specialists in 2013 were orthopaedic surgeons $250 per hour, radiologists $235 p.h., ENT specialists $200 p.h. , and anaesthetists $190 p.h. GPs were near the bottom of the list at $100 p.h.
  • Lesley Russell in The Conversation on March 7, 2017, said ‘For Australia, specialist compensation was a shocking 7.6 times the average national income, higher than any other country, including the US (5.7), Canada (5.1) and the UK (4.9). In contrast, Australian GP compensation was 2.8 times the average national income, lower than the US (4.1), Canada (3.4) and the UK (3.9). … The trends are likely to have worsened rather than improved over time. This is supported by a recent (2016) data from the ATO showing medical specialists are the highest paid professionals in Australia.’(A 2007 US study)
  • Out of pocket costs in Australia are higher than almost every OECD country. Specialist medical fees are a large contributor to our high OOP costs.

There is strong evidence that specialists as a group are overcharging, even though, many specialists are responsible and act ethically and reasonably. Many even bulk bill!

Anaesthetists 

I have done some checking on the article of David Scott and Peter Seal, the President and Vice President of the Australian Society of Anaesthetists ‘Medical specialists – maintaining a high standard and duty of care’. It was posted yesterday (18 April 2017).

They say that ‘The most salient fact about patient billing by anaesthetists by far is that about 76% of anaesthetist services attract absolutely no gap, which means precisely zero dollars out of pocket for the patient.’ That occurs only if the patient has private health insurance, which is very largely benefits the more wealthy. Since 2001, or thereabouts, when private health insurance (PHI) introduced their gap cover or no-gap products, anaesthetists have rarely if ever charged the scheduled fee. With virtually all anaesthetist services provided within hospitals, private health insurance covers anaesthetist services up to the MBS fee and well beyond, unlike GPs where out of hospital services are only rebated at 85% of the scheduled fee and with no private health insurance coverage, e.g. for anaesthetists HCF currently rebates at approximately $34.70 per unit compared with the MBS rebate of $19.80 per unit, i.e. approximately 75% above the scheduled fee.

When gap cover arrangements were introduced by PHI, anaesthetists must have thought all the Christmases had come at once – a sudden increase in income, no bad debts and no need to even discuss fees for those with PHI coverage.

No anaesthetist would now bother to bulk bill or even charge the scheduled fee if the extra fee is guaranteed by PHI and it is rare these days to have an uninsured or self-insured patient in a private hospital/billing setting.

PHI has been captured by anaesthetists and what a bonanza it has been for them. The $11 billion taxpayer subsidy to PHI is directly responsible for the fee-gouging by some specialists.

Scott and Seal also maintain that ‘There is no recommended fee’ for anaesthetists. That is misleading. It is common knowledge amongst anaesthetists that I have spoken to that many of them use the AMA fee as a ‘recommended fee’ when their fees are challenged. Many charge at the AMA recommended fee which is extremely high.

If the MBS figure were more reasonable, perhaps there would be less need to ‘top up’ with PHI products. Furthermore, with technology changing in such fields as endoscopies, I am advised that it is now possible with high volume procedures for anaesthetists to earn hundreds of dollars per hour just with the MBS rebate, not including the PHI top up.

Scott and Seal also contend that in assessing anaesthetists’ income ‘it is necessary to take into account, as with other medical specialists who have undertaken many years training in a complex discipline, anaesthetists too are taxpayers, employers and small business owners and often pay sizeable running costs, including indemnity insurance’.

They may be right on indemnity insurance, but my advice is that the general running costs of anaesthetists are quite low. I have yet to meet an anaesthetist in a consulting room. Contact has usually been a limited introduction when lying on the hospital bed.

Most anaesthetists’ costs are low reflecting billing, banking and perhaps a shared receptionist. I checked and was told that in a relatively prosperous and high fee paying area in Sydney, the average administrative costs of running an anaesthetists’ consulting rooms was about $1,000 per month. This is almost negligible compared with surgeons and others who run and staff a consulting based practice.

Then Scott and Seal take exception to my suggestion of a way to control specialist fees. I said

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 PHI 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.’

Given the high fees of some anaesthetists and other specialists, I was surprised to hear Scott and Seal say that ‘The suggestion of withholding of Medicare and PHI benefits is manifestly unheralded and egregiously unfair to patients, who will primarily be hurt.’ Their fees don’t suggest that fairness is a top priority.

Deliberately or otherwise, they miss the point. The suggestion is designed to help patients force lower fees and assist the taxpayer with lower costs. In his article in P & I, Professor Peter Brooks in ‘Physicians ‘outed’ on fees – time for patients to take more control’ said

‘Perhaps [we could consider] a review of what Pierre Trudeau and his government (in Canada) did in 1984 when they took on a system not dissimilar to ours – uncontrolled fee for service – and legislated that doctors could charge what they liked BUT unless they adhered to the fee negotiated between the provincial government and the profession (on an annual basis) the doctor lost all access to a Medicare reimbursement. The system still works today in Canada and few doctors opt out of it. Now there is a thought and a significant game-changer.’

Ministers are showing they are really powerless (or unwilling) to tackle the power of providers and particularly medical specialists.  GP’s and the public are easy game.

Why is the consumer forum as quiet as a mouse on this issue? Could it be that it is funded by the Commonwealth Government!

Readers might care to comment on their experience with fees charged by specialists.

PS. I recently saw quotes for a cataract operation…$2000 and $2500 per eye plus adds on  for the anaesthetist and more. That left quite a gap!  I was told that the operation takes 10-30 minutes for each eye.John Menadue

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4 Responses to JOHN MENADUE. The Pandora’s box of excessive medical specialists fees! An update and repost from April 19 2017

  1. Chris Harrington says:

    The Canadian system might work here but only after the cartel system of limiting the supply of specialists is broken up. The MBS rebate is increasingly an insignificant component of medical specialist’ (and some GP) income, and while the specialties have a stronghold on appointing only their own to the profession, it is unlikely to make them kowtow. Increase supply, independently of the professional bodies and newer generations may go for different business models.

  2. Nigel Drake says:

    “First, do no harm.”

    The fiscal and emotional disincentives to seek advanced medical, surgical and psychiatric services are “harm” at its most fundamental.

    Even excluding dental services from Medicare, resulting in oral diseases and their subsequent contribution to poor general health, is “harm”.

    Failure to provide basic income to those who are in need is also “harm”; often resulting in health attenuation due to inadequate nutrition as well as an incapacity to pay for the medical etc. services that even “poor” people need.

    Our current political climate is extremely “harmful” to the health of the whole of our community.

  3. Jim KABLE says:

    Just thinking of former AMA President Bruce SHEPHERD and imagining him suffering apoplexy at the very thought of the Canadian system. It cheered me no end. But yes, why cannot such a system be implemented here! It might even steer some away from medicine into a more worthwhile vocation/profession – teaching!

  4. Chris B says:

    In relation to the speech by Judge Davies in your earlier, linked post, from my experience the incompetent and dishonest specialists get put to work in the workers compensation system.
    There they get to screw over people that our society does not value.

    They also get paid a premium rate for which many are willing to say anything.

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