PETER BROOKS. Government’s new out-of-pocket medical costs website – a missed opportunity

Feb 3, 2020

The long-awaited Australian Department of Health website designed to provide Australians with information on specialist medical costs, which went ‘live’ on 30 December 2019, is (so far at least) a significant missed opportunity.

It is also arguably a departure from the level of transparency promised by the Federal Health Minister in early 2019. Individual doctors’ fees and estimated out-of-pocket expenses are not provided (only averages and ranges are shown), leaving meaningful fee comparison difficult and opaque.

One of the main objectives of the new website – Medical Costs Finder – was to provide better information to the public about the substantial and growing “out-of-pocket” costs of healthcare in Australia. Such out-of-pocket costs have long been recognised as placing a significant financial burden on many Australians, particularly those on lower incomes, and can prevent some from seeking the care they need.

The Federal Health Minister announced in early March 2019 that the Australian Government would fund the development of a national website to “provide the public with greater access to information about the costs of specialist services”. He noted that “Specialists will…be expected to show their fees…on the website to enable patients and GPs to consider costs when determining their choice of specialists”.

The Minister’s announcement followed the government’s release of the findings of a Ministerial task force to examine ways of addressing the issue of exorbitant out-of-pocket medical costs – a task force which had issued its Report to Government in November 2018.

Melbourne University Professor Anthony Scott and I co-authored an article about the issue in The Conversation in March 2019, and concluded that we needed more than a website to stop Australians paying exorbitant out-of-pocket health costs.

As reported in the SMH a few days before the new website went live, the site lacks key details that were initially promised by the Health Minister, including individual specialists’ fees and a means for patients to determine their out-of-pocket costs from particular doctors. Instead, it gives an average cost of a range of procedures, and fails to detail how much each health fund will pay towards each procedure.

Gino Pecoraro, National Association of Specialist Obstetricians and Gynaecologists, is quoted in the above SMH article as saying of the hundreds of doctors in the field he had spoken to about the website over the previous nine months, that “not one” had indicated a willingness to publish their fees. “Why would they?”, he said, “It’s just designed to make doctors look bad, when the reason for out-of-pocket costs is that Medicare rebates have not been indexed to keep up with rising costs”.

An earlier article in the SMH indicated that between 2012-2013 and 2018-2019, the average out of pocket fee for a non-bulk-billed specialist visit rose by 46%, set against the CPI increase of 14.3% over that period.

Concerns over out-of-pocket medical expenses in Australia have been voiced for at least a decade by groups such as the Grattan Institute, who have called for doctors’ fees to be not just transparent but also fair and reasonable.

A March 2017 article in the MJA, focusing on the issue of significant variations in the costs of surgery, makes the point that transparency and accountability are key to achieving affordability of healthcare. It calls for fees to be reasonable and in line with the skill, effort and risks associated with the care provided. Specifically, it cautions that “Surgeons should not take advantage of the vulnerability of their patients”.

The stresses caused to the Australian Healthcare System by rampant out-of-pocket medical expenses are significant and pernicious:

· Specialist renumeration in Australia is amongst the highest of all OECD countries;

· There are very significant differentials (on average) between what we pay specialists and GPs. That is surely one of the reasons why more medical graduates are opting for specialist training rather than general practice – just when the conditions for which specialist care is sought can often be treated by your GP in consultation with a specialist;

· High out-of-pocket expenses have an impact on the private health insurance market, and it is hard to believe that this does not influence patients in their decisions as to whether to continue private health cover.

What then is provided by the new Medical Costs Finder website? It does at least provide a reasonably simple guide to the very “complex system” we health professionals and the health industry have created. It raises issues about what you should ask your doctor about the costs they propose to charge you, and refers to the importance of “informed financial consent”, but it begs the question of whether such consent should be made mandatory.

Should it be routine to get 2 or 3 signed quotes if one is having a simple hip or knee replacement? You would be unwise not to do this if you were getting an extension on your house – so why not for major surgical reconstruction!

The issue of patient engagement in these conversations about fees they are to be charged by their doctor is very difficult for them, as there is a significant difference in “power” between patient and health professional, and these conversations often occur during a stressful time in a patient’s journey.

Perhaps we need a new breed of health professional (a healthcare “navigator” with financial acumen) who might proffer information, advice and perhaps even negotiate with health service providers and patients – to get the best deal for the patient.

The growing medical out-of-pocket cost issue has not been satisfactorily addressed by the government’s new Medical Costs Finder website. That said, it will be interesting to see how the medical profession – and more importantly the community at large – responds to this initiative.

The bigger question is whether an uncapped, fee-for-service system is really fit for purpose in today’s Australia. Is it satisfactory to be without effective regulatory controls on what healthcare professionals charge, and for market forces alone to dictate something as vital as the cost of healthcare? The rising cost of such care in Australia surely demands a serious conversation about these questions, with all interested stakeholders.

Peter Brooks,AMFRACP MD, is Honorary Professor at Melbourne University’s Melbourne School of Population and Global Health

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