PETER BROOKS. Mind the gap in doctors’ fees – it is all around us

John Thompson reminds us of the total lack of transparency in fees charged by doctors in Australia. Surgeon’s report shows the ineffectiveness of private health insurers to control health costs Posted on 07/05/2016 by John Menadue

So can we dissect this further. What is in a medical fee – well may you ask. When you go to your doctor you may see a fees schedule on the reception desk – or you may have received a letter from the receptionist / practice manager indicating that you will be responsible for certain fees over and above what you will get back from Medicare and ( possibily ) your Private Health Scheme . It is not unusual to be asked to pay something in advance before an appointment ( usually for a procedure – endoscopy ) is even made . Even lawyers don’t make you do that- do they . So there are at least three fees- what the Government pays the doctor – the Medicare fee , then there is the AMA rate – why this is different does not seem to be based on any scientific evidence , and then there is what the doctor actually charges you . Again not based on anything but what the doctor feels the market will support – and it usually does because effectively you have no choice .Do you ask for a second opinion ? do you have a discussion about the fee and why it is so much higher than the Medicare rebate or the AMA fee- when this person is going to put a new hip into you next week or open up your belly – I don’t think so .

These out of pocket expenses have been the subject of some debate over the past few years and have reached the point where even the Royal College of Surgeons has expressed its concerns. RACS pledges fee probe | Medical Journal of Australia

The Health insurance industry has recently made some forays into the transparency debate publishing data suggesting that some surgeons charge between $2000 and $10,000 for a prostatectomy when the Medicare Benefits Schedule item is $1935, and the AMA recommended fee is $4465 . Another example is the cost of knee replacements which can really only be described as greed on the part of some surgeons – the Medicare rebate is $1318, AMA fee $3690 and yet some surgeons are charging up to $5500.

Nib puts the heat on surgeons by exposing varied surgery fees

Interestingly the health insurance funds have all of the data on fees charged by doctors in Australia – but they feel constrained to release these data on privacy grounds – Oh for a Government that would require them to do so.

Out of pocket expenses have been the subject of much discussion over the past few years since it now makes up some $23 billion per annum and the most rapidly rising part of the health budget. The Grattan Institute provided an in-depth review last year ( and there was even a Senate enquiry – the Report of which makes interesting reading and is good lesson in obfuscation if nothing else ( Out-of-pocket costs in Australian healthcare – )

So let us look at two other examples of ‘Medical Fee Gaps’ that our health system creates

The first is the GAP between what GPs and non proceduralists earn in comparison to specialist proceduralists .The OECD report of 2013 ( OECD Health 2013 ) shows that Australia has the second widest gap between these 2 groups of all the OECD nations ( another silver medal for Australia !)

A recent article in Australian Doctor weekly demonstrates this clearly ( and I am not showing just because my discipline is Rheumatology ) .

Could this disparity in earning capacity be influencing in which specialties ( and remember general practice is a specialty )medical graduates decide to practice . Increasing HECS fee debts and other pressures of our consumer driven society I suggest are making it more difficult to recruit to general practice . (Click to enlarge)

Mind the gap

T Hoffman GPs languish at the bottom of earnings Aus Doc 8 April 2016

Now these are only median earnings per hour and the OECD report suggests that specialists earnings are on average at least $1 million per year while GPS take home around $250,000. Funny that we openly tell the world about the benefits of our health system ( and there are great benefits ) underpinned as it is by general practitioners – yet we only pay them a quarter of what we pay specialists !

Our final example is that of the recent deal on pathology bulk billing rates which the both the major parties have once again caved in to big business. Name me a pathologist who is a principal in one of the major pathology companies who is not on a 6 figure income or has not received very significant financial rewards over the last decade as these entities were privatised . These companies return a good dividend to shareholders ( and we should perhaps look at where those shareholders live ) The pathology companies pay little tax   ( Editor: Melissa SweetAuthor: Peter Brookson: January 07,

Now it seems that once again General practitioners are going to foot some of the bill for the rent deals that were announced last week . When are we going to stop robbing the poor to support the rich!

So here are three ways we might start to have a conversation in this country about how we remunerate doctors

  • Should we consider doing what Canada does – NOT allow doctors to charge over the Government rate for any medical procedure ( consultation / procedure ). Doctors can do so BUT they loose all access to Medicare!
  • Put out ALL pathology radiology services to open tender – Stephen Duckett suggested this last year yet there was little reaction – must mean it is worth looking at .
  • Should we consider a salaried service – there are now many more doctors in the USA on salaries than not and of course the NHS remain one of the best performing health systems globally despite its challenges One argument raised by those against salaried systems is that people don’t work as hard – given recent revelations that perhaps around 20-30 % of what we do in medicine is so called ‘low value care ‘ – i.e. it does not improve a patient outcome then perhaps having doctors – particularily proceduralist working less hard might be a very positive thing .

These issues are important – remember one of the basic tenants of medicine is Primum non nocere- first do no harm . Should this be extended to financial harm as well !!

Peter Brooks AM MD FRACP is a Professorial Fellow, Centre for Health Policy, School of Population and Global Health, Faculty of Medicine, Dentistry and Health Sciences, University of Melbourne.


John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

This entry was posted in Economy, Health, Politics, Uncategorized and tagged , , , . Bookmark the permalink.

For questions regarding our comment system please click here.
(Please note that we are unable to post comments on your behalf.)

1 Response to PETER BROOKS. Mind the gap in doctors’ fees – it is all around us

  1. Avatar Ian Webster says:

    Dear Peter,
    It is great to see your thoughtful contribution.
    Access to specialist services for many poor people is pretty well impossible unless you have a catastrophic illness or injury. In the areas in which I practice poor people have to pay upfront fees they can ill-afford for seeing gynaecologists, rheumatologists, specialist surgeons, psychiatrists (although there has been some improvement with access through teleconferencing) – the list could go on.
    When you and I trained in medicine there were public outpatient clinics – in general medicine, general surgery and a range of specialist clinics. Indeed one of the sought after positions for specialists at that time was to be appointed an out-patient physician or surgeon – on the pathway to an in-patient appointment. You and I learnt our clinical skills in these environments.
    This all stopped, certainly in NSW, when the original Medibank (Medicare) was established by the Whitlam Government. The unbelievable hostility of organised medicine to universal health insurance led to specialists deciding that patients could see them in their ‘private rooms” rather than at the public hospital. This continues today.
    Some of my colleagues who believe in public medicine have continued to provide public out-patient clinics but it is a small but dedicated group.
    The fact that there are no public out-patient clinics or their equivalents in, say, a community health centre/clinic means that working and unemployed poor people miss out on early treatment and end up with late stage presentations. And if, perchance, the patient has several comorbidities, as is so often the case, the likelihood of getting treatment falls away precipitously.
    Another consequence is that EDs become one of the few avenues of access to a public hospital’s services in outer urban and rural settings.
    It will be said that in the old OP clinics patients wasted time waiting to be seen; probably true, but better to wait to be seen than not to be seen at all. But it is possible to better organise and manage public OP and specialist services for those who need them.
    Thanks for your work on out-of-pocket expenses.
    Ian Webster

Comments are closed.