PETER BROOKS. Specialists gaps and anaesthetists.

Apr 20, 2017

The article from David Scott and Peter Seal (‘Medical specialists – maintaining a high standard and duty of care‘) is not an unexpected response from the organisation they represent – the Royal Australian and New Zealand College of Anaesthetists. However one is minded of those words of Adam Smith who said of ‘craft ‘ groups “ People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends a conspiracy against the public, or in some contrivance to raise prices.”  

Their arguments would hold more water (gas) if the origins of these ‘data’ were revealed because a quick ‘trawl of websites (searching- anaesthetic fees Australia) reveals a very different picture than that painted by the College   -that “The most salient fact about patient billing by anaesthetists by far is that 76% of anaesthesia services attract absolutely no gap, which means precisely zero dollars out-of-pocket for the patient. ‘No gap’ simply becomes the bulk billing equivalent option for anaesthetists, and many other specialists. Another 14% of episodes of anaesthesia care have a ‘known gap’ charge, in which informed financial consent (IFC) is mandatory. This means that 90% of anaesthesia services are either no gap or known gap. When an out-of-pocket cost is charged for an anaesthetic service, this averages $85. Almost all anaesthetists forewarn their patients of any gap payments with the appropriate IFC requirement. Thus of course anaesthesia has a very low level of bulk billing, because it doesn’t match the above definitions.”(Scott and Seal)

The important issue here ( and I am taking the perspective of the patient in this new era of patient centred/ focused health care) is surely whether the patient has to pay out of their own pocket. Call it what you will – gap payment , bulk bill don’t obfuscate ! From the learned College says it seems as if there is a ‘gap’ , then there is a ‘known gap’ and in some cases ( perhaps most cases ) an ‘unknown gap’- if you wake up !

So to the WWW -why does this large anaesthetic group comment “It is not uncommon for the rebates provided by Medicare and the Private Health Funds to fall short of the total fee charged by the Anaesthetist. The difference between these fees causes a “gap”, and is an out-of-pocket expense that is met by the patient. There are a variety of reasons why this gap has grown over the past few decades, but the major reason is inadequate indexation of the Medicare (and consequently health fund) rebates over a prolonged period of time. Many anaesthetists will offer discounted fees in order to reduce the out of pocket expenses for Australian government pensioners. Please discuss this with our rooms if you feel that you are eligible for consideration of this.”

Or a revealing website – which makes some interesting points about the AMA rates

  • “The list of services closely matches the services listed in the Medical Benefits Schedule (MBS, or Medicare), but the values allocated to those services are often different to the value that the government has placed on them.
  • To arrive at the figure of an appropriate value for the service, the AMA and its relevant subcommittees (such as the Australian Society of Anaesthetists, or ASA) take into account factors such as:
  • The “market price” of professional services, such as the cost of services provided by other professions, for example lawyers, accountants, electricians, and dentists

.Though the author does state “ I am unable to reveal the price that the AMA currently values one “basic unit”, as it is considered confidential intellectual property of the AMA. I can say that it is more than four times the price that Medicare values one “basic unit”.

If this is confidential information then how can patients –or doctors for that matter make any sense of the fees or be able to have a debate about the ‘market place ‘ – it is a nonsense”

On one hand, this sounds a bit like “doctors setting fees for doctors”, and that there may be a conflict of interest in this.  It would be fantastic if a truly independent body could take over the task of creating and updating the AMA schedule, but the fact is that the AMA is the only body with the expertise and the motivation to create this schedule.  Other bodies that may be motivated to create a similar schedule, for example the federal government and the private health insurers, also have a conflict of interest.  They have a financial incentive to allocate lower values to the respective services than their true value, as the higher the value they allocate for them, the more they will need to pay when somebody uses them.”

Now this is a good suggestion – at least it would be transparent and while the AMA may have the motivation – it certainly is not the only group with expertise in fee setting – though it does do it is spades!

Another website (and these were all accessed in less than 5 minutes) “Anaesthetic fees are determined by both the complexity of the surgical procedure, wellbeing of the patient and the time taken.  Medicare rebates for anaesthesia are low and do not adequately compensate for the high level of responsibility and length of training required.”

Or another example (

“Medicare and health fund rebates generally do not cover the full costs of private practitioner fees. For most procedures there will be an “out of pocket” expense or “gap” which you will be required to pay.

Anaesthetic fees are made of item numbers reflecting the pre-anaesthetic consultation, the anaesthesia required for your particular procedure, the time taken from the start to the finish of your anaesthesia and any extra items related to your condition. Each doctor sets their own fees and billing policies and it is important that you ensure you understand the costs involved.”

Now I could go on and on but what is clear the statement from the RANZCA bears no relationship to what is reality. If as they say 76% of fees attract no gap ( ie no out of pocket and hence paid by Medicare then there will be no issue with putting the Medicare earnings of ALL doctors in Australia on the web – it is after all our taxes that fund these rebates. This is the sort of transparency we need and occurs in other countries.

What do patients report about out of pocket expenses? Choice – the Consumer voice – asked 740 CHOICE members about their last hospital stay in 2015, 43% said they had to pay for part of their stay themselves. And those costs could be in the thousands – while the majority paid less than $1000, some forked out more than $5000. To add insult to injury, 26% weren’t forewarned about the extra costs before going to hospital. Even if information was provided, it sometimes wasn’t clear. Now sure this was all items but it just begs the question – how did the RANZCA get there figures –where is the data for all to see – perhaps it is true but there is certainly confusion in the reports of out of pocket expenses with patients bearing the cost and having little opportunity to raise the issue of the fee in a reasonable way.(

Another quote from Scott and Seal I would have to dispute is there assertion that “within private medicine in Australia, it always has been the case that doctors’ fees and remuneration remain a minor fraction of the entire pool.” They do constitute $23 billiion annually and are the most rapidly increasing part of the health budget – doesn’t sound a minor fraction to me but I guess when you are in the top earning bracket in Australia it probably seems small beer ! (see -The average taxable income for surgeons was $350,383, up a handy $17,589 on the previous year. Anaesthetists were second on the top-earners list but they had to settle for almost $50,000 a year less than their colleagues holding the knife.(…/road-to-riches-paved-with-good-incisions-20130503-2iyi0.htm.)

To raise the fact that we doctors should benchmark our fees on what “barristers, lawyers, chief executive officers and board members, particularly in the financial and banking world,” when we have an ethical responsibility to care for patients is a sad reflection of where medicine is going. Surely we can do better than that – and remember we are there to help folk who are vulnerable and not in a good position to be effectively blackmailed with these sort of fees.

The assertion from Scott and Seal that “Isolated charges by a few surgeons and other proceduralists are not common behaviours” is nonsense with increasing reports of gross abuses ( 25 % of surgeons charging out of pocket expenses of around $10000 for a prostatectomy according to BUPA.


Don’t even think about cataract surgery $2000 to $6000 per eye out of pocket from my own N of 10 study .Not bad for 20 minutes work! We doctors frankly would not know because we are often treated to the ‘privilege’ of Medicare only by colleagues.

So good doctors – who is actually having a lend of who on this issue. No one likes to have their worth ( particularly financial ) questioned. But is this what we have reduced medicine too?

Perhaps we should remember the Hippocratic Oath – first do no harm – does that mean financial harm as well – I interpret it as such. WE do need a better system and if the professions cannot self-regulate then it falls to governments to intervene- and if that starts as an Inquiry into Medical Fees then that might at least provide us with some data.

Peter Brooks, Centre for Health Policy Melbourne School of Population and Global Health, University of Melbourne. 

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