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Calling for transparency in medical fees

A lack of transparency around medical fees and the well-documented variations in such fees show the need for action at all levels of the health system – from Health Ministers to insurers, GPs and patients, says Professor Peter Brooks of the University of Melbourne.

If you or yours are contemplating a medical intervention – particularly if this involves a surgical procedure such as a knee replacement – then it’s well worth asking some pointed questions about the charges involved, he says.

[divide style=”dots” width=”medium”]

Peter Brooks writes:

When you go to see your health professional, the question of the fee is an issue you may think about but never get around to asking. Greater transparency concerning medical fees is an innovation that has some way to go in Australia.

PeterBrookspicIf you are seeing a GP, then there will likely be a notice at the reception desk indicating that it is a bulk billing practice or charges AMA rates, but when you see a specialist, the billing process is less clear.

The fees that you are charged when you see the doctor may be Medicare only (ie the fee is completely covered by Medicare) or it may be the AMA fee for that item – how this is calculated and its justification seems shrouded in mystery – or it will just be the fee set by that particular doctor (on what basis we know not).

You are required to pay that fee, or at least the part of that fee not covered by Medicare or perhaps your private health insurance if it relates to hospital care.

What you have to pay out of your own pocket – the so called gap fee (or out of pocket expense) – has 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 specialist should inform you as to the out of pocket expense, but how often does that occur?

Patients are in pretty vulnerable positions at this time. Are you really going to debate the out of pocket expenses with someone who is going to operate on you next week?

So what do you need to know about out of pocket expenses?

Firstly, these charges are significant, with Australia ranked in the middle of the OECD countries in terms of the proportion of health care costs paid for by out of pocket expense.

Secondly, there is good evidence to show that out of pocket expenses impact more on those who need health care most, and that they are stopping patients consulting health professionals for care that they need.

One of the major issues with out of pocket expenses is that there is very little transparency. It is hard to find out what the usual charge for a particular procedure is, and how that figure is calculated, let alone to be able to compare fees between providers.

Surely that is what competition is all about – being able to see prices and act accordingly – but not so apparently with medical fees.

But, finally, we are seeing some lifting of the transparency ‘veil’ on these fees. Some members of the health insurance industry (eg BUPA and nib) are promoting more openness, particularly in the area of surgical fees.

Data from nib suggests 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 .

Knee replacements are another example of what can 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.

Surely it is reasonable to ask why this variation occurs in fees for the same operation?

It may be reasonable for one surgeon to charge four or five times as much as the Medicare fee on the basis of his or her expertise and outcomes.

The trouble is that we have absolutely NO data on which to judge these practices.

Health insurance firms should be applauded for at least starting this conversation. They do have all the data on what fees doctors charge and should be able to release it for public scrutiny. That would really allow some decision-making to occur.

Some countries, such as Canada, don’t allow doctors to charge over the schedule fee if they remain recipients of Medicare funding – now that’s a thought!

In the USA, Medicare, the health insurance agency for the over-65s, provides a website where you can see what every doctor has received from Medicare across the US.

Why not do that in Australia?

Medicare is financed by your taxes – so let us request the Federal Government to require Medicare to provide this data.

That would start the transparency roll-out and should tell us more about the fees individual practitioners charge.

Greater transparency and accountability should encourage better charging practices by health providers. This is the reason BUPA and nib are making these data somewhat more transparent.

To be fair, the Royal Australasian College of Surgeons has begun to discuss this issue,as shown by the report Excessive surgical fees unethical and inappropriate – RACS.

But this is not just about surgeons; this issue also relates to proceduralists in general – cardiologists, dermatologists, ophthalmologists and gastroenterologists.

High out of pocket expenses are getting out of hand. Consumers need to confront this issue and join an informed and transparent debate.

Perhaps there are reasons why surgical/procedural fees for the same operation should vary by a factor of 5 to 10 times? But without any justification for this situation, how can we decide!

From Grattan Institute report
From Grattan Institute report

The Grattan Institute has produced an excellent summary of out of pocket expenses (see extract).

Last year, the Senate held an inquiry into the issue of out of pocket expenses, and again this makes interesting reading, Out-of-pocket costs in Australian healthcare.

That inquiry made a number of recommendations but it is hard to determine whether any have progressed.

Separately, the Government should be congratulated on instituting the review of Medicare items of low value – that is, things that really don’t improve patient outcomes.

So how might we (consumers) address out of pocket expenses?

Firstly, always ensure you know what the out of pocket expense for a procedure (operation, endoscopy, investigation) is going to be – well before you agree to take the doctor’s advice and go ahead with it.

You have every right to know the costs – full disclosure is required by law. You should also ask what the outcome will be if you don’t go ahead with what is recommended, and how will your health be improved by the procedure.

If you are still concerned, then you might discuss the issue of fees with the GP. You could ask your GP for a second opinion.

The GP should be your advocate and help your decision-making. This is the brave new world of consumer choice and shared decision-making; your GP usually knows you better than your specialist and is well placed to assist.

This is a difficult issue, but one that must be addressed if we are going to have a health system that looks after all Australians.

One of the basic rules of medicine is “first do no harm” (to patients ). Perhaps that should extend to financial harm as well!

• This is a lightly edited version of an article by Peter Brooks that appeared in the latest issue of the Consumers Health Forum journal, Health Voices, which focused on the topic of “Consumer-centred Health Care in the 21st Century”.  You can read the full edition of Health Voices here.

• Peter Brooks, AM MD FRACP, is a professorial fellow at the Centre for Health Policy – School of Population and Global Health University of Melbourne and until recently the Executive Director Research at Northern Hospital Epping. He has held previous posts as Executive Dean of Health Sciences at the University of Queensland, Professor of Medicine at St Vincent’s Hospital, Sydney, and was the Foundation Professor of Rheumatology at the Royal North Shore Hospital and the University of Sydney. Follow him on Twitter: @roomdash

 

 

Comments 1

  1. David Brown says:

    and radiology/pathology…. oh… scans, ultrasound, MRI, etc, etc also

    A year or so ago I sent Saint John of God hospital asking why some pathology items were 3 times the Medicare scheduled fees… got a reply it wast the right ology… and when I sent it back corrected never received a response….

    Will keep looking on my laptop for the letter… maybe its time to really restart hitting the issue….

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Summer reading 2020-2021
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Testing Croakey News category 1
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Croakey Conference News Service 2013 – 2019
2013 conferences
Australian Centre for Health Services Innovation Forum 2013
Australian Health Promotion Association Conference 2013
Closing the Credibility Gap 2013
CRANAplus Conference 2013
FASD Conference 2013
Health Workforce Australia 2013
International Health Literacy Network Conference 2013
NACCHO Summit 2013
National Rural Health Conference 2013
Oceania EcoHealth Symposium 2013
PHAA conference 2013
2014 conferences
#IPCHIV14
AIDA Conference 2014
Congress Lowitja 2014
CRANAplus conference 2014
Cultural Solutions - Healing Foundation forum 2014
Lowitja Institute Continuous Quality Improvement conference 2014
National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
Rural & Remote Health Scientific Symposium 2014
2015 conferences
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Population Health Congress 2015
2016 conferences
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#cphce2016
#CPHCEforum16
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2017 conferences
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#BTH20
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Australian Palliative Care Conference
2018 conferences
#6rrhss
#ACEM18
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