Bill shock: the unhealthy truth about medical specialist fees

I could not in conscience support price gouging at that level, and so used my referral to see a different dermatologist, who still charged way in excess of the Medicare schedule fee, but not three times.

I’m one of the lucky ones. I can afford to pay an out-of-pocket bill for medical care. But many, many Australians are not so lucky. In 2021, an estimated half a million Australians either deferred or missed out on seeing a specialist because they couldn’t afford it.

I had another advantage over others, because I knew I wasn’t locked into seeing the specialist named on my referral. I also knew that only 10 per cent of initial consultations with dermatologists are charged at more than three times the schedule fee, so the person I was initially planning to see was a high-priced outlier.

A Grattan Institute report released on Monday confronts this issue of out-of-pocket payments for healthcare. Australia relies more on out-of-pocket payments than similar countries, and all up, Australians pay more than $1.3 billion out-of-pocket to medical specialists every year.

The state and federal governments need to do more to tackle this problem because it is causing sick Australians to get sicker, and therefore costing taxpayers money in preventable hospital admissions.

First, states need to expand the number of public hospital outpatients, so there are more zero-out-of-pocket options for patients. In Victoria, 10 per cent of patients referred to public hospital dermatology outpatient clinics wait 60 days for an ‘urgent’ appointment and 167 days for a routine first appointment.

The wait for a routine appointment is even longer in Queensland – a staggering 600 days. The other states don’t publish comparable information. They should. More initial-appointment slots need to be made available across all specialties to bring down waits to a reasonable time – 30 days for urgent cases, 90 days for others.

Second, governments need to provide more information to GPs so that they know how much each specialist charges. That way, GPs would be able to steer patients away from specialists who charge exorbitant rates.

Third, the federal government needs to boost the private zero-out-of-pocket payment option too. Only 46 per cent of visits to specialists are bulk-billed, significantly below the bulk-billing rate for GPs which is now almost 90 per cent. The federal government should fund bulk-billing specialist clinics, co-located with bulk-billing GPs in low-income areas.

Fourth, the federal government needs to help GPs do more and so reduce referrals to specialists. It can do this by allowing specialists to be paid for giving specific over-the-phone advice to GPs about a patient without actually seeing the patient – a so-called secondary consultation scheme.

Some patients would ultimately still need to be referred on, but such a scheme would reduce many patients’ exposure to out-of-pocket payments for seeing a specialist.

Finally, the supply of specialists has not kept pace with population growth. The number of dermatologists, for example, increased by 17 per cent between 2014 and 2019, whereas the population aged 70 and older – a good indicator of healthcare demand – increased by 25 per cent over that period. The federal government should work with the relevant colleges and states to expand training in the specialties in short supply. The proposed outpatient and bulk-billing clinic expansion can help here too.

The situation in dermatology described here is similar for other specialties: bulk-billing rates are low, and out-of-pocket payments are high.

Governments need to act, so that people who need healthcare can get it in a reasonable time frame, rather than face prolonged waits for an outpatient appointment or miss out on care altogether because of unaffordable out-of-pocket payments.

The Grattan Institute report identifies a range of strategies, costing governments up to $710 million in a full year, which would save patients about $1 billion in out-of-pocket payments each year. This should be firmly on the policy radar for the imminent federal election. Perhaps more public attention on the issue might prompt a few dermatologists to rethink how much they charge their patients, too.