No one looks forward to seeing a specialist—whether it’s a cardiologist, paediatrician, or psychiatrist. A referral often signals your GP is concerned about a serious health problem: a suspicious lump, a complex condition, or a health issue that needs specialised attention.
For many Australians, it can be a worrying time. And those worries only get worse when faced with high specialist fees and long wait times.
In this episode, Senior Associate Elizabeth Baldwin is joined by co-authors Peter Breadon and Dominic Jones to unpack the findings of Grattan Institute’s latest report, Special treatment: Improving Australians’ access to specialist care. Together, they explore why specialist care is so hard to access—and what can be done to fix it.
Transcript
Elizabeth Baldwin: No one loves going to the doctor, especially a specialist doctor, like a cardiologist, paediatrician, or psychiatrist. Getting a referral to a specialist usually means your GP is concerned about a health problem that might be quite serious, a suspect lump, complex condition or other serious illness and needs specialized attention.
It can be a worrying time. And those worries only mount when patients face problems finding or paying for a specialist appointment in the first place.
Our new Grattan Institute report shows that many Australians are facing high costs and long wait times for specialist care, and too many are missing out altogether.
I’m Liz Baldwin, a Senior Associate in the Health Program and one of the authors of the report. Today I’m joined by my co-authors, Peter Breadon and Dominic Jones to discuss our findings.
Peter, can you give us a snapshot of the state of specialist care in the country today?
Peter Breadon: far too many Australians are faced with a really tough choice when they get that referral typically from their GP to go and seek specialist medical advice, and that choice is either fork out a huge amount of money, sometimes hundreds of dollars to go and see a private specialist or languish on a really long public waiting list where sometimes you can wait months or even years longer than is clinically recommended, and that’s happening a lot of the time.
Surveys suggest that around 2 million Australians are missing out on specialist care altogether. Half of those because of the high costs. So, it’s a really big problem. And maybe it goes without saying, but you’ve been referred to go and seek that extra medical advice because typically your GP thinks you need it.
As you mentioned in the intro, Liz, that means if you don’t go, you might get a delayed or missed diagnosis, you might get sicker, you might end up having to go to hospital when you wouldn’t have otherwise needed to, which is really tough for patients, for their families. And it also has flow on effects for government budgets.
So, this challenge of wait times and fees was why we looked at specialist care. We think there’s a real problem with access to care. A recent analysis found that looking at 10 high income countries, Australia did pretty much the best overall, but we were second worst for access to care. Beating only America, which is a famously inequitable system, and it looks like specialist care is one of the worst offenders.
So that’s what our work’s about, how to get more people the care they need.
Elizabeth Baldwin: Thanks Peter. It’s a really troubling picture. So, what can governments do to improve Australians access to specialist care?
Peter Breadon: As we’ll talk through today, there’s reforms throughout the system everywhere from training to fees that specialists are allowed to charge. But there’s a quick step that can be taken first, which is to avoid the unnecessary referrals onto specialist doctors. So, GPs today, if they just need a bit of extra advice from, it might be a psychiatrist or a paediatrician or an oncologist to say, oh, I could probably handle this care myself.
Today they have to pick up the phone, and that means they’ve got to, know a specialist who’s able to talk to them. And then you’ve got to get in the diaries of a busy GP and another busy specialist to get advice, and neither of them is directly paid.
For getting that behind-the-scenes advice to help a GP care for a patient. So that’s a pretty disorganized and inefficient process. But there’s a really good solution, and that is what’s called a secondary consultation system. Secondary consultation just describes that discussion between two doctors about how to look after a patient.
And in Queensland they’ve rolled out a model where GPs can write online a question and then a specialist in a public hospital will write back within three days. Here’s my advice. And similar systems in Canada and in America have been able to really reduce the number of referrals. So, for about 70% or more of the patients, about which the GP’s asking a question they don’t need the referral after they get that quick bit of text-based advice online. It’s pretty cheap too. We can roll out a national system for less than $30 million. That would save patients $4 million in fees for those specialists visits that didn’t have to happen and would avoid about 70,000 specialist referrals. So, before we even get to the specialist care and consultations themselves, that’s a really quick, easy, cheap way to take away some of the excess demand and make sure all the care is going to people that really need it.
Elizabeth Baldwin: And I know the West Australian government has committed to piloting a secondary consultation system as well. So, it’s certainly a feasible option. And one, we’d love to see all the states and territories roll out. Those systems will help take some of the pressure off, but of course, not all referrals can be avoided.
Dom, you had a look at the workforce side of the specialist system. What else can we do to make sure there are enough specialists to see everyone who needs an appointment?
Dominic Jones: So, the total number of specialists in Australia has actually doubled relative to the population over the last two decades.
But the surge in growth hasn’t really been well distributed. So, we’ve seen specialties with persistent shortages like ophthalmology and dermatology growing much more slowly than the number of specialists overall. While we’ve been training a lot of specialists the system hasn’t really responded to the shortages that the community is facing, and that’s just looking at the total number of specialists in Australia.
If you zoom in, there are really large discrepancies in where specialists are available. So, the city country divide is really the story here. While there are about 200 specialists per hundred thousand people in major cities, in remote areas, there’s just 70. So, the evidence shows that the best way to increase the number of rural specialists is to train specialists in rural areas.
But at the moment, only 14% of specialist trainees are actually posted outside of major cities. So, what we’re seeing here is the training system just isn’t really set up to deliver the workforce that the community needs.
Elizabeth Baldwin: Thanks, Dom. One of the other facts you drew out in the report is that it takes over a decade of training to become a specialist, so it makes sense that we want to get those settings about the specialties and the location What do you think governments should be doing to go about fixing that workforce pipeline?
Dominic Jones: The time it takes to train a specialist means that we need to get these settings right now. Because it’s going to take a long time for the system to actually respond and flow through to the wait times and the fees that patients are facing now. So, the first step really is to properly plan.
At the moment we don’t have clear data and targets for what is the workforce that we need? So federal and state governments should set up a national workforce planning body that looks at the health workforce as a whole and tries to map out where we need specialist doctors and GPs and nurses. Part of the role of the new body should be to look at the specialist training system specifically and make recommendations on the number and the type and location of university places and training positions that are needed.
The next step from that is to actually tie training funding to this workforce planning. So, in the past, training has largely been based on precedent and what hospitals and specialist colleges have already been doing. What we propose is that funding for teaching and training should be directly tied to the recommendations of this new planning body. And this way there is a clear link between the needs of the community and the types of training positions that are funded.
So, as we talked about at the head, this will take a while to actually flow through the system.
And in the meantime, we should make it easier for doctors that are trained overseas and want to come and work in Australia to actually get through and start practising. At the moment, it can take two years and $45,000 for an internationally qualified specialist to be approved to practice in Australia.
And for a lot of specialists, this process is overkill. Australian authorities and accreditation bodies should really simplify this process and open up more fast track pathways so that doctors from health systems that are similar to Australia, like those in the UK and New Zealand, can hit the ground running and start delivering the care Australians need.
Elizabeth Baldwin: Yeah, and I think the other aspect to that international specialist discussion is some reports Grattan has previously made in our migration program on reforming points tested visas. A lot of those reforms would also unlock the door for more internationally trained specialists to migrate to Australia. Is it just about fixing the workforce problem and once we’ve got enough of the right kinds of specialists, will there be enough care to go around?
Dominic Jones: Look, if only if it was that simple. Unfortunately, healthcare doesn’t really work like the perfect markets that you see in an economics textbook. And so even if we magically had the right number of specialists if it was left up to the private system, the people who get most healthcare are those that can pay the most, not those that need it the most.
In a universal health system like Australia’s, public specialist clinics should plug the gaps left by the private market. But what happened when we looked at the data was that we found poorer and rural areas are still really missing out. So after adding up public and private care and adjusting for the age, sex, health, and wealth of the population, we found that people in the areas that get the least care, such as Wide Bay in Queensland and in Western Tasmania, they get about a third fewer services per person than those in the best served areas like Eastern Sydney.
Our analysis also showed that areas with the lowest rates of private care, received about 26 fewer private services per hundred people than was typical. And the public system only compensated with about three additional services per hundred people.
Elizabeth Baldwin: It is a big task. Where do we think governments should focus their efforts?
Dominic Jones: So, we think it makes sense that governments should target the worst first. What we recommend is a national target that lifts up the bottom quarter of the country up to the 25th percentile of services per person for each specialty within the next five years. By spending about $500 million, public clinics could provide nearly a million extra specialist services in the most underserved areas.
The biggest increases here would be in remote and regional areas like the Northern Territory outback, but major cities are also missing out on some types of care too. For example, Northeast Perth gets far fewer paediatrics appointments than the average, and they’d also receive a boost under our proposal.
We think that states should have the flexibility to provide some of these additional services through models such as virtual care and fly in, fly out outreach clinics. They don’t necessarily need to just be building new public clinics and staffing those in the underserved areas.
Elizabeth Baldwin: Yeah, it makes sense that if governments are making this big new investment in clinics, we want to make sure we’re doing things the most efficient way we can. Peter, where should governments be looking to get the most out of these resources?
Peter Breadon: One thing we found as we were talking to people in hospitals and people managing hospitals in Australia and clinicians was that public specialist clinics play a very important role in the system, but it’s somewhat under-recognized and it’s somewhat ambiguous and inconsistent. So we’d love to see governments clarify the important role of these clinics in really filling those big gaps in access to care that Dom talked about, but also to lay out some really clear directions of how we’re going to improve practices and where appropriate scale up best practices and standardize how care is delivered because there are some really great but wildly divergent ways of delivering care in these clinics, which range from things like what kind of workforce mix and the roles of different workforce groups within the clinic through to triage and use of technology. For example, the uptake of virtual care really varies very widely from clinic to clinic.
With this big new investment, we’d love to see it as an opportunity to say, here’s what these clinics are really for. Here’s the directions for how they’re going to improve, and here’s how we’re going to fund and support them to make those changes. Because with such gaping gaps in care across the country, we really want to make sure every one of those extra half a billion dollars we talk about spending goes as far as possible.
Elizabeth Baldwin: So we’ve talked a lot about fixing the training pipeline bolstering public outpatient clinics so patients have real options for high quality care across the country, but while that will help in the future and plug those important gaps, two thirds of appointments are currently in the private sector and those patients are paying extreme fees now. Peter, what did we find out about specialist fees?
Peter Breadon: specialist fees are high. They’re charged a lot of the time, so only a third of care is bulk billed. And then those fees are rising really fast. So, since 2010 after inflation specialist fees have risen by 73%, and that’s, really rapid growth and it’s much faster than other kinds of healthcare like GP fees, which we hear a lot of concern about.
And they’re higher than GP fees to start with, or medicines, et cetera. So, it’s a really big impost on patients. Now, sometimes fees should be higher than others, and that can be perfectly legitimate. One specialist might have more experience, they might have higher rent, they might treat tougher patients.
But we found in the data that there are some fees that really can’t be justified. So, we’ve defined what we call extreme fees as when a specialist charges on average all their patients triple or more the schedule fee. That means the patient is paying at least three times what the government chips in.
And to give an example for a first consultation with a psychiatrist, that is $670, that’s the average extreme fee. So, these are very high fees, and we can’t see any justification for such high fees.
As I mentioned, some variation in fees can be legitimate. But there’s no evidence that doctors that charge really high fees provide better care. We looked into the data and the doctors charging really high fees. They don’t subsidize their poorer patients, so they actually charge their poorer patients more than the doctors that charge average fees. And even doctors’ groups have said that some doctors are clearly charging too much, so we think it’s time to crack down.
Dom mentioned before, healthcare services not a perfect market. It’s really hard for patients to evaluate the quality of services to push back and it’ll be a long time until all the reforms we propose if they’re adopted, flow on to give people rapid access to a public free alternative if they need it.
So, for all those reasons, governments have to crack down now, or we just risk seeing this explosive growth in private fees continue and people paying much more than they should.
Elizabeth Baldwin: So, Peter, I know the government has started to acknowledge this by committing to put more information on the Medical Cost Finder tool a website that allows patients to look up their specialist and will soon be able to see their average fee. Will that be enough to help patients shop around and avoid these extreme fees?
Peter Breadon: That’s a really positive reform that Minister Butler has brought in. And previously it was up to specialists about whether they would upload data about their fees to that website, and I think less than 50 around the country had actually done that. So, the government’s now going to fill it with data they hold so patients can get a sense of what a doctor is likely to charge.
We’d suggest two extra things. One is to flag on that website so people can see, oh, is this a high fee? Is this an extreme fee? And really make sure people can see what, we consider to be excessive fees before they go in.
The other is even that probably won’t be enough. It’s really good to shed some sunlight on the situation for patients, but we’ve seen from other initiatives in health and elsewhere, giving people information about prices probably isn’t enough. So, we are proposing that governments also, for those specialists that charge extreme fees, claw back the Medicare subsidy that they give those providers.
There are currently no rules at all about what a specialist can charge. And yet they can still get a subsidy from government. Instead, we’re saying at the end of the year, the government should look back and say, if you’ve been charging on average, triple what we give you to the patient, we are going to claw back that public subsidy that won’t come out the patient’s pocket.
We’ve designed it so that it comes out of the doctor’s pocket and it’s important to note it would only affect a very small minority of specialists. So, our data shows that it’s less than 4% that are charging these extreme and unreasonable fees.
Elizabeth Baldwin: Peter, as the economist in the room. I’m a bit worried about what this might do to the supply side of the equation. Do we have to worry about specialists just deciding to retire early or work fewer hours if we take away this income source.
Peter Breadon: Liz, it’s good to raise these risks, but I think that risk is small because it’s only affecting that small minority of specialists, and we know that on average specialists are earning quite a lot of money. So, nine of the 10 top earning occupations in Australia are different kinds of specialists.
That reflects the average income of specialists, not the extreme fee charging outliers. So, I think there really is enough financial incentive in there for people to continue practising. And there are other proposals about why don’t we tip in more money into the rebates the Medicare payments that government pay these specialists.
But evidence from previous times that’s happened suggests a lot of those investments don’t flow through onto reduced fees. It’s up to the doctor whether they pass them on and typically not all of it is passed on. And indeed, when rebates go up, sometimes there’s some evidence, at least for GPs, they might work less.
So, look, for all these reasons, we’ve chosen this way to, to really focus on those fees that are clearly unreasonable. And take back that public subsidy because basically, the government shouldn’t be supporting tacitly and promoting financially this kind of really inappropriate fee charging practices.
Elizabeth Baldwin: So, this proposal really hinges on the value of that Medicare schedule fee, but does that number have any meaning? Is there any reason that triple or more that schedule fee is something that is a really concerning threshold?
Peter Breadon: Look, we’ve tried to be very cautious and conservative by going for those extreme outliers and that triple the schedule fee number, but you raise a great point. We also recommend that the government has to look into these payments because they have become pretty delinked from any realistic cost of care, and in some cases, they may indeed be too low. We’ve suggested review those Medicare payments. Start with those ones where the patient fees are really high to check whether the government’s chipping in enough to cover the cost. So that’s a good thing to do. But in the meantime, I’m very confident the reason we chose that triple the schedule fee number is it really is getting to the most egregiously high fees. And it’s pretty clear that every other specialist in Australia can make it work financially charging significantly less.
Elizabeth Baldwin: Thanks, Peter, and we’ll include a link to the report in the show notes. Thanks for listening today. Grattan Institute is a not-for-profit organization and as it’s coming into the end of the financial year, please consider donating to our work at grattan.edu.au. You can also find us on all major social media networks as Grattan Institute.