6PR Mornings interview with Dr Rachel David on the issue of surgeons’ fees

Station: 6PR
Program: Mornings
Date: 4/6/2019
Time: 9:21 AM
Compere: Gareth Parker
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


GARETH PARKER: The issue of surgeons and their fees has come to the forefront in recent days. It’s a story that’s largely come out of Sydney, and it’s largely come out of the work of Dr Charlie Teo, who is very famous, very renowned, and of course he has been- well, little Milli who the West Australian have been writing about in recent days, he’s been in Charlie Teo’s care. Others in the profession have blown the whistle on the fact that patients are having to sell their houses, put up GoFundMe pages, raise tens, hundreds of thousands of dollars to pay for some of these operations, even if they are insured. I don’t really want to make this a sort of a pro or anti-Charlie Teo argument, but I do think it highlights issues around specialist fees. I do think it highlights issues around what doctors charge. And it also begs the question about whether you do need to pay a lot of money to get good care; is just as good a care available without paying lots of money out of pocket – if you’re privately insured – or indeed for free in the public system? It’s a fascinating debate.

The CEO of Private Healthcare Australia is Rachel David. Rachel, good morning.

RACHEL DAVID: Morning, Gareth.
GARETH PARKER: This has been a debate that’s been raging on both sides of the country. Charlie Teo is very much in the spotlight as part of it, but I think it’s a bigger issue than just one surgeon.
RACHEL DAVID: Sure, sure. Look, that’s right. By law, private medical specialists have the right to charge what they like for hospital care and for treatment out of hospital, and as you know private health insurance can fund some of the hospital care in situations where people actually have insurance. But for the small number of doctors that charge very high fees, we want to signal to patients that they actually do have a choice. They can talk to their GP and talk to their health fund about other practitioners that might be able to offer the service for no gap in the private system or in fact in the public system, because the number of doctors that are doing this is actually quite small, and they’re not always the best person to secure a good outcome.
GARETH PARKER: So, how do doctors decide what they charge? You’re saying by law they can charge whatever they like, how do they decide?
RACHEL DAVID: Well look, for about 56 per cent of patients that have private health insurance and are treated in a private hospital, they’re treated entirely gap free because their doctors have chosen to be part of a gap cover system offered by health funds. There are various reasons specialists arrive at what they charge based on certain factors, but it’s almost never the quality of their practice that determines what they charge. For the most part it’s what their peers are charging in a particular area, and we know that in neighbourhoods where there are large numbers of doctors competing, that gap fees tend to be lower. And we also know that in areas where household incomes are high, that gap fees tend to be higher. So they’re essentially charging what their peers are charging and what the market will bear. So basically, by adding transparency to the market and getting both the consumer – the patient – and the GP information about specialists that do the same thing but might not charge the same amount, this enables people to better directed to specialists who can help them.
GARETH PARKER: So do you think that patients think that the more a doctor charges, the better he or she must be?
RACHEL DAVID: Yeah, well we’ve certainly got evidence of that. That particularly very vulnerable people, who’ve been diagnosed with cancer or other serious illnesses, often believe that by paying a large amount they secure a better outcome. Unfortunately, you mentioned a situation which is just utterly heartbreaking of, you know, a child that’s been diagnosed by a group of medical specialists as having a terminal condition, and you know, in the pursuit of hope which is an absolutely human thing to do, the family have sought a second opinion and you know, they’ve been offered surgery, but at a very high cost. Now there’s no evidence that surgery for terminal brain cancer is any better than doing nothing or more conservative treatment. But, you know, they’ve been sold the promise of hope at a very high cost and that’s where we have an ethical issue rather than clinical issue about whether that should be allowed to happen in Australia.
GARETH PARKER: Yeah. So on the front page of The Australian today, Sean Parnell their Health Editor reports that the Chief Medical Officer Brendan Murphy – who we hope to speak to today but is unavailable – but he’s going to investigate whether doctors who charge high fees that leave patients with their families in that severe financial distress, whether they should be punished.

It seems that he’s going to determine whether there’s a threshold at which billing becomes unethical. The suggestion is that that could even be malpractice. I mean, what do you think of that?

RACHEL DAVID: Well look, I think it needs to be justified. I mean we know that for example the brain cancer situation is incredibly tragic for those people that experience this, but we need to look at the outcomes and see whether they are actually better than another surgeon or no treatment at all. At this point we’ve got no evidence that a struggling family trying to find $120,000 is going to make their position any better, in fact there’s a lot of evidence that could make it worse.

The other situations we see are people who are charging very high amounts, again, to people with cancer for things like breast reconstruction or prostate surgery, when those treatments are actually available in the public system for people with cancer or at lower cost from other providers. And I think in those situations we have people who are very vulnerable and you see people that are charging five figure sums out of pocket, that’s in addition to what they’re getting from the Health Fund and the Medicare system. They need to be held to account and actually provide evidence about why their treatment is so much better than everyone else’s that that’s justified. And at this stage we have seen none of that from any of the people who have been brought to our attention charging very high fees and we think that at the very least consumers need to be aware of what outcomes they’re buying when they try and crowdfund and spend this amount of money.

GARETH PARKER: So are those doctors and specialists greedy?
RACHEL DAVID: I can’t comment on the motivation of individual specialists and I certainly don’t have the ability to get inside their head and work out how they specifically justify to themselves and others why they’re charging these very high amounts. We do know from ATO data and other sources that surgeons are the highest remunerated people in the Australian community. Even if they charge nothing out of pocket, their remuneration compared to the average would be perceived by many people to be more than adequate.

And so I do think this requires greater justification and more evidence from those people who are charging- from the small number of people who are charging very high fees. And I say small because of 44 per cent of people that are treated in a private hospital that are charged a gap, of that 44 per cent only two per cent are being charged these five figure sums. But they do tend to be in areas where patients are pretty vulnerable. I mentioned prostate surgery, brain cancer and breast reconstruction as some of the areas that we’re a little bit worried about. And I think that Chief Medical Officer Brendon Murphy is absolutely justified in calling these people out and asking for at least more information about why they’re doing this.

GARETH PARKER: It’ll be interesting to see how it unfolds. Thank you for your time this morning, Rachel.
RACHEL DAVID: Thanks Gareth, I appreciate it.
GARETH PARKER: Dr Rachel David from Private Health Care Australia, so representing the insurers.
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