Dr Rachel David spoke with 5AA Mornings about out-of-pocket costs

Station: 5AA
Program: Mornings
Date: 31/1/2024
Time: 10:32 AM
Compere: Matthew Pantelis
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


MATTHEW PANTELIS: Now, this is concerning. Health funds call for a surprise billing law as new data reveals soaring out-of-pocket costs for medical procedures. The gap is getting bigger, and that’s not particularly good news. Dr Rachel David, CEO of Private Healthcare Australia. Rachel, good morning. Thanks for coming on.
RACHEL DAVID: Hi, Matthew.
MATTHEW PANTELIS: Now, what does this mean for people ultimately? I mean, we hear of the gap increasing 300 per cent over the last five years in some cases. That’s an extraordinarily big jump, and people have to fund that themselves.
RACHEL DAVID: Yes, that’s right. We have seen quite a marked increase in out-of-pocket costs for people attending hospital to have common procedures over the last few years, or over the last five years, and I think there’s some very clear reasons for that. One is the amount of money that was in the system in terms of government benefits through JobKeeper and so forth and savings during the pandemic, and the fact that doctors started to work fewer hours and charge higher out-of-pocket at that time to make up the difference. Medical practices have also been hit by inflation, power, wages, food inflation, and there’s been a lack of competition from doctors moving between states and coming from overseas, again, as a consequence of the pandemic. So all of those things have created a perfect storm where consumers are now paying more out-of-pocket, and unfortunately, Matthew, the funds can’t continue to chase higher and higher and higher gaps with increased gap cover because that would put upward pressure on premiums. So we do need to understand a bit more about what’s happening, as a starting point, and then consider some ways in which we can make consumers’ life easier and help them to choose- firstly to understand what costs they’ll be up for in front and to choose a doctor that meets their needs both from a financial and a clinical perspective.
MATTHEW PANTELIS: So- okay, the people who were out there funding their own private health cover with their premiums, I mean, $500, $600 a month, what needs to happen to drive that gap down? Because, you know, they’re already contributing and contributing enough, quite frankly, with private healthcare without then having to pay a big gap just to go to hospital. I mean, it’s worth more when you end up suddenly in hospital, saying I don’t have private health, because you’ll get it cheaper.
RACHEL DAVID: Yeah. Look, it’s a complex issue. We fund medical treatment together with Medicare. And so, there are some issues around perhaps the Medicare rebates meant for those procedures as well as what health funds pay. The health funds are looking very carefully at whether they’re paying enough to- and a number of doctors do sign up for the full gap cover services. So there are options out there. It’s just very hard for patients to find them.

So we’re asking for a few things to happen. One is we need the Department of Health to work with us so we can really understand what’s going on. There seems to be a real disconnect between the figures that are reported for what services cost versus what we hear patients are actually paying. And we think that what’s happening is that some doctors are charging additional fees, like booking admin fees and so forth, that we need to capture. So we need to understand what is actually going on and what patients are really paying…

RACHEL DAVID: …versus what the official statistics suggest they might be paying. That’s the first thing.
RACHEL DAVID: The second thing is the Medical Costs Finder website that the Department of Health runs, which is designed to help people compare costs between specialists, there’s fewer than 100 specialists that are actually contributing to that, and we think that maybe the Government needs to look at that again.
RACHEL DAVID: And in addition to the health funds and to encourage more specialists in one way or the other to participate so people actually know what they’re going to be up for.

And then the third thing is the surprise billing legislation that we think would strengthen the consumer law in Australia. And basically, it’s similar to something that’s been introduced by the Biden administration in the US that means if people are not given proper financial consent and a proper quote prior to a procedure and they are shocked by the bills that they receive afterwards, that they don’t have a liability to pay.

RACHEL DAVID: So we think if that was done…
RACHEL DAVID: …then that would be a significant disincentive for some of these extra charges that we’re seeing popping up in the system, like the billing and admin fees. In fact, I even heard one the other day where someone had surgery and was actually charged a pretty good rate by the surgeon, but then afterwards was sent a bill for $800 for post-surgical care that they couldn’t claim for Medicare and that didn’t involve a set of visits to the doctor’s office.
MATTHEW PANTELIS: So they’re being ripped off, essentially.
RACHEL DAVID: Yeah. So that’s the sort of thing. It was just a charge that has appeared from nowhere. And that’s the sort of thing that we need to track and discourage.
MATTHEW PANTELIS: Absolutely right. Because, I mean, that’s almost illegal, isn’t it? You’ve just been sent a bill because you visited the surgeon who’s done an op and paid for and everything’s done, and then you get another bill on top of it. That’s almost let’s go to court over this time.
RACHEL DAVID: Well, we’ve suggested that that type of thing- you know, firstly, that should generate a patient complaint.
RACHEL DAVID: And secondly, that goes to the various authorities, whether it’s the Health Care Complaints Commission or the Department of Health. So the patient, you know- and unfortunately, a lot of people get pretty nervous about doing this, particularly if they do have a relationship with that medical practice. But, you know, it should generate a patient complaint. And we’ve been told that unless there are detailed invoices and unless the patient does do that, that it’s a kind of a grey legal area, charging some of these extra fees. But people should understand that is not on, and they are entitled to understand, firstly, before the procedure, what charges they’ll be up for…
MATTHEW PANTELIS: [Talks over] Yes.
RACHEL DAVID: …and secondly, they should be able to question it and say, well, what is this for? Will Medicare or my health fund pay? And if not, what are you doing?
MATTHEW PANTELIS: Yeah, absolutely. I mean, that’s like getting a contractor to do some work on the home, replace the roof, for instance, and then two weeks after you’ve paid and he’s done the job, you get another bill for, I don’t know, ladder support or something. And uh …
RACHEL DAVID: That is, that is exactly right.
MATTHEW PANTELIS: It’s what it is.
RACHEL DAVID: And I think sometimes the home and car repairs is actually quite a good analogy. Because in those businesses, you do get an upfront quote. And sometimes they pull up the hood and find something that you didn’t expect. And if the quote has been good enough, they’ll let you know in advance. Yeah, it could be more expensive. And those complications that you see in surgery, which could be more expensive, they’re pretty predictable in private health where you have a lot of common standard procedures. So that’s not the type of thing we’re talking about. What we’re talking about is things that come as a complete surprise. Oh, look, I didn’t know you had a surgical assistant, I don’t know what they were doing, but I suddenly got a bill for one. And then- or things that are completely unrelated to your clinical care like there’s booking, admin, and the post-op fee, which we can’t understand the rationale for.
MATTHEW PANTELIS: Now, is there the risk, though- I mean, if you stop that happening that a surgeon will just build those costs into the initial quote?
RACHEL DAVID: Look, it’s possible, but that’s where some of the initiatives that the Department of Health has already started, like the Medical Cost Finder website, which will help consumers and patients be able to at least compare what they’re charging to other doctors. And it really is a first stage people should- if financial- if paying for surgery is a concern for them and they are under cost of living pressure, their first port of call should be their GP and to explain, if a referral has been made to the surgical treatment, look, I’m on a budget and I need that to be considered and to be completely upfront about it. And hopefully with some- the Medical Costs Finder website will be able to help, but I think there needs to be some more incentives, carrots and sticks, for doctors to actually submit their data.
MATTHEW PANTELIS: I’ll speaking just a couple of days ago with a Uni professor from, I think it was Melbourne Uni, on a report on Medicare, 40 years of Medicare and how to keep it going well into the future, and one of the things that came out of that chat was the fact that we pay for a lot of things we don’t need to pay for under Medicare. For instance, getting a radiography, radiogram, whatever, ECG, whatever, done. We’re still being charged as if we were using film that needs to go off and be developed, the long, lengthy process, costly process. These days, of course, X-rays and whatever are done so quickly and effectively and easily, the cost of having them done isn’t what it used to be. So- but we’re still paying for costs that may have been set up in the 70s and 80s, and that sort of thing needs to change. Would that help take the pressure off private health insurance?
RACHEL DAVID: Look, it would, particularly as at the moment we are funding roughly two thirds of elective surgery procedures that happen in Australia. We want to make sure all of those dollars and all of our members funds are going towards treatment that is safe and effective. We certainly don’t want to be paying above the odds for things that are not going to be effective patient care. But this is a problem that has long plagued the system. There have been multiple reviews of the Medicare fee- contribution to the fee for service system, or the MBS payments, multiple reviews, and what tends to happen is that the recommendations get made, and the more academically inclined experts go in there and say, well, this needs to change. And then a small lobby group comes up and who’s benefiting financially from the system staying the same and raises very noisy objections, and so the politicians back off. And so what we’re left with is a system that’s not fit for purpose. Now, what I think is beginning to happen is that a coalition of fair-minded and evidence-based health care- health professionals, funders and providers, are actually getting together to try and address this. But it is a slow process, and we do need to continually make government aware when we’re paying for things that aren’t working.
MATTHEW PANTELIS: Yeah, indeed. All right, Rachel, appreciate your insights into all of that today. Thank you.
RACHEL DAVID: Thanks, Matthew.
MATTHEW PANTELIS: Doctor Rachel David from Private Health Care Australia, the CEO, on health funds calling for changes to tackle soaring out of pocket costs for medical procedures. I mean, some of it is just a rip off. Now, you might have a surgeon, whatever, a good relationship with, maybe repeated ops, who knows. But if you’re there all the time, you don’t want to complain about it either. Because if you’re seeing him for a period of time, well, you need the relationship to stay sweet. But if you get a bill for something you weren’t expecting after the op and you haven’t been back to see them and it’s $800, as Rachel pointed out, well, that’s just theft at the end of the day. You should get an upfront quote. It will cost this much, you’ll be able to claim this much from your health fund, this is your out of pocket, and that’s it. That’s all it should be. And not three weeks later, post-op care or whatever when you haven’t even been back. Well, that’s just theft. And yeah, you should be reporting it if that’s the case. And at the end of the day, we’ve got to do everything to try and keep premiums as low as they can stay by essentially not ripping the system off. But it doesn’t help if we’re being ripped off when you go and see a specialist. Not all, mind you. Some are probably very, very good. Fortunately, I don’t see any specialist on any basis, regular basis. But if you do, you want a good relationship and you want to make sure you’re being well looked after, and I’m sure most do the right thing. But clearly there are some out there who view the practice as a bit of a cash cow, and that’s not good and it shouldn’t be allowed.
* * END * *