Dr Rachel David spoke with ABC Radio Brisbane about out-of-pocket costs

Station: ABC Radio Brisbane
Program: Mornings
Date: 1/02/2024
Time: 9:10 AM
Compere: Steve Austin

Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


STEVE AUSTIN: What’s the point of private insurance if you still get hit with a bill when you have to have a medical procedure? And why can’t you get a quote that covers all the costs, rather than being hit with a medical bill you hadn’t expected? Some new research shows some out of pocket medical expenses have gone up 300 per cent in the last five years. There are now calls for tougher controls on those surprise medical bills. Doctor Rachel David is the Chief Executive of Private Healthcare Australia.

Rachel David, who does Private Healthcare Australia actually represent?

RACHEL DAVID: We represent Australian health insurance funds, pretty much all of that industry and including the insurance products and the services that they provide.
STEVE AUSTIN: You looked at the increase of out of pocket expenses over a five-year period. What did you see? Tell me your story.
RACHEL DAVID: Look, for a number of common medical procedures that are done in hospital, they’ve jumped up quite considerably and above inflation. Health insurance funds usually pay the whole cost of the hospital stay, including into the tens of thousands of dollars. But when it comes to doctors, under Australian law, doctors can set their own fees and charge whatever they like, and health funds will pay a proportion of that to try and eliminate as much of the gap as possible. But what they can’t do is chase ever increasing or very rapidly increasing fees, because that means that it will put upward pressure on premiums for everyone. So if-
STEVE AUSTIN: [Interrupts] I understand that there are about four types of surprises that are coming up in bills, you know, particular areas. What are they? Do you know?
RACHEL DAVID: Yeah. Well, look, we’ve had quite an increase in patient complaints about extra billing over the last few years. And it’s very clear that inflation and some of the economic shocks that have hit us, like the pandemic, are contributing to this. So what we are seeing is the inflationary pressures in the economy, plus doctors working fewer hours, coming after the pandemic, has meant that those doctors have put up their costs to cover the fact that, you know, that they’re not working as many hours or doing as many cases in a week. So that’s been the driving force behind it. But in addition, we’ve been seeing a lot of extra charges that seem to have no relationship to medical treatment being sprung on patients. So you’ve got…
STEVE AUSTIN: [Talks over] For instance?
RACHEL DAVID: … booking fees, admin fees. We’ve had one case that was reported in the media of a woman who received a mystery $800 charge for some post-surgical monitoring that she never received. And these things are not able to be reimbursed by Medicare or private health insurance, and we think that really needs to stop. And that the billing needs to go through the established systems of Medicare and private health insurance if you have- if you’ve had a Medicare procedure.
STEVE AUSTIN: This is ABC radio. We’re talking out of pocket expenses or costs that you didn’t expect after getting a medical procedure, even though you were fully insured. Rachel David, are there procedures that used to have no out of pocket fees or expenses that all of a sudden now have them?
RACHEL DAVID: Yeah, so that’s the other trend, as we’ve seen. Some minor procedures like bladder and some of the gut investigations that people do that have suddenly- that used to be bulk billed, that have suddenly- are starting to attract fees of $200 or $300 out of pocket. So one thing that- we’re suggesting a couple of things. One is that we really need to get on top of what’s happening. And because of these extra charges, we don’t think that a lot of the statistics that are collected by the Government on these fee increases are accurate. So-
STEVE AUSTIN: [Interrupts] So you think the Government is working off the wrong dataset?
RACHEL DAVID: Yeah. Well, the dataset they’re working off is not complete because the only data that they’re looking at is the data that goes through the Medicare system. They’re not taking into account, necessarily, that a number of specialists are charging fees in other ways. And I think that what we need to do is to improve that by working together on collecting the data and also doing patient surveys, so we can work out exactly what it is that the patients are paying to see a doctor. That’s the first step. And then the second step is we need to strengthen the consumer law, or even introduce new laws like the US has done, about surprise billing. Now, the Biden administration has gone down this path in the US, and it basically means that if the patient has not received proper, informed financial consent before a procedure, ideally with a proper quote, and they get surprise bills after the procedure, then they’re not liable to pay.
STEVE AUSTIN: And this is happening in Australia? The patients don’t know about these fees and they get a surprise bill.
RACHEL DAVID: Yes, it is. And we’ve heard- we’re hearing increasing reports from people that, you know, they think that they’ve got it all covered. The surgeon might have discussed in advance what they’ve charged for the procedure. And at the end they get an assistance fee, some other post-op requirement fee and a number of pathology bills that were never discussed with them. And this is the kind of thing- even some of our poorest members are not fussed about paying an out of pocket charge, so long as they know what it is in advance. And I think one of the big problems that we’ve seen is that this has started to unravel a bit as a consequence of the pandemic.
STEVE AUSTIN: Are day hospitals are the worst for this, in what’s going on?
RACHEL DAVID: Yeah, look, a number of day hospitals can levy a lot of charges because they do a lot of procedures that are not covered by Medicare, and the systems can get a bit lax. They’re often also smaller businesses, some of them are run out of doctors’ offices without any real infrastructure around them. And so that is a higher risk area for out of pockets. And in that setting, particularly if you are having a medical- Medicare covered procedure, and it’s not just cosmetic surgery, it’s really worth if your specialist is doing that procedure in their rooms, for example, that you talk to them about what the charges are likely to be in advance.
STEVE AUSTIN: So you want this Federal Government to look at the Democrats No Surprises Act in the United States, Joe Biden’s change?
RACHEL DAVID: Yeah, look, we think that’d be really worth doing. And it’s the 40th anniversary of Medicare today…
STEVE AUSTIN: [Talks over] Indeed it is.
RACHEL DAVID: … first of Feb. This has been marvellous for Australia over the years in terms of keeping costs down for people. Whether they’ve got- you know, if they have in their treatment in private or public. We’re getting- we’ve got a cost effective and really clinically effective system in terms of our health outcomes. But we just don’t want to let these things run away from us. And the pandemic has been a big disrupter. We’ve got a number of specialists working fewer hours and charging more, and we just need to keep an eye on it to make sure that consumers aren’t caught in the middle.
STEVE AUSTIN: Thanks for your time.
RACHEL DAVID: Thanks very much.
STEVE AUSTIN: Doctor Rachel David is the Chief Executive Officer of Private Healthcare Australia.
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