PHA CEO Dr Rachel David discusses how to avoid unexpected gap payments on ABC Drive

Station: ABC Illawarra
Program: Drive
Date: 7/7/2022
Time: 4:11 PM
Compere: Lindsay McDougall
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


LINDSAY MCDOUGALL: Now, where are you at with your private health insurance? Is it something you’ve always had, maybe in the last couple of years decide to have it for peace of mind? You know that you’ll need unexpected visits to medical facilities, that kind of thing. Maybe you’ve just got it because of the private health insurance rebate with the Medicare levy. But with the cost of living hurting so many more of us at the moment, and there’s a lot of things that we have to tighten our purse strings about, is it a backup that perhaps you would consider dropping? Well, a finding from a study by KPMG and the Commonwealth Bank have found more than a third of Australian patients are experiencing bill shock when it comes to paying for their treatment, leading many of us to put off making appointments and questioning the value of private health insurance.

Joining me now, Dr Rachel David, the CEO of Private Healthcare Australia. Thank you for being with us.

RACHEL DAVID: G’day, Lindsay.
LINDSAY MCDOUGALL: Do you think private health consumers should be concerned at the moment?
RACHEL DAVID: Well, look, it always pays to think hard about any healthcare that you might need. And one of the things that we urge consumers to do if they think they need treatment is, firstly, if they need treatment in hospital, is to check to make sure they have the right level of cover, which they can do by calling their health fund. And secondly, if they are referred to a specialist doctor, the most important thing is is they have a conversation with that doctor, whether it’s over the phone or in person about what they’re likely to charge. There are usually two parts to specialist medical treatment. There’s a treatment that you have as an outpatient, and that is funded by the Federal Government through the Medicare Benefit Schedule. Private health funds aren’t allowed, under our Medicare system, to fund that treatment. So it’s what you get back from the Federal Government that makes the difference. And in-hospital care, which is the biggest cost, which if you don’t have insurance, it can cost up to $100,000 sometimes, that is what your health fund pays for. But if your doctor charges out-of-pocket charges, it is important that you have that conversation with him or her up front and get an estimate of what your treatment’s likely to cost to minimise bill shock.

So not all doctors do charge out-of-pockets, and not all services attract out-of-pockets. So many pathology tests or blood tests don’t have an out-of-pocket. And your health fund can probably help you find a doctor that will charge you a known or no gap at all.

LINDSAY MCDOUGALL: That’s interesting. So there are parts of- you know, a part of a health fund that is dedicated to doing that, to helping to find doctors that might be something that you can afford.
RACHEL DAVID: Yeah, that’s right.
LINDSAY MCDOUGALL: Is that because- is that like, you know, if you say, look, I need to go in for this, is it covered? There might be certain aspects of that procedure that can be covered, and the health fund can sort of show you how to easily find that?
RACHEL DAVID: Yeah, that’s correct. So a lot of the health funds will have a list of what they call preferred providers, and they are people who’ve got a no gap or a known gap agreement with that fund. Now, it is still important that if you’re referred for specialist medical treatment that you do have that conversation with your doctor, because there are a number of circumstances that can still cause a gap if you haven’t been properly informed. And that’s obviously one is if something goes wrong or if- the other thing that can happen is that they might decide to use a particular piece of equipment that isn’t routinely covered in the Australian health system or a particular medicine, and that’s something that can also generate an out-of-pocket cost. Now that’s not particularly common, but if it does happen, the costs can be quite high.

So I think the most important message that I can give you today is don’t leave it up to chance. Have that conversation with your GP first and let them know that cost is a consideration. Have the conversation with your health fund so that you know what you’re covered for. And thirdly, please have a conversation with your specialist up front so they can let you know if there’re likely to be any additional charges.

LINDSAY MCDOUGALL: Is there- I mean, a lot of people are having to wait a long time to even get in and see a GP at the moment. There is COVID compounding these issues as well. GPs are really stretched at the moment. Is that impacting also, I guess, cost centres and how much you might be charged for things?
RACHEL DAVID: Well, look, I think that the biggest issue with the pressure on GPs is that people are not having the regular checks that they otherwise would have, and therefore, when they do present to a health service, they’re presenting sicker or with a condition that should have been screened out some time ago, particularly certain cancers. So we are basically urging people to try and work within the current system and if to undertake all of their regular screening tests, if they do need regular medical attention to turn up for it, and even if it means needing to wait a few days. But the problem with GPs is much broader. They have not been well funded, and they’ve been under huge pressure as a consequence of the pandemic and the post-
LINDSAY MCDOUGALL: [Interrupts] The flu as well, which is…
RACHEL DAVID: Yeah. And closed borders, so that those areas that are used to bringing in doctors from overseas haven’t been able to do so. So it really is a big problem for the whole system at the moment.
LINDSAY MCDOUGALL: The- Hessel Verbeek from KPMG says that there- more investment was needed in digital health services to try to bring together booking, billing and private health insurance and rebate information into one platform. Is there an issue where it’s a little too hard to find all the information in one easy place?
RACHEL DAVID: Well, look, I think there’s a couple of issues. One is that firstly, a lot of this information is already there. But, you know, the onus is on the patient or the consumer to look for it rather than it being provided proactively to the patient. The Health Department has tried to have a go at addressing this – the Federal Health Department – by creating a thing called the Medical Cost Finder website, which is a website that in general terms gives people an idea of what certain procedures might charge, but they don’t do it down to the individual doctor level. They haven’t been able to negotiate a system where individual doctors supply their data. So it’s still important for people to have that upfront conversation if they are referred to a medical specialist.
LINDSAY MCDOUGALL: You sort of mentioned that there’s sort of two systems in place here. There’s the Medicare rebates and private health claims. Is that, I guess, a bit of a unwieldy system in terms of finding the best value for everyone involved, for the patients and the doctors?
RACHEL DAVID: Look, it can be, but the upside is the quality of that system is pretty high in Australia compared to in fact most other comparable countries. If you look at any of the global metrics on this, although it might not seem to work well in theory, our system does work well in practice, including generating some very good health outcomes, but it does rely a lot on the consumer to be very aware of where the money is coming from and what services are and aren’t covered, and that’s where it can fall down. And so certainly we would urge anybody who is having significant medical treatment, particularly elective surgery, to be as fully informed as possible before they’re actually being wheeled into hospital about what’s going to happen, providing consent, and what costs they’re likely to be up for.
LINDSAY MCDOUGALL: And, I mean, we are dealing with everything being more expensive at the moment and interest rates. Is there any support or advice for people on a low income and trying to justify in their minds whether to keep private health cover?
RACHEL DAVID: Look, I think overall, the one thing that private health cover is providing people at the moment is access to care when wait times for elective surgery have blown out to longer than they’ve been in decades as a consequence of the pandemic and the fact that you get continuity of care with a fully trained specialist, not a shift worker who, you know, may change every day, may not be fully trained or might be exhausted as a consequence of working long hours. So we’ve actually seen, as a result of those benefits, an increase in people taking out private health insurance over the last few quarters in spite of the costs, because the pandemic has created so much chaos in the public system. For low income earners, it is important that if you’re looking for private health insurance that you look at a site called That’s a site that’s completely independent that’s run by the private health insurance ombudsman. That will help people buy a suitable level of cover. It does compare different products, their cost and what is actually covered. And anyone who has private health insurance already and is struggling with their premiums for financial reasons should contact their health fund as there might be help available to you.
LINDSAY MCDOUGALL: Very good stuff indeed. Dr Rachel David, the CEO of Private Health Care Australia. Thank you so much for giving us that information.
RACHEL DAVID: Thanks, Lindsay.
LINDSAY MCDOUGALL: And yes, private You can cheque it out there. And it’s got the Commonwealth Ombudsman logo. So, you know, it’s independent there.
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