Radio National Sunday Extra program – panel discussion regarding complaints over excessive fees for surgical procedures



Station: Radio National
Program: Sunday Extra
Date: 16/6/2019
Time: 9:31 AM
Compere: Hugh Riminton
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia; Brendan Murphy, Chief Medical Officer; Dr John Quinn, Royal Australasian College of Surgeons surgical affairs director


HUGH RIMINTON: Hello, I’m Hugh Riminton. Welcome to the Roundtable.

Well it all started with a GoFundMe page – a family trying to crowdsource $120,000 to get the brain surgeon Charlie Teo to operate on a dying relative. Since then, it has developed into an increasingly ugly spat with all kinds of reflections being made about how much some surgeons are paid, and the likely futility of some surgical interventions. Dr Teo has pointed out he only gets a small, single-digit percentage of the money raised, with most of it going to the private hospital itself. But the storm in this particular tea cup has implications potentially for all of us. What should Australians feel entitled to when it comes to operations at times of serious or terminal illness? How much should a surgeon get paid and who should pay? How much the taxpayer; how much the patient? And are we seeing, in fact, a two-tier or perhaps a multi-tier health system where your means matter as much as the medicine?

We’ve got a panel to talk about it. We want to hear from you. If you’d like to text me of your experiences: 0418-226-576 or ask a question. We should note that we did try to invite Dr Teo onto the panel but we received no response. And we should also note that any discussion from hear on are not reflections on Dr Teo or any other individual doctor; but more generally on the state of medicine.

So please welcome Professor Brendan Murphy, the Chief Medical Officer for the Australian Government; Dr Rachel David, the CEO of Private Healthcare Australia, representing the insurers; and Dr John Quinn, the Executive Director for Surgical Affairs at the Royal Australasian College of Surgeons.

Hello to all of you.

JOHN QUINN: Good morning.
HUGH RIMINTON: Now, Professor Brendan Murphy, you’re the Chief Medical Officer for Australia. What have you made of these concerns that have particularly come to a peak in the last couple of weeks over whether people are being asked to pay too much for some surgeons?
BRENDAN MURPHY: Good morning. I think it’s important to note this is not a new issue. We’ve been focusing on this issue for some time, really the last couple of years it’s emerged as a significant issue, and I don’t – I’m not going to comment on the issues in relation to any particular surgeon not knowing the details of his patients or the nature of what’s being done. But I think the issue has clearly been one that in the last few years a minority of medical specialists are charging out-of-pocket costs for private patients – people having operations – but also sometimes for non-admitted services that are, frankly, excessive. It’s a minority of specialist who are doing this. Most specialists do the right thing and charge only modest or proportionate out-of-pocket costs. But the small minority that are doing this are causing significant financial harm to some patients and are [indistinct] getting patients to question the value proposition of private health insurance. And we do have a good mix private/public system in this country and that’s certainly been a big concern for government and for me.
HUGH RIMINTON: Dr John Quinn, from the Royal Australasian College of Surgeons, are there any limits in law or in practice against what a surgeon can charge?
JOHN QUINN: In law there is not, in that surgeons can essentially charge what they wish. What they’re able to get back from Medicare or from private health funds is limited, and we need to acknowledge, as Professor Murphy has just done, that this is just a minority or specialists – surgeons and others – but surgeons particularly. But most of them are charging appropriate fees. There might be out-of-pocket fees that are known or small out-of-pocket fees, and that’s acceptable, but what the College of Surgeons is upset and concerned about is the excessive fees and playing on the vulnerable and sometimes exploiting patients and their families in a vulnerable period of their life.
HUGH RIMINTON: I’m going to take an alternative view, if you like, just for a moment. Everybody out there knows that whether you’re talking about architects or athletes, if you’re looking at, say, QCs or lawyers, that some people are simply better than others. Are they not entitled to charge whatever the market will bear?
JOHN QUINN: The difficulty is that, particularly with the comparison of architects and lawyers and buying a motorcar or buying a suite of clothes, people are of the understanding that if they pay more they will get a better service, and that’s not necessarily the case and almost certainly not the case with surgery. The fact that you may pay more for a surgeon doesn’t guarantee a better outcome or better experience or anything better than the public hospital system where it will cost you nothing – nothing at all – and you will get a first class, first rate service.
HUGH RIMINTON: I want to go to that, because you say there is no guarantee. And of course, there are no guarantees in medicine, particularly as the surgery gets more and more, I suppose, extreme – when people are really in the deepest levels of difficulty. But I suspect that many people listening to this will say: well that’s fine, are you saying then that all surgeons are equal value, regardless of experience and just native talent? Is that the argument that you’re making – that it makes no difference who does the job?
JOHN QUINN: No, that’s not the case. I don’t think everybody is equal. There are better surgeons than others, just like there are better footballers than others. But the difficulty is that people don’t know that and have no way of measuring that. And the measure is not the fee that the surgeon charges.
HUGH RIMINTON: Dr Rachel David, you’re the CEO of Private Healthcare Australia, which as I understand it represents fundamentally the insurers in this argument. What happens to surgeons who want to charge a lot? Do they- what’s the relationship there with private healthcare insurers?
RACHEL DAVID: Well look, as we’ve discussed, there’s no legal way that- in Australia under the Australian Constitution that you can stop a surgeon charging what they want to. Health funds are also in a bit of a difficult position here because, particularly at the moment, we need to understand that household incomes have not grown at all, really, in the last five to six years. And as people have become more concerned about things like premium increases there’s absolutely no appetite whatsoever for people to pay any more for their health fund premiums in the community. And so we’re really limited on being able to chase higher and higher medical fees, particularly when what we’re seeing is only about one-in-a-hundred claims out there are for these very high fees, and they tend to be clustered in particular areas – particular people that are working in very high-income areas. Or particular treatment groups. And where we have the issue- where it becomes most difficult is in those treatment areas where there’s a lot of emotion attached to them like cancer, and there are a couple of forms of cancer treatment where we’ve heard that, you know, where people can experience quite high gaps if they go to particular people. So it’s not possible for us to continue to chase very high gaps with higher payments. But what we can do is help patients choose a good specialist; and adequate specialist who perhaps doesn’t charge such a high amount.
HUGH RIMINTON: How do you manage the tension between, as you say, people- their wages are not going up. In many cases, the payments, the rebates certainly through Medicare back to the surgeon or the physician are being constrained by government; whereas the cost of the actual business of the medicine itself goes up ahead of inflation in most cases. How do you manage those economic pressures?
RACHEL DAVID: Well look, it’s through a lot of negotiation. There are a number of reasons why healthcare costs are going up at a higher rate than household incomes or inflation. Some of that’s just due to the fact that we’re paying for more healthcare because we have this very large baby boom. It’s bigger than other populations that’s just hitting an age where they’re requiring more medical intervention. So Medicare and the private health system are having to outlay more funds for that particular generation. So that’s in part the reason, but on an individual basis, for individual claims, some of the reason for that is due to new technologies coming into the system. So, we need to make sure that we, for instance, are paying a high price for those- a fair price for those things as they come into the system.

But the issue of surgeons’ incomes is a little bit more difficult, where as you’ve hear about in respective to the Medicare system, the NBS hasn’t been able to chase higher fees either, and that’s really down to the fact that if you put up the amount of rebate even a small amount for surgery, because of the large number of procedures that are being done it ends up being a very large amount of money for either the taxpayer or the health fund member’s fund through their premiums.

HUGH RIMINTON: What do you think, Professor Brendan Murphy, on transparency of costs? If someone- they’re usually or very often overwhelmed with all kinds of information at a time when they come to know that some major surgery is required. How available and trustworthy is the cost information as they try to make a choice as to where to go ahead?
BRENDAN MURPHY: So, this is, we think, one of the key issues in this whole matter. We know that most specialists at pretty good at providing financial information, but only after they’ve had that initial consultation. And once you’ve had that initial consultation, you’re in a very difficult relationship position where it’s quite hard to pull out. You’ve decided on the surgery, you may have cancer, and suddenly you find that you’re going to be charged $10,000 out-of-pocket. It’s pretty difficult to then extricate yourself from that situation and go back to your GP and get a referral to someone who might charge $1000 or nothing out-of-pocket.

So, what we’re very keen to do – with the support of the College and all the medical leadership groups – is to set up a system of transparency where we can put in the public domain the representative fees. It’s hard to be absolutely accurate because health funds have different schemes, but a good idea of what every surgeon or other procedural specialist will charge so that, in the ideal world, a GP would refer someone to three or four good surgeons who they know do a high quality procedure and the GP or the patient may then look at this website and decide- and find out the fee information and use that fee information as part of the basis for their choice of specialist, so that they can actually know before they enter that clinical consultation.

And the other part of the initiative that we’re developing is building on what John Quinn said earlier, is to try and get the message out into the public that there is no relationship at all between fees charged and the quality of care. We have a very, very well-trained health system in Australia and there is no relationship between higher fees and higher quality care. So, we get that message out to the consumer, and then they can start to use price information, as you would in any other market. Medicine unfortunately doesn’t normally behave like a market, so transparency is absolutely critical. And we do have now in some specialities – certainly in the big cities – a very good, in fact arguably an over-supply or some specialist. So choice and competitive pressure may then influence some of the outlier fees.

HUGH RIMINTON: Let me take you to someone who has sent in a message to us. M Sheehan (*) from Mittagong in New South Wales says this: my mate and I were diagnosed with the same problem within ten days of each other. I am privately insured. I had my surgery within ten days. My mate is an old-age pensioner Medicare patient and is still waiting eight months later and has now developed other problems that have now further delayed his surgery.

Dr John Quinn, is this the kind of circumstance the surgeons see all the time? That those properly insured can get through, get the thing done, and otherwise you’re left waiting so that other medical complications get a chance to compound?

JOHN QUINN: Certainly, one of the attractions of having private health insurance is a timely meeting with your specialist, surgeon, or whatever, and perhaps a shorter time for operation. However, having said that, it depends very much on the condition. And if it’s a condition that’s not absolutely urgent, yes, there is a waiting period and that waiting period in the public system is sometimes quite long, depending on the condition and the geography of where the patient might live. But having said that, also, if there is a very urgent situation people will get treated in a public hospital in an appropriate time, and it’s not going to be a very long wait if it’s something that needs treatment in a very short period of time.

So, in that situation, having private health insurance is perhaps not always an advantage because there will be some out-of-pocket fees in most cases – usually not excessive. Whereas in the public system, that will be provided at a very high quality within a timely manner for no cost at all.

HUGH RIMINTON: With those delays, though, it is the case, isn’t it, that often if someone’s got one thing wrong with them they may have a whole bunch of things which are just about to go wrong, as so therefor delays have a way of compounding. And that you do wind up- any delay on something which is not of itself life-threatening in that moment can lead to other difficulties; which then lead to a worse outcome for that individual over time. Is that a fair assessment?
JOHN QUINN: I think that’s a fair assessment, but you need to come back to the pathology that’s being talked about, and if it’s osteoarthritis of the hip, for instance, that’s not life-threatening. It doesn’t need to be done instantly. If you can get it done instantly or within a short period of time, that’s great. But if it’s a cancer related to a prostate gland or breast cancer or something else, the wait is going to be completely different and that will be treated in the public system in a timely manner.
HUGH RIMINTON: So, Dr Rachel David from Private Healthcare in Australia representing, as we say, the insurers – obviously there’s a kind of an argument that it’s handy to have that private health cover. What do you do- what proportion of people, once they’ve got their private health cover, are able to go through, get operations without a significant gap? How is that managed?
RACHEL DAVID: Really, it’s most people, because this is one of the two key reasons that people take out private health insurance for hospital treatment. The first is to get access to treatment at a time of their choosing, which is increasingly important, as people are actually working longer as well as living longer. So, to have control over when they have their surgery is becoming more and more important. And it can be quite unpredictable about how long people wait in the public system. For the most part, if you have something really nasty like cancer you’ll get in quickly. But there are some other conditions like the arthritis-related conditions that need joint replacements, and progressive blindness – cataract problems – where it might not be judged as urgent, but your quality of life can be pretty much destroyed if you’re on a waiting list for a couple of years, for instance.

So that’s one major reason, but I also think there’s another reason in there why people do take out private health insurance that’s becoming very important: people want to have control over the process of selecting their surgeon and to have one person or one practitioner really fully responsible for their care; not someone who’s got a change-over or a shift worker, for example. So that’s coming across as being sometimes even more important for people who want a sense of control over what’s going to happen. This is also a reason why people are becoming concerned about gaps. If they’re informed in advance about their medical gap and they have a sense that they’ve been in control of selecting that particular doctor they’re much, much less likely to be unhappy about paying the gap or unhappy about their treatment; but if they feel they were compelled to go down a particular pathway and were blindsided by the bills they got in the end. And I think that coming back to Brendan Murphy’s comments about having the website as a tool to help consumers and their GP – that really is very important, that transparency – so the consumer feels that they’ve been in control of that selection process from the get go and they have an idea in advance of what they’re likely to pay because those folks have not expressed the anger that people who were blindsided by their bills have expressed.

HUGH RIMINTON: Now, Professor Murphy, it has been reported that you have talked about there being some sort of investigation or inquiry into this process of high fees, sometimes leaving patients and their families with severe financial distress at the end of it. The suggesting being that, at times, it becomes so unethical it should be considered malpractice. I don’t know if you accept that as an accurate reporting of your intentions?
BRENDAN MURPHY: I think that was slightly overblown, but it is true that I have been interested in discussing with the colleges and with the medical board whether the very extremes of egregious charging- you know, a good example was – I had a lot of correspondence, as you can imagine, on this – a pensioner who had to take out a second mortgage of $15,000 to pay for cancer surgery. When such billing behaviour is so egregious that is causes material financial pain, my view is that that is not ethically consistent with what we as medical practitioners uphold. We are a healing, caring profession, and the medical board hasn’t taken a position on this. The College of Surgeons, I think, has played a lead role, in they take the view that fellows who do charge in a way that causes material harm – they have a process of reviewing that. But they have no real power to influence them, but if the medical board took a position on the ethics of it that may be something we could look at in the future. But that would probably only apply to the most egregious charging where it’s very clear.
HUGH RIMINTON: Dr John Quinn, you’re with the Royal Australasian College of Surgeons. Can you see a circumstance in which a surgeon could actually be hauled up for malpractice because of the level of fees that they charge?
JOHN QUINN: The College has a code of ethics and it’s a breach of the code of ethics to charge excessive fees or to play – exploit if you like – play on the vulnerabilities of patients and their families with relation to urgency and fees. So, we regard it as a breach of the code of conduct, and regard that very seriously, and do try and control that part of it. The College of Surgeons, though however, is a little hamstrung in that we do not and are not able to set a scale of fees. So, what is called an excessive fee becomes a very difficult exercise to look at.
HUGH RIMINTON: How many people have you pulled up on that excessive fees notion?
JOHN QUINN: In the last year there have been about 60, I think, and many of those have changed their fee when there’s been discussion with the patient and the College of Surgeons.
HUGH RIMINTON: So, is that 60 with a specific case with a specific patient that they get pulled up, or in a more general sense where they’re saying that you’re just charging too much?
JOHN QUINN: No, it’s in relation to complaints lodged by patients who say: I’ve got this bill which I think is excessive. And we will look at it and see if we think it’s excessive without setting a scale, and then discuss with the surgeon and the patient if they would like to review that. And mostly they do.
HUGH RIMINTON: I guess not everyone’s had major surgery, but everyone’s taken their car down to the mechanic, and you can go down there thinking that you’re getting an ordinary service or something; and it turns out to be much bigger and you wind up paying a lot more. Isn’t that also sometimes a potential difficulty: you go to a surgeon, it winds up being more complicated than you thought, and so therefore you get sprung with a bill – it could be not just the surgeon; the anaesthetist and all the rest of it – that you simply weren’t expecting to get? Is that something that happens, were people come out of the anaesthetic and go: I wish I didn’t come round?
JOHN QUINN: Yeah. I understand the situation that you’re talking about, and that does happen. And what the College of Surgeons is trying to push, along with Professor Murphy and others, is this- the website that will give surgeons the ability to show their fees and rather than say it will be X dollars, we would like them to say: the maximum out-of-pocket fee will be whatever it is. So that if things change in the course of an operation – unexpected things are found, like in your car servicing example – that the fee that the surgeon and the anaesthetist and other receive is higher because of complication, because of the complexity of the surgery, but the patient still has a known out-of-pocket fee of X dollars.
HUGH RIMINTON: Seems a reasonable argument.

Just on one matter which gets raised in this, and that is this idea of almost heroic surgery: something- the last throw of the dice, small change of success, sometimes a really, really major intervention. Rachel David, what happens in the, so far as an insurer is concerned, when a doctor says: look, this thing I want to do. This operation probably won’t work, but the family is desperate that I give it a go. I’m willing to give it a go.

Is that the sort of thing that should be covered? The shot-in-the-dark type surgeries, or is that the point when an insurer comes in and says: you know what, don’t?

RACHEL DAVID: Well look, that’s not really our role to say not to do it, and I would stress that there are a number of surgeons out there that do very complex procedures sometimes towards the end of someone’s life that don’t actually charge excessive fees for doing so. In fact, most of them don’t. And a lot of this surgery does actually take place in public hospitals. The surgery that takes place in private where most of the elective surgery or the less urgent surgery takes place is pretty predictable. But occasionally you do get those situations and there is a system that health funds have, particularly for people and their family’s who’ve been members for a long time, where you can get what’s called an ex gratia payment after discussion with the health fund for particularly unusual surgery or particularly difficult treatments.

What I would say in relation to that, though, and I have many colleagues who work for health funds, many doctors who work for health funds who spend hours with patients who’ve somehow fallen through the cracks – every week of their lives trying to help them access healthcare. And often the fund does end up paying in those situations. But I would say there does need to be some evidence base to underlie the process or the procedure that’s being proposed. So, what we won’t do is fund something that’s so far from established medical practice or is in the- that it really has no chance of success. And this does with very vulnerable families, particularly when there’s a diagnosis of cancer, people can have a kind of thought process that thinks: well, if I cut it out or if we have surgery then it’s gone. But unfortunately, for a number of cases of cancers that spread or very aggressive forms of cancer, cutting it out or having surgery is no better. You’re not likely to live longer than if you have conservative treatment, radiotherapy or sometimes no treatment at all. So, people do have this thought process that if, you know: we cut it out then it’s gone. Unfortunately, that does not guarantee a longer life, and under no circumstances should people be charged a lot of money to go down that path.

HUGH RIMINTON: Brendan Murphy, what do you make- I’ve seen quite a bit of commentary over recent years from doctors saying that they feel under great pressure from, family members usually, for some sort of heroic surgical intervention that’s often futile – often doesn’t affect in a positive way the outcome for the patient and, inevitably, ties up operating theatre time, ties up all the infrastructure that goes around surgery. Is that a reality?
BRENDAN MURPHY: Look, I think futile care- I mean, futile care is probably a fairly emotive term and I would prefer to talk about care that has little prospect of meaningful improvement. And it is an ethical obligation on all doctors to not undertake treatment that has no realistic prospect of improvement, and I think- the challenge of course is that our specialists are now so technically clever that they can do better and better operations and procedures, and the technical challenge is not the problem; it’s actually how frail or the other circumstances of the patient. And there is some evidence, I think, that people feel pressured into doing things but it’s very much the obligation on the specialist to say that they won’t do things that have no evidence base, as Rachel said. Unless it’s in a research context, and then you have to be very open and disclose that with the patient – that’s you’re in a research trial and you’re trying to see whether something that isn’t proven may work.

But if things are not in a research context and there’s no evidence that there’s benefit, it is ethically questionable for a medical practitioner to undertake such a procedure.

HUGH RIMINTON: Dr John Quinn, last word with you, I guess from the surgeon’s point of view: where do you see these trend lines going over time? How have they gone? Where do you see them going over time? Is it becoming harder and harder for surgeons to contain their expenses or it getting more expensive for patients, or staying much as it is?
JOHN QUINN: It’s getting harder and harder to make decisions about when not to operate, and I think it’s very to know that surgery is not always the best choice, and other treatments or in fact no treatment may be just as good as a surgical treatment. But it’s a very difficult thing for surgeons, both emotionally and ethically, when there is a push from the family or from the patient to do something that we think is not going to be beneficial either in length of life or quality of life to be undertaken. And because we can do things that are technically more difficult, because surgeons can operate, doesn’t mean that they should operate in all circumstance. And that becomes a very difficult decision but one that surgeons are exposed to more and more as time goes on.
HUGH RIMINTON: [Indistinct] … conversations that have to be had.

That’s all we’ve got time for but I really appreciate all of you coming on, and hopefully us all getting a few more insights into how this works.

Professor Brendan Murphy, Chief Medical Officer for Australia; Dr Rachel David, CEO of Private Healthcare Australia; and Dr John Quinn, who you just heard then, Executive Director for Surgical Affairs at the Royal Australasian College of Surgeons. Thank you to all of you.

RACHEL DAVID: Thank you.
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