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12 Jun 2018


One should not be surprised that the recent Four Corners program regarding ‘out of pocket’ medical expenses was unbalanced. I know it caused concern for many doctors who felt unnecessarily maligned by the program. There was no mention of the fact that 88.5 per cent of all medical services in Australia are provided with no-gap and another 7.1 per cent of medical services provided with a known gap, which in the March 2018 quarter averaged only $95.08.  This data is publicly available from the Australian Prudential Regulatory Authority (APRA), which oversees private health insurance – so very easy to get by anyone from their website.

The Four Corners program only briefly suggested that high gaps may be a function of inappropriately low MBS rebates and private health insurance coverage rather than egregiously high fees. What about the hospital gaps?  There was also a lamentable lack of recognition that modern, high quality medicine (which is what everyone wants) is expensive. If a doctor has been committed enough to become one of the best in their field, then there needs to be some recognition of this. High quality medical care will never be achieved if doctors become solely price takers (whether from Government or funds).  We do not expect this of other professional groups or tradespeople, but the political rhetoric has been so relentless over many years that free health care is now regarded as an immutable right. 

It’s curious how the quest to make medical care as cheap as possible seems to ignore that this can only jeopardise quality – like anything else!  We either accept the cost of good healthcare outcomes or potentially endure suboptimal care.  This is not acceptable to doctors or patients and nor should it be – so let’s please have this conversation about funding health care in a fair and balanced manner that reinforces the value of high quality medical care.

Insurance companies made good money. The same publicly available APRA reports which detailed a marginal drop in private health insurance (PHI) rates (for hospital care) to 45.5 per cent of the Australian population also lets us know that the profit before tax of the PHI sector was $1.824 billion for the year up to March 2018!  Hmmm, not too bad.  Convenient to disregard the dubious nature of some private health insurance products sold through beguiling and possibly deceptive advertising.  Convenient to disregard that rebates to patients plummet to woefully inadequate MBS levels if a doctor charges only $1 over the fund’s unilaterally declared fee.  Much better to deflect attention to the doctors!

For the most part, private hospitals seem to be going well. Ramsay Healthcare is the largest operator of private hospital beds in the country and it has recently posted a half-year profit to December 2017 after tax of $288 million (increased 7.5 per cent on the previous corresponding period). The position of the private hospitals is, however, a vexed one.  They do go to great lengths to stress that they have no control over what a credentialled doctor does – but this is not entirely true. Moreover, the private hospitals should be honest with their conflict. Constraining a doctor’s scope of activity is not in their best financial interests.  They therefore have to navigate a precarious path between deflecting blame for gaps (which they significantly generate themselves) but to not ostracise doctors.  Many have also reduced medical leadership in recent years which weakens clinical governance. 

Although the ethics and professional standards espoused by the Colleges, quite eloquently stated by Dr John Batten – the President of the Royal Australasian College of Surgeons – on the program, are almost universally adhered to, the short arm of the Colleges will, I suspect, unfortunately not reach effectively to manage outlier doctor behaviour practised by a mere couple of percent.  We must agree that booking fees, over-servicing and disproportionately large fees that do not reflect skill, training or expertise, have no place in our practice. The Australian Commission for Safety and Quality in Healthcare is publishing more atlases of variation – the data is mounting and can be ignored to the profession’s irrevocable peril.  The outlier few must be gently persuaded to return to the fold, if not by peer pressure, then by more stringent means.

Cultural change can be led by the profession – individual doctors at every institution and practice modelling ethical behaviour and supporting colleagues to always do likewise. Medical leadership that promotes positive peer review is crucial, but cannot happen if (private) institutions abandon their responsibility to support this profession-led, collective effort. Colleges and Professional Associations clearly must help. Solutions might differ depending on location, discipline and institutions. But do it now we must, as this problem is ours to solve.  Any imposed ‘solution’ is unlikely to be at all palatable or flattering.


Published: 12 Jun 2018