What is in a medical fee? Well may you ask. When you go to your doctor, you may see a fees schedule on the reception desk — or you may have received a letter from the receptionist/practice manager indicating that you will be responsible for certain fees over and above what you will get back from Medicare and (possibly) your private health scheme.

It is not unusual to be asked to pay something in advance, before an appointment (usually for a procedure, endoscopy, etc) is even made. Even lawyers don’t make you do that, do they? So there are at least three fees:

  1. what the government pays the doctor;
  2. the Medicare fee; and
  3. the AMA rate (why this is different does not seem to be based on any scientific evidence).

And then there is what the doctor actually charges you. Again, this is not based on anything but what the doctor feels the market will support — and it usually does because, effectively, you have no choice. Do you ask for a second opinion? Do you have a discussion about the fee and why it is so much higher than the Medicare rebate or the AMA fee, when this person is going to put a new hip into you next week or open up your belly? I don’t think so.

These out-of-pocket expenses have been the subject of some debate over the past few years and have reached the point where even the Royal College of Surgeons has expressed its concerns.

The health insurance industry has recently made some forays into the transparency debate publishing data suggesting that some surgeons charge between $2000 and $10,000 for a prostatectomy when the Medicare Benefits Schedule item is $1935, and the AMA recommended fee is $4465.

Another example is the cost of knee replacements, which can really only be described as greed on the part of some surgeons — the Medicare rebate is $1318, AMA fee $3690 and yet some surgeons are charging up to $5500.

Interestingly, the health insurance funds have all of the data on fees charged by doctors in Australia — but they feel constrained to release these data on privacy grounds. Oh, for a government that would require them to do so.

Out-of-pocket expenses have been the subject of much discussion over the past few years since it now makes up some $23 billion per annum and the most rapidly rising part of the health budget. The Grattan Institute provided an in-depth review last year and there was even a Senate inquiry, the report of which makes interesting reading and is a good lesson in obfuscation, if nothing else.

So let us look at two other examples of “medical fee gaps” that our health system creates.

The first is the gap between what GPs and non-proceduralists earn in comparison to specialist proceduralists. The OECD report of 2013 shows that Australia has the second-widest gap between these two groups of all the OECD nations. (Another silver medal for Australia!)

A recent article in Australian Doctor demonstrates this clearly.

Could this disparity in earning capacity be influencing which specialties (and remember, general practice is a specialty) medical graduates decide to practice? Increasing HECS fee debts, along with other pressures of our consumer-driven society, I suggest, are making it more difficult to recruit to general practice.

Medical earnings gap

Now these are only median earnings per hour, and the OECD report suggests that specialists earnings are, on average, at least $1 million per year while GPs take home around $250,000. Funny that we openly tell the world about the benefits of our health system (and there are great benefits) underpinned as it is by general practitioners, yet we only pay them a quarter of what we pay specialists!

Our final example is that of the recent deal on pathology bulk-billing rates, on which both the major parties have once again caved to big business. Name me a pathologist who is a principal in one of the major pathology companies who is not on a six-figure income or has not received very significant financial rewards over the last decade as these entities were privatised. These companies return a good dividend to shareholders (and we should perhaps look at where those shareholders live). The pathology companies pay little tax.

Now it seems that, once again, general practitioners are going to foot some of the bill for the rent deals that were announced last week. When are we going to stop robbing the poor to support the rich?

So here are three ways we might start to have a conversation in this country about how we remunerate doctors:

  • Should we consider doing what Canada does: not allow doctors to charge over the government rate for any medical procedure (consultation/procedure)? Doctors can do so, but they lose all access to Medicare.
  • Put out all pathology radiology services to open tender. Stephen Duckett suggested this last year, yet there was little reaction (must mean it is worth looking at).
  • Should we consider a salaried service? There are now many more doctors in the United States on salaries than not, and, of course the NHS remain one of the best-performing health systems globally, despite its challenges. One argument raised by those against salaried systems is that people don’t work as hard — given recent revelations that perhaps around 20%-30% of what we do in medicine is so-called “low value care” – i.e. it does not improve a patient outcome — then perhaps having doctors, particularly proceduralists, working less hard might be a very positive thing.

These issues are important; remember one of the basic tenants of medicine is primum non nocere (first, do no harm). Should this be extended to financial harm as well?

*This article was originally published at John Menadue’s Pearls and Irritations