Seniors delay treatment as specialist fees skyrocket
A think-tank report proposes surgical-like reforms to counter high medical fees.
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National Seniors Australia (NSA) research highlights growing unrest about the unaffordability of private health care in Australia. This must be addressed to preserve private health as an option for older people.
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The rising cost of seeing a medical specialist has been a long-time concern of older Australians and National Seniors Australia (NSA). Unfortunately, there is no simple solution in sight.
However, a new report by the Grattan Institute shines a light on those specialists whose high fees defy the justification that they, too, are facing rising costs.
The report says fees can reach $370 for an initial visit to an endocrinologist. For a single psychiatry consultation, it can be “a whopping” $670.
There’s no evidence that high fees mean better care – although they clearly harm patients and put pressure on the health system.
The Grattan Institute authors claim one million Australians skip or delay specialist care each year because of the cost.
“That means delayed diagnoses, deteriorating disease, and more demand for hospital beds. And fees keep surging higher.”
Medicare rebate decline
The justification used by specialists, and GPs, for raising prices is that the government’s (Medicare) rebate to help them with costs hasn’t kept pace with costs and inflation for many years, forcing them to pass costs onto patients.
The report concedes this is the case, but fee increases have made up for it many times over. Between 2010 and 2025, the real value of Medicare payments fell by about $8 for an average appointment but specialists charged patients $34 more per appointment – an extra $4 for every $1 lost.
For some Medicare items, fee growth has been even faster. Medicare payments for initial psychiatry consultations decreased by $13, in real terms, from 2018 to 2023. But average out-of-pocket costs rose $108: more than eight times as much.
Between 2006 and 2021, specialists’ costs grew by about 2% a year, while inflation grew at 2.2%.
“Meanwhile, fees have far outstripped growth in inflation or wages,” the report says. “That’s one reason that specialist businesses are more profitable than almost any other industry, with profits rising by about 5% a year over the same period.
“With such high average profits, it’s hard to justify an across-the-board rebate boost, which could cost billions, and may not help patients much. When governments tipped more money into the Medicare Safety Net or GP rebates in the past, patients saw just part of that funding – doctors held on to the rest.”
The report wants the government to review Medicare rebates to ensure they reflect the cost of providing care.
However, there are other causes for high fees:
Workforce shortages
The Grattan Institute is calling on governments to commit $500 million to fund one million new public specialist appointments in the worst-served parts of Australia, and make public clinics more productive, so they can see more patients. The report says governments should reform the training system so that we plan and pay for the specialists we’ll need in future, where we need them. And they should support GPs to manage more care in the community, reducing unnecessary referrals to non-GP specialists.
Long-term reform
“Fees are surging, and there is too little competition and choice – and no regulation whatsoever – to deal with the problem of excessive fees,” the report says. It proposes withdrawing taxpayer funding from those specialists who charge patients on average more than three times what the government pays them.
The report concludes, “Specialist fees aren’t a neat formula defined by taxpayer funding and the cost of delivering care. That’s why more taxpayer funding won’t be enough to stop excessive fees.
“Instead, we need new rules to rein in the worst excesses. Otherwise, patients will keep facing bills they can’t afford, for care they can’t afford to miss.”
The Australian Medical Association (AMA) says the report’s call for government to withdraw funding to specialists goes “too far”, characterising it as denying patients access to their Medicare rebate simply because of their choice of specialist.
The AMA wants an independent private health system authority to oversee reforms that would support a more sustainable private health system that protects patient choice and clinical autonomy.
The AMA also wants all governments to reach agreement on a new and properly funded National Health Reform Agreement, to bring down unacceptable hospital waiting times.
“We also welcome recognition of the need for an independent national workforce planning agency to ensure Australia’s medical workforce has the right skills, in the right places, to meet future community needs and demand.
“Targeted investment in a sustainable, well-distributed health workforce – including investment in rural and regional training – is key to ensuring every Australian, no matter where they live, can access the care they need.”
NSA initiative
In early 2019, the Federal Government announced it would fund the development of a new website to enable consumers to compare specialist fees and prepare them for the costs they may face.
We are working with the government to ensure this tool drives down the cost of health care and will continue to advocate for ongoing reforms that reduce out-of-pocket health care costs.
Related reading: Grattan Institute, The Australian, NSA, AMA
