Specialists’ fees combine profit maximisation with fairness


By Tony James

8 Mar 2016

Australian specialists aim to maximise their profits in charging above MBS scheduled rates but are also fair in trying to accommodate patients with lower incomes, a health economics analysis has concluded.

Associate Professor Meliyanni Johar and colleagues at the University of Technology Sydney said that despite the presence of discounts to low-income patients, out-of-pocket expenses remain substantial when compared with other healthcare providers such as GPs.

“There might be a case for devising incentives for specialists to charge low-income patients lower fees, similar to those in the GP market, to help remove some of these barriers,” they said.

Their conclusions were based on data from the Sax Institute’s 45 and Up Study, the largest follow-up health study conducted in the Southern Hemisphere.

Between 2006 and 2010 it collected data on more than 267,000 randomly-selected adults in New South Wales aged 45 or more and living in the community, and is continuing to extract information from linkages with databases including Medicare. The data includes more than half a million specialist consultations every year.

Professor Johar’s team looked at initial specialist consultations – MBS Item 104 – for which the MBS rebate was $68.75 in 2010 but the average fee charged was $124.62.

However, the average gap payment ranged from $47 for low-income patients (household income <$20,000/year) to $74 for high-income patients (>$70,000/year).

“While this gap equates to a 19% lower fees for the poorest patients it is unlikely to remove the substantial financial barriers they face in accessing specialist care,” they said.

There were large variations across specialties, with neurosurgeons having the largest fee differential between high-income and low-income patients.

Proxies used by specialists to assess patients’ capacity to pay included their age, possession of a health concession card and whether they had private health insurance status (even though it is not possible to insure against the gap).

The study was prompted partly by the distinct differences between specialist and GP ‘markets’.

For example, 83% of all GP consultations are bulk-billed, and GPs are rewarded by MBS incentives for doing so.

In addition, choice of specialist is largely determined by the GP, and a second consultation is needed for another referral if a patient wants to switch to another specialist.

The federal government specifically acknowledges that doctors are free to determine the value of the health services they provide, and to alter the fees charged to specific individuals

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