Preview above: what’s the real cost of private healthcare, and can we afford it? Tuesday 24th of September 8:30pm on SBS One and SBS On Demand.
If you’ve been paying for top cover private health insurance, you might expect that your insurer would cover your expenses if you were to get sick or injured and require medical treatment.
You may even expect that when you receive a quote from a specialist for a consultation or surgery, it would be very similar to a quote you’d receive for the same service from another specialist.
But as private patients tell Insight’s Jenny Brockie, that is far from true and like them, you could be left thousands of dollars out of pocket – whether you can afford it or not.
Karen Coleiro was diagnosed with breast cancer in 2016, requiring a mastectomy and breast reconstruction.
While removal of the cancer left her only $500 out of pocket, she was shocked to receive a quote for $14,000 for a breast reconstruction.
“I didn’t think there’d be any gap, I thought I’d be covered,” Karen says.
I was not having elective surgery, I was having a reconstruction because I had cancer. So I was shocked when they gave me the quote.”
Out-of-pocket costs for patients can come as a result of the specialists charging an extra fee on top of what Medicare and the insurer covers.
Currently, there are no regulations or limits around what specialists can charge as a ‘gap fee’ for appointments and procedures.
And research shows that what you pay for the same services from different specialists can vary hugely depending on who you see, and simply what they decide to charge you out-of-pocket.
When Sheryl Rotondo’s neck started giving her trouble, she knew she would need to get it fixed immediately.
A specialist had told her she needed the surgery as soon as possible, and as a personal trainer, she needed to be able to move to make a living.
She required anterior disc replacement surgery and soon realised that her insurance would not cover the entire cost but felt she had no other option.
“Being told the price was a bit of a shock, it was the most expensive thing I could buy, a new neck,” she says.
But going in the public system I would have to wait a year or more… I wouldn't have been able to work, I would have had to go on unemployment.”
Sheryl was charged $24,000 out-of-pocket, and her mother helped her pay for the surgery by dipping into her superannuation.
Sheryl had initially received a cheaper quote but decided to go with a more expensive sports specialist as she knew it was a delicate and complex surgery.
In a so-called ‘free market’ how free are patients to shop around for the best price?
The private healthcare system and the specialists working within it are, for all intents and purposes, operating as businesses that need to make a profit.
It could even be described as a ‘free market’ – and in some ways that is true.
In the healthcare system there are products or services you receive, like consultations and surgeries, and there are prices for those products.
Those prices can vary depending on what you need and who you see – just as the price of a car or dress will vary depending on where you buy it.
And, much like any free market, there are people who are providing those products (in this case, doctors) who are able to charge the consumer what they choose.
From there, it’s up to the consumer (and in this case, the patient) to shop around. And that is exactly what we are encouraged to do.
But the definition of a ‘free market’ doesn’t just mean the service provider has the freedom to charge whatever they think they’re worth and consumers decide what they want to pay.
It also requires that the consumer is able to access and navigate the information they need to make the right choice for themselves when making that purchase.
So, do patients have the information they need to decide which specialist they should go with? And if they don’t, can it really be called a free market after all?
How do patients find out about the quality of the service they are about to receive? And how do they compare it with what other specialists may offer?
There is currently no easily accessible information about the percentage of successful (or unsuccessful) surgeries a specialist has performed.
There is also no evidence to show a link between a higher price for surgery and a better result for the patient.
So just because a specialist charges more, it doesn’t necessarily mean you’ll be better off for it.
Do patients have the ability to shop around and get quotes to make the best decision for them? And how do they know if the price they’re being quoted is reasonable or outrageous?
In most cases, it is not possible to call around clinics and get a quote for the surgery you need from reception. It usually requires an appointment and consultation, which could cost you each time you visit.
The Australian Medical Association (AMA) releases a list of recommended prices for all specialists’ services to its members – and many specialists refer to this when setting their prices.
This list is not available to the public. Instead, the Medicare Benefits Schedule, which is the price the government sets for each service, is available to the public.
But this price list has been frozen since 2013, without increasing with CPI and is known to be far lower than what specialists are charging in reality.
Do patients feel comfortable enough to ask for a discount once they get a quote?
When Karen was received her $14,000 breast reconstruction quote, she told her cancer specialist she couldn’t afford it. She then approached the plastic surgeon for her, who agreed to lower the price.
She says if her cancer specialist did not ask on her behalf, she would not have approached the plastic surgeon herself.
“I just think you’re intimidated by everything that you’re going through and you’re on this roller coaster and you don’t have an option.”
Kerry Ellis’ partner Glen was diagnosed with prostate cancer earlier this year. They were quoted $10,000 for surgery and had to borrow the money from Glen’s brother to pay for it.
“We were living hand to mouth… so just a consult was a struggle to make do, let alone $10,000. But all of a sudden, it wasn’t a question, I had to find it,” Kerry tells Jenny Brockie.
Kerry says she’s not afraid to bargain when shopping for anything else, but when it came to surgery for Glen, she was afraid challenging the surgeon would affect the care he was given.
“I would normally ask but I think maybe I was putting a dollar value on Glen’s head and that was not what I wanted to do… I was scared that, get on the wrong side of him and he's the guy that's supposed to get Glen well.”
There was an unspoken understanding that I shouldn’t ask, that it’s not appropriate to ask,” says Kerry.
So how do you navigate private health care to get a price you can afford?
The government recently pledged to create a website by the end of the year, allowing patients to view and compare the prices specialists are charging.
Health Economist Emily Callander says a website could help, but there are broader issues the private health system needs to address.
“I think a website with out-of-pocket fees and outcomes is essential but I think we also need to be thinking about if we really want care in Australia to be provided through the private market… or should we be looking at means to strengthen our public system more so it's provided more equitably and without lunging patients into financial ruin, essentially,” she tells Jenny Brockie.
And as many patients have shared on Insight, the system can be complicated and daunting, especially when you’re already facing the mental and physical impacts of a confronting diagnosis – so the added financial impact on top of that can have devastating effects.
Sarah Nix, 26, knows that impact all too well, having spent almost $30,000 on specialist consultations and surgeries after an endometriosis diagnosis two years ago.
“We purchased a home… and I had built quite a nice nest egg. My husband and I were planning on starting a family.”
We sold, went down to one car and burnt through all of that because of medical bills, then I had to rely on mum and dad.”
She says the out-of-pocket costs have left her with no choice but to have a hysterectomy.
Sarah tells Jenny, “If we keep going I'll lose house, I'll lose everything we've worked hard for, I don't want that.”