Medicare is now covering just over half of specialist fees, forcing Australians to increasingly dip into their own pockets and delay vital care as experts warn Medicare rebates have become “almost meaningless”.
Medicare funding for specialist provider fees dropped to an all-time low of 52 per cent between January and March, according to data from the Australian Institute of Health and Welfare (AIHW), down from 72 per cent two decades ago.
There was a slight bump to 55 per cent in July. However, overall the data shows Medicare’s contribution to specialist fees — not including surgery — is on a downward trend, attributed to a faster growth in provider fees than Medicare benefits.
Gino Pecoraro, the president of National Association of Specialist Obstetricians and Gynaecologists (NASOG), said the Medicare rebate had not kept pace with inflation.
“Over time, the Medicare rebates fall further and further behind, so that we see now they’re almost meaningless when it comes to accessing care,” he said.
“It is so far out of touch with what it actually costs to access the services that it doesn’t provide any degree of comfort to the patients who have to purchase these services.”
Expectant parents are particularly impacted, with just 39 per cent of obstetric costs covered by Medicare in July, compared to 60 per cent in 2009.
Dr Pecoraro said there were several reasons the gap was wider for obstetrics, including high insurance costs for obstetricians.
“There’s been a historical lack of funding for women’s health and that’s federal government-sanctioned gender-based unfairness,” he said.
“The Medicare rebates for women’s health issues are notoriously undervalued and paid less than for men’s health.”
After being unable to access a publicly funded midwifery program in the regional Victorian town of Wodonga, Danielle Tooley had to fork out hundreds of dollars for private appointments and scans during her second pregnancy.
“It was an additional stress, I think, because it was very unexpected,” she said.
“It is a concern because if you have a complication in your pregnancy, you do have to pay a lot more money for more regular appointments and scans, and there’s probably a lot of women out there who just can’t afford to pay that.
“They’re putting themselves and their unborn babies at risk because they just can’t financially afford to have these appointments.”
The Grattan Institute’s health program director, Peter Breadon, said widespread specialist shortages exacerbated the issue.
“These fees probably aren’t a big surprise because you’ve got some constraints on the supply of specialists and no-one regulates their fees,” he said.
“It’s really hard for patients to know the fees ahead or to evaluate the quality of care and, particularly in rural areas, there’s just hardly any specialists in many cases.”
A growing number of Australians delay care due to cost
Out-of-pocket specialist costs have long been an issue for Australians, but according to the Grattan Institute they have increased by an average of more than 50 per cent in real terms in the decade since 2012.
AIHW figures show $2.3 billion in out-of-pocket costs were paid by private patients in 2022-23 for specialist consultations, with patients paying the most for obstetrics and gynaecology, anaesthetics, psychiatry, dermatology and ophthalmology.
Those fees are a major barrier to healthcare access in Australia, with more people delaying care on the back of cost-of-living concerns.
More than 10 per cent of Australians aged over 15 delayed seeing a medical specialist when they needed to in 2022-23 because of the cost, Australian Bureau of Statistics data showed, compared to 8 per cent the year before.
Those who cannot afford private fees are left to languish on public waitlists, with the ABC last year revealing some Australians are forced to wait longer than six years to see crucial specialists like neurosurgeons.
People are also being forced to turn to crowdfunding or dip into their superannuation for help with exorbitant medical costs.
Australian Medical Association president Steve Robson called for the rebates to be increased to make health care more accessible.
“Increases in the Medicare rebate have gone up, sometimes, not at all … or perhaps 1 or 2 per cent a year, whereas the costs of providing care by doctors has gone up, sometimes, as much as 7-10 per cent in a year,” he said.
“So there’s a huge gap between what Medicare will give back to a patient and what it costs to provide the care.”
Cost of inaction is ‘really significant’
But Peter Breadon from the Grattan Institute argued a rebate increase in isolation would likely not help.
“In the past when rebates have gone up, patient fees haven’t actually gone down,” he said.
“There are some deeper structural problems that have to be addressed here.”
He said solutions to the problem included boosting the supply of specialists, expanding public care for people who could not afford private fees, and increasing transparency around how much specialists charged.
The federal government is prohibited from regulating specialist fees under the constitution, but Mr Breadon says it can punish the “minority of specialists who charge really extreme, high fees” by stripping them of rebates altogether.
“The government has to look at how to crack down on them because in many cases these fees are double or triple the rebate level,” he said.
“Bringing that rebate up a bit won’t address those outliers who are charging really extreme fees.”
He said the cost of inaction was too great to ignore.
“There’s no doubt that patients waiting too long to see a specialist damages their health in many cases, and that has flow-on effects of them getting sicker, potentially going to hospital, maybe dropping out of the workforce,” he said.
“So the costs for individuals and their families and the health system and the broader economy are really significant.
“The problem we’re seeing is almost entirely predictable. This is a market that is failing, and that’s why governments really need to step in.”
Health Minister Mark Butler said in a statement that all Australians deserved access to affordable health care.
“The private health sector, including insurers and specialists, need to do more to protect patients from exorbitant bills,” he said.
“This year’s increase to Medicare rebates is the second largest increase in the past 30 years, the largest increase was last year.”
He added that the government was committed to working with consumers, doctors and private health providers to improve transparency of out-of-pocket costs for specialist services.
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