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Out-of-pocket puzzle

CHOICE calls for reform to help private patients avoid out-of-pocket pain

11 December 2017

Consumer group CHOICE is calling for reform to help clear up the confusion around out-of-pocket costs for common surgeries.

"Despite paying increasing health insurance premiums each year, it can come as a rude shock to private hospital patients when they're slugged with hefty medical bills if they need surgery," says CHOICE Director of Campaigns and Communications, Erin Turner.

"What's worse, working out how much you'll be out of pocket to avoid such costs can be completely perplexing and sometimes impossible."

A CHOICE mystery shop of 60 surgeons' offices around Australia found just 17[1] would give a clear indication of the out-of-pocket costs for a single knee replacement, cataract surgery or tonsil removal.

"One-third of the surgeon's receptionists wouldn't help with a cost estimate, with a small number even declining to make an appointment without getting a faxed referral from the GP. This means patients need to spend even more time and money shopping around than if they had the costs upfront," says Ms Turner.

"With the average gap payment for knee surgery varying from $397 for South Australian patients to a staggering $2600 for ACT patients, consumers deserve to know how much they will have to fork out.

"There's also no evidence of any link between the cost of a medical procedure and its quality or outcome. In short, you could be thousands of dollars out-of-pocket at a pricey specialist and have a worse outcome than you would from a specialist who charges a lower fee that's fully covered by your private health insurance," says Ms Turner.

"Instead of being left powerless when they're sick or at their most vulnerable, better transparency within the industry would help people know what to expect."

CHOICE is calling on doctors and the health insurance industry to provide better information to consumers to help them shop around.

"Right now, people aren't able to easily control their health costs when they use the private system. The system needs to change to give patients clear information at the right time, not when it's convenient for surgeons, hospitals or health insurers.

"Patients in need of surgery are vulnerable and might be in pain, it's difficult for them to shop around and bargain with a doctor who soon holds their life in their hands. That's why we need a better system that protects patients getting surgery in the private system," says Ms Turner.

"Average prices for common procedures such as knee replacement surgery, gall bladder, colonoscopy and tonsils should be publicly available. People should be able to find out before waiting weeks or months for an appointment if the surgeon is likely to charge them an out-of-pocket cost.

CHOICE is also urging health funds to be more transparent and make it easier for consumers to compare between them.

"The amount health funds pay surgeons for the same procedures varies, so while you might pay no or low out-of-pocket costs with one insurer, you might be out hundreds of dollars with another," says Ms Turner.

How to save money on surgeons' fees

  • Ask your GP if there are likely to be any out-of-pocket costs with the surgeon they refer you to.
  • Ask your GP for the names of a range of specialists so you can call and compare before making an appointment
  • Ask your health fund if you have to pay an excess or co-payment, and which surgeons your insurer has agreements with
  • Talk about costs early on with your surgeon, including fees for any other doctors involved such as an assistant surgeon and anesthetist

Media contact:

Stefanie Menezes, CHOICE Media and Communications Advisor: 0430 172 669