Private health insurance patients can save a lot of money if you're prepared to negotiate with a doctor or shop around to get a better deal for surgery.
First, you'll need to know upfront your surgeon's fees, and how much you'll be out-of-pocket under your health insurance policy – also known as your 'gap cost'.
But how easy is it to get this information? We decided to find out.
What will my surgery cost?
To check what information you can get from a surgeon's receptionist before committing to an appointment, two CHOICE staffers called 60 surgeons' offices around Australia:
- 20 surgeons' receptionists were each asked for the out-of-pocket costs for a knee replacement, cataract surgery and tonsils.
- We said we had private health insurance and were fully covered for the procedure.
- We were insistent and did ask twice if we didn't get a straight answer.
We didn't normally have a problem getting a quote for the consultation, but it was a different story when we asked for the out-of-pocket costs for the surgery:
- 38 of the 60 receptionists told us if there would be a gap or no extra cost for the surgeon.
- Eight gave us a vague, ballpark figure.
- 30 gave a more detailed answer and of those, 17 gave us a clear indication of the cost including eight who said there wouldn't be a gap and five who said there'd be a $500 known gap.
- 22 didn't help us. Of those, a small number even declined to make an appointment before getting a fax from our GP.
Our mystery shop shows that while it's worthwhile to ask questions before you book your appointment, there's still a lack of transparency. Shopping around can help, but you often only get a clear answer after waiting weeks or months for an appointment. At that point, you may be in too much pain or discomfort to do anything but accept the costs.
There's also a large power imbalance between a patient and a surgeon. You aren't shopping for a washing machine that you can walk away from, you're looking for someone you can trust to restore your health and quality of life.
Greater transparency needed
"Gap costs, especially if they're higher than expected or even a surprise, are a common frustration for consumers with the health insurance market. True reform is needed to clear up consumer confusion," says Erin Turner, CHOICE director, campaigns and communications.
While there's no silver bullet, transparency would help consumers know what to expect instead of being left powerless and uninformed when they're sick and often at their most vulnerable.
We think more research and investigation is needed, but the following measures would be a good first step:
- Out-of-pocket cost information should be provided directly to GPs.
- GPs and health insurers should provide information to consumers that empowers them to shop around.
- Insurers should make their no-gap and known-gap thresholds for common procedures more accessible for consumers. Bupa and HCF have done good work in this area, and Medibank's and the Royal Australasian College of Surgeons' (RACS) analysis of claims data is helpful, but a more consistent approach is needed so consumers can easily compare between insurers.
- Average prices for common procedures should be publicly available to consumers.
- Specialists' average pricing needs to be more transparent. For example, consumers need to be able to find out before the appointment if the surgeon will usually accept the no- or known-gap amount from their health fund. And, if the surgeon only uses gap agreements for some of their patients, such as for those with a concession card, their criteria should be disclosed upfront.
CHOICE members on gap costs
We conducted a survey in October 2017 of 697 members who reported their experience or their close family member's experience with surgery.
- 98% of respondents had private health insurance.
- Almost 90% of those were covered for the procedure.
- 68% paid a gap.
We wanted to find out how comfortable CHOICE members are with asking their surgeon about costs:
- 42% said they felt uncomfortable talking about costs.
- 24% said they were somewhat comfortable.
- 34% said they were comfortable.
These comments from CHOICE members show why this can be a difficult conversation to have:
- "I want them to do a good job, not upset them."
- "I asked my private health fund if they knew if my surgeon charged out-of-pocket fees. They advised me to negotiate with the surgeon to only charge me the scheduled fee! I was astounded that they would suggest such a thing – that I should barter with the person who was going to operate on my life-threatening cancer. A ridiculous idea."
- "I was in great pain and not in a position to seek other opinions or quibble over costs."
However, some members had good experiences to report:
- "I rang him to ask what I would have to pay, and he told me exactly how much my out-of-pocket cost would be. He was polite, straightforward and accurate, and the gap was manageable."
- "When I booked in for the surgery, the receptionist asked about my health cover and then told me how much extra it would cost, $250. The receptionist raised the matter, and I was pleased to know upfront. I was asked if I was happy to pay that. I paid the extra after the surgery. I thought it was professionally handled and was clear. I didn't have to work it out. The receptionist arranged the payment from the health fund to themselves."