How to avoid surgery out-of-pocket costs


Tips on negotiating with your doctor and shopping around for a surgeon.

surgeon consulting with patient

Mind the gap


You may be more than a little surprised to learn that using private health insurance for surgery can expose you to thousands of dollars of out-of-pocket costs, while public patients enjoy the same treatments for free.

It may not be easy, but it is possible to find out upfront before booking surgery how much you'll be out of pocket for the surgeon's fees. And you 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.

Not sure how private health insurance gap schemes work? Read gap cover explained.

How to save on surgeons' fees

At the GP

  • Ask if there are likely to be any out-of-pocket costs with the surgeon they refer you to.
  • Ask the GP to suggest a number of specialists so you can call and check costs yourself.
  • Get the names of specialists who work in both the public and private system.
  • Ask for the approximate waiting times in your local public hospitals. Remember, just because you have private health insurance doesn't mean you can't be treated as a public patient to save yourself money.

Speak to your health fund

  • Ask if your policy covers the treatment you require and if you've served any waiting times. Tip: health funds may use different definitions for the same treatment than your specialist – especially in terms of what's minor surgery that's normally included in most policies, or major surgery which may be excluded if you haven't got top cover. Ask your GP or specialist for the Medicare item number and quote it to the health fund to be sure.
  • Ask if you have to pay an excess or co-payment.
  • Get a list of surgeons they have an agreement with.
  • Get a list of hospitals in your area they have an agreement with.

Shop around

  • Ask your friends and family if they can recommend a surgeon.
  • Armed with a list of names, make some calls. Be insistent and ask for a ballpark figure if the receptionist can't give you exact out-of-pocket costs.
  • One option might be to travel for treatment if you live in a geographical area with high costs, such as a regional area.

At the specialist

  • Talk about costs early on and explain to the surgeon if the costs are unaffordable for you.
  • If your specialist says they're unable to charge you under your health fund's gap scheme, ask if they would accept another health fund's gap scheme.
  • If you transfer from one health fund to another, they can't apply waiting periods for differences between medical gap schemes. But be careful to choose a policy that has the same cover level (for example, not one with a higher or lower excess) and covers the treatment you're scheduled for. Also, make sure the new fund has an agreement with the hospital your specialist uses. The CHOICE health insurance finder will help you find the best funds and policies for you. Our score includes a rating on the fund's gap performance.
  • Ask for the fees of any other doctors involved, such as an assistant surgeon or anaesthetist. If the specialist doesn't know, ask for the doctors' contact details and call them to find out.
  • Ask for a quote in writing.
Anaesthetist costs are in addition to surgeons' fees. Read anaesthesia bills and gap fees to learn more about out-of-pocket costs.

How to negotiate with your doctor

Your doctor can decide on a patient-to-patient basis if they charge you under your fund's gap agreement.

According to an AMA survey of their members, the vast majority of doctors take their patient's financial situation into account when setting their fee.

This could mean that with the same doctor for the same procedure:

  • pensioners and students are fully covered by the health fund.
  • full-time workers and self-funded retirees face out-of-pocket costs.
  • someone who is assertive and tells the doctor about their financial situation gets charged less than someone who stays silent.

But if you're sick, you may be in no mood to bargain, especially with a surgeon who may soon hold your life in their hands.

"Certainly an assertive consumer should not shy away from negotiating a fee with the surgeon and asking about no-gap arrangements. The reality is that many people don't feel confident and in any event may often be experiencing anxiety because of their condition and the looming operation," explains Leanne Wells, CEO of the Consumers' Health Forum.

This reflected the experience of one CHOICE member, who told us:

I was in great pain and not in a position to seek other opinions or quibble over costs.



But another member had a more positive experience:

The receptionist raised the matter [of costs], and I was pleased to know upfront.

Talk to the receptionist

The Private Health Insurance Ombudsman Michael Manthorpe suggests it might be better to talk to the surgeon's admin staff about costs rather than the surgeon. "The administrative staff at GP and specialist offices are accustomed to discussing fees and waiting times with patients," he says.

The best surgeon can also be the cheapest

Of course, you'd want the best surgeon, not just the cheapest, and the good news is they could be one and the same: "There's no evidence that links higher fees or lower fees to the quality or outcome of the service required by the patient," says Dr John Batten, president and chair of council and executive at the Royal Australasian College of Surgeons.

Resources to help you save on out-of-pocket costs

Find a health fund with better gap cover. The CHOICE health insurance comparison will help you find the best policy for your needs, and our score even includes a rating on the fund's gap performance.


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