Ben Harris spoke with ABC Radio Sydney about out-of-pocket costs

30 Jan 2024Interviews and Transcripts

Transcript

Station: ABC Radio Sydney
Program: Breakfast
Date: 31/1/2024
Time: 7:38 AM
Compere: Craig Reucassel

Interviewee: Ben Harris, Director of Policy and Research, Private Healthcare Australia

CRAIG REUCASSEL:	New data out today from Private Health Australia[sic], the peak body for private health funds. It shows that the median out-of-pocket costs for Australians have, in common procedures funded by their health insurance, have increased by up to 300 per cent over the past five years. Some of the procedures include hip and knee replacements. Others are things like for angiograms and other medical things that we’ve discovered I can’t say, so I’m not going to try to. They’ve grown from $50 to $200. Other investigation procedures and surgeries are on the list as well. Private Health Australia are calling for more oversight on billing to protect patients from surprise fees. Ben Harris is the director of policy and research at Private Healthcare Australia, and he joins us now. Thank you for joining us, Ben.
BEN HARRIS:	Good morning, Craig.
CRAIG REUCASSEL:	So just- so I can understand, you’re the peak body for private health funds. What’s your concern? So you’re not in charge of these fees going up. These are, what, being charged by doctors. Is that what’s going on here?
BEN HARRIS:	That’s right, Craig. So private health insurance supports people when they need a procedure like a hip replacement. There are doctor charges, there’s a device charge and hospital charges. So a typical hip replacement costs $24,000 last financial year. Medicare pays the doctor $1865 on average, and the insurer pays around $22,000. But what we’ve seen with hip replacements is the median out-of-pocket costs that consumers are paying directly has increased from $419 to $655.
CRAIG REUCASSEL:	Yeah.
BEN HARRIS:	We looked at the top ten procedures which are done in private hospitals covered by private health insurance -nine of them had an increase in the median out-of-pocket cost over the last five years.
CRAIG REUCASSEL:	Okay, it’s interesting. If you’re saying that a hip replacement is around $24,000, insurer is paying $22,000, 1865 for Medicare, an increase from 419 to 655 – I mean, the increase overall of $200 amongst 24,000 is not actually a huge increase here. Like, are you saying that doctors are being greedy here, or what’s your concern?
BEN HARRIS:	I’m not saying doctors are being greedy. Some doctors charge a lot more than others. Look, the cost increases to the consumer are real. So the- where you’ve got a increase in the overall cost, everyone sees that in their premiums. And while premiums haven’t increased by as much as inflation over the last couple of years, every extra dollar in a premium hurts some- hurts. But we’re also seeing doctors working less, and we’ve also got- and they’re charging more per procedure. But we’re also seeing inflation across the economy. But what we’re really worried about is people paying extra out-of-pocket costs. So while you get insurance to cover the cost of the procedure – and in the case of a hip replacement, that’s substantial – but an increase in out-of-pocket costs, even from $400 to $600, does hurt. So there are a couple of things we’re looking for here. One is I’d like your listeners to be aware of the Medical Costs Finder website which the Federal Government runs. That actually- that will help you work out what the typical costs are. And the government wants every doctor to put their prices on that website. Unfortunately…
CRAIG REUCASSEL:	[Interrupts] It’s not compulsory though, is it, unfortunately?
BEN HARRIS:	We’ve got less than 100 doctors on there at the moment out of tens of thousands. So we are expecting the government at some stage to increase the transparency. But the other thing, what we’ve been finding is even though most doctors do a really good job telling patients what their costs will be, we still have people who are shocked by bills they’re not expecting. And in the United States, we’ve got- they’ve got some really good legislation called surprise billing legislation. And that means if you are not told you are going to get an out-of-pocket cost, you don’t have to pay it.
CRAIG REUCASSEL:	Yeah, okay…
BEN HARRIS:	So in the Australian context, if we’re able to say to doctors: hey, you didn’t tell me about this cost, I’m not going to pay it, the doctor still gets paid by Medicare. The doctor still gets paid by the health insurer. But those large, unexpected out-of-pocket costs are a real problem for consumers.
CRAIG REUCASSEL:	And this is a big concern. Now, the reason that Private Healthcare Australia presumably is concerned about out-of-pocket expenses is that the higher they are, the less likely people are to continue paying private health insurance. I mean, I know of friends who have private health insurance, but when they go to the hospital, they say: no, I am a public patient. And they say that because often being with private healthcare opens you up to larger expenses in the end. Now, isn’t this a massive concern for the business model of private healthcare?
BEN HARRIS:	Absolutely. And private health insurance is heavily regulated by the government, and so there’s some things we can control and some things are government controls. But if- basically, people get private health insurance to make the peace of mind and to make sure they can get care when they need it. So for planned surgery like a cataract, hip surgery or something like a mental health admission, it’s really important people have choice, and people are prepared to pay private health insurance to have their choice so they can get the care they need when they need it.
CRAIG REUCASSEL:	Yeah. Now just quickly, Brad’s on the line. Brad, you have private health insurance. What’s your concern with it?
CALLER BRAD:	Yeah. I think for me the problem is that the out-of-pocket expenses begin right from the initial consultation with the private specialist, because that’s not touched at all by my private health insurance. And it’s only at the point that I might be admitted into a hospital for a procedure that the private health insurance kicks in. So can you tell me, why is it that I’m not covered by my private health insurance from that initial consultation? Because in the UK, when I lived there, I was covered from the initial consultation through to a procedure and any follow up procedure- follow up consultation right through. What’s going on in Australia?
CRAIG REUCASSEL:	Good question, Brad. We’ve got Ben Harris here, he’s the director of policy and research at Private Healthcare Australia. Do you have an answer for Brad, Ben?
BEN HARRIS:	Yeah, thanks, Brad. It’s a really good question and a really common one. And the answer is the law prohibits us from covering anything that’s not done in a hospital or a hospital substitute. So that initial consultation from a surgeon, a physician or a psychiatrist, we are not allowed to cover by law. Now, that’s a major problem because it means that the- as you say, Brad, the out-of-pocket costs start at the front end. And if we were able to cover the entire length of an admission from an initial consultation through, then that would actually help us control our costs a lot more because we could front end. And a lot of the time going to hospital is not a great option for people, and if we could do more out of hospital that would actually help both consumers but also help us.
CRAIG REUCASSEL:	So, Brad, it sounds like that might be something to take up with your local politician there.
CALLER BRAD:	Sounds like it. I’ll be doing that.
CRAIG REUCASSEL:	You’ll be doing that. Good on you. Thanks so much, Brad, for your call. So just in terms of this, Ben, as you say, these costs are going up. Do private health companies have any ability to restrict what is charged by a doctor, or does the government have any ability to, restrict this? You know, is- does it need some kind of change to the rules?
BEN HARRIS:	So the short answer is no. Doctors can charge whatever they like. We actually enter into agreements with doctors to limit out-of-pocket costs. So we have to pay some money, but we often pay a lot more money to doctors in exchange for no out-of-pocket costs. So for a hip replacement, for example, we have to pay $200. We often pay $1800 on average, and the deal there is we will pay more if the doctor does not charge an out-of-pocket cost.
CRAIG REUCASSEL:	Yeah, okay.
BEN HARRIS:	But we are seeing some evidence where doctors are charging outside of that. So they’re charging an administration fee, a booking fee or something they don’t tell us about and they don’t tell the government about, which means consumers are paying more and the figures aren’t reflecting that. So…
CRAIG REUCASSEL:	[Talks over] Nothing like an admin fee. Just quickly, Janet’s given us a call. Janet, you’re paying for out-of-pocket expenses. What’s your experience of this?
CALLER JANET:	So I’m going in to have surgery on my turbinates, which is around your sinus area to support my breathing, which is pretty essential. And they’re being up front with what the costs are. So by the time I pay my hospital excess, the surgeon’s additional fees and the anaesthetist’s additional fees, and I say additional because Medicare had the basic charge they have, and there’s a maximum that you can get back from that combined with the health insurer. And it’s nearly $3000 out-of-pocket, and it’s…
CRAIG REUCASSEL:	[Talks over] $3,000 out-of-pocket, and that’s because you’re on private health insurance. Did you explore the option of going the public option, or you just couldn’t get it done?
CALLER JANET:	No. There’s no way that I’d be getting that done through public just from the perspective of how long the waiting list are, it’s definitely elective surgery. I’m able to pay that, and so- I mean, look, I actually work in public health. I would have no issue going through that. My experience has always been really positive in public health systems, but I recognise that this is something that I’m choosing to have done, but that for me is essential for my wellbeing. But the- realistically, the surgeon can charge whatever he wants. He’s good, so I- when you’re having something like that done, you do want to go with someone who is recommended and will do a good job.
CRAIG REUCASSEL:	Yeah, absolutely.
CALLER JANET:	Their cost is exorbitant.
CRAIG REUCASSEL:	It is, $3,000 is a lot of money. And I guess, Ben Harris, the director of policy and research at Private Healthcare Australia, this is the issue. You hear Janet’s story there and she’s going with private health insurance because it’s the only way she can get it done now. But it does open up larger expenses. Is that perception what you’re concerned about?
BEN HARRIS:	Absolutely. And Janet, as you know in the public system for sinus surgery, the average wait times are among the highest of any procedure, and in most states they’re over 400 days. So Janet’s made a choice to get the surgery done earlier because she really needs it. But that issue around a large out-of-pocket cost of $3,000, it does concern us. And there’s obviously an excess with the insurance, like an excess with car insurance, which you need to set at $700 or zero, depending on what cover you’ve got. But those costs from the surgeon, the anaesthetists, occasionally there’s an assistant surgeon. We need to make sure that those are as low as possible. But the other issue is we need to make sure that what Janet’s been told, that’s going to be $3,000 Is it. And the surprise billing legislation we would like to see in would say that if Janet gets an extra bill which she wasn’t expecting, which can happen, that she’s not liable for any more out-of-pocket costs.
CRAIG REUCASSEL:	Yeah, understood. Okay, so that’s an interesting new approach. Thanks, Janet, for your call. Good luck with the surgery. And if they hit you up for more than 3000, get back to us because that would, I guess, fall under what Ben’s talking about here.
CALLER JANET:	I will, but I hope they don’t.
CRAIG REUCASSEL:	Yeah, I desperately hope they do don’t as well. Thanks so much Janet, there. And thanks also to Ben Harris for joining us, director of policy and research at Private Healthcare Australia.
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