Make specialists charging 'extreme fees' pay back the Medicare rebates, Grattan Institute says

Specialists routinely charging so-called ‘extreme fees’ should be forced to pay back all Medicare funding at the end of the year, a new report says.

The Grattan Institute released a 100-page assessment on access to specialist care this morning, saying the current system has become a lottery.

Called Special Treatment, it suggests governments should set up new systems for GPs to seek written advice from specialists, saying such a move could cut 68,000 referrals to specialists each year.

But the report takes particular aim at what it describes as “extreme fee chargers” which the Grattan Institute defines as doctors whose fees are typically three times the average MBS scheduled fee.

“A single consultation with an extreme fee-charging psychiatrist was $670 in 2023, and $350 for endocrinologists and cardiologists,” the report said.

It said some 240,000 patients saw a dermatologist charging an extreme fee in 2023, with 132,000 patients seeing an extreme-fee obstetrician or gynaecologist, and 92,000 patients seeing an extreme-fee ear, nose and throat specialist.

Overall, there were six specialties where more initial consults attracted an “extreme fee” than were bulk-billed; with more than a third of initial dermatology consults charged at more than triple the schedule fee.

“There is no good reason for these extreme fees,” claimed the report, co-authored by Peter Breadon, Health Program Director at the Grattan Institute.

“They aren’t needed for specialists to be fairly compensated for their skills, or to provide quality care.

“They don’t cross-subsidise care for poorer patients. But they do stop people from getting care they need. And most patients lack the information or ability to shop around to avoid them.”

It called on the Federal Government to amend the regulations for referrals so they included a “prominent and easy-to-understand statement” that patients could use as an alternative to the specialist named on their referral.

The statement would also include a link to the Medical Costs Finder website.

It dismissed the idea of introducing bulk-billing incentives for non-GP specialists saying it would be too costly and would probably have limited overall impact.

However, it said that specialists who charged extreme fees should be required to repay the government the value of the Medicare rebates paid for their services that year.

“The government should publish a list of extreme-fee specialists, to give patients and GPs more information and discourage extreme fees.

“If current practices were continued, we estimate this would affect fewer than 1500 specialists across 29 specialties — less than 4% of all specialists.

“Dermatology, O&G, and sport and exercise medicine have the highest share of specialists who would be affected. But even in these fields, most specialists would be unaffected.”

The Grattan Institute estimated the measure would raise up to $170 million a year which could then help pay for an expansion of public clinics.

In terms of reducing the number of GP referrals, the report suggests creating “secondary consultation systems” where GPs submit clinical questions, possibly through a web portal.

State governments would engage public hospitals to deliver secondary consultations with the hospitals rostering specialists to staff the system.

“At present, GPs have few easy options for getting a second opinion,” the report stated.

“They must use their own professional network or independently find the right support. And they are not directly paid for time spent planning or discussing complex care with other doctors.

“As a result, GPs may refer patients to specialists even when they could manage their care more quickly, more cheaply, and just as well, with some quick advice.

“This adds cost and time for patients who don’t actually need a referral, and adds to wait times for those who do.”

Secondary consult systems have been set up in Canada, referring to the Champlain eConsult BASE scheme.

“GPs provide patient information and ask clinical questions through a web-based platform. The case is assigned to a specialist, who replies with recommendations within a week.

“It is available to all GPs and patients in active regions, and covers 152 specialty groups.”

The Grattan report said up to 60% of planned specialist referrals can be managed by GPs with the advice provided.

If introduced in Australia, where the Federal Government funded the time GPs spent using the system, some 68,000 specialist referrals a year would be avoided, the report claimed.