The report: Ministerial advisory committee on out-of-pocket costs

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The ministerial advisory committee on out-of-pocket costs considered a range of options before recommending the creation of a government-funded website and education campaign.

Health minister Greg Hunt announced the formation of the committee, comprised of key stakeholder groups, in 2017 in response to rising consumer concern over out-of-pocket costs.

The report says the committee's creation was informed by a consumer survey conducted by the Department of Health in 2015 and other previous research that found 35.6 per cent of patients are experiencing out-of-pocket costs varying from a few hundred dollars to tens of thousands of dollars.

"This is, however, likely to be an underestimate of the proportion of patients experiencing out-of-pocket costs as some patients will have been charged additional booking or administrative fees," it says.

The survey, which received over 40,000 responses, found consumers were concerned about being left with large out-of-pocket costs and not knowing what those costs would be. According to the committee's report, out-of-pocket costs have "historically" been "proportionate and adjusted to the financial circumstances of the consumer."

"It is apparent that, more recently, a minority of medical specialists have been charging very large fees, including to patients on low incomes," it says, adding that the committee expressed "serious concerns about such egregious charging" and "noted also the cumulative financial impact of more modest charges."

It also "expressed strong concerns" about the practice of charging ‘hidden’ administrative or booking fees. These fees are not disclosed to Medicare or private health insurers and circumvent the requirements of the ‘no’ or ‘known’ gap private health insurance arrangements.

"The Committee was of the view that all charges from a given provider, for an admitted clinical episode, should be provided on a single bill," it says.

It recommended the creation of a government-funded website to include "all or some" of the following features:

  • individual medical specialists’ costs for most common services, searchable by medical specialist and with the data populated by specialists; and,
  • the range of specialists costs for common services, searchable by specialty and geographic region, using data from existing government sources.

It also recommended education for consumers, GPs and medical specialists to improve understanding of out-of-pocket costs.

"In particular, a concerted education campaign is required to inform consumers that there is not necessarily any relationship between fees charged and the quality of medical care," it says.

One option considered but not recommended was the creation of government-funded website showing historical fee information covering the MBS items for consultations and those that makeup 80 per cent of the volume of Medicare services provided by each medical specialist in the previous 12 months.

"Information would be extracted from existing datasets (e.g. MBS and Hospital Casemix Protocol) and identify individual outof-pocket costs where possible. Medical specialists could be asked to commit to not exceed these historical fees by more than an agreed percentage, but this would be likely to attract significant concerns from medical specialists," it says.

The report says, despite initially being seen as the simplest option, "the Committee decided not to further consider this option, due to the issues around data completeness and data access."