Health funds commentary on the value of your services

There is much more to the anaesthetists’ role than sending a patient to sleep. Patients need to consider which doctors are right for them – not simply shop around for the cheapest deal. Unfortunately, health funds are not focused on delivering the right information to their members. Rather than provide some sort of critical appraisal, patient feedback on quality or information about a doctors’ practice, the focus of the health funds seems to be centred on the fees doctors charge for their services.

A recent article in the Advertiser Adelaide (23rd August) illustrates just how much doctors are failing to get their position out there. The article (image below) quotes Terry Barnes (the former Abbott advisor behind the $7 GP levy) who stated on Twitter that he was out of pocket $600 (after Medicare and health fund rebates) when his anaesthetist charged four times the Medicare schedule fee.

On my estimate, this suggests the anaesthetist charged a fee in the order of $80/unit. Barnes wants the government and the AMA to cap doctors to the level of the AMA fee which is, in fact, in the order of four times the Medicare schedule fee! Health funds have the resources to market their messages aggressively and, in this case, it leads to patients being misinformed.

In my view, this misinformation sets inappropriate expectations in the market. In the latest edition of the ASA magazine, Dr James Miller noted as follows: The recent ANZCA community survey discussed by Dr Roberts found only 50% of respondents thought that anaesthetists were doctors, irrespective of the fact that 96% reported to have had some experience of general anaesthesia. Of those who were aware that anaesthetists are doctors, only 41% knew we have the same training and qualifications as other specialists. This supports my view that you should take every opportunity you are afforded to educate your patients about you as an anaesthetist and your role in the management of their care.

In conclusion, health funds are able to influence the market and patient perception with aggressive tactics and large marketing budgets. The only way that you can combat that is in your one-on-one interactions with patients.  Treat those interactions as an opportunity to inform and educate patients about your role as an anaesthetist and outline the critical tasks you perform in managing their care.

The only way to address the fact that external stakeholders are trying to turn the debate in their favour is for the anaesthetic community to accept responsibility to educate and inform patients.



5 replies
  1. Malcolm Thompson
    Malcolm Thompson says:

    a. I have pretty strong feelings on the way Health Funds are operating currently so thought I would add my 50c!

    To my mind the issue is the reneging on full value of health fund rebate when a practitioner does not play ball with whatever Gap Cover arrangements the funds have set up. I consider this ‘rebate saving’ by the funds should be adjudged illegal.

    Consider if I were a patient with a given risk charged a certain premium by my health fund.
    I need an operation… if I go to anesthetist A I get a no gap payment service, if I go to anesthetist B I have a gap to pay because anesthetist B does not provide a no gap service in the context required by the fund.. Now the illegal bit I feel is that regardless of gap provision the health fund has agreed to cover me and charged me a certain fee (premium) to do so. Therefore their rebate should be the same regardless of the bill from the anesthetist; none of this copping out to only cover 100% of the MBS fee.
    If this were to happen to me as a patient I would be asking for the % reduction in rebate back ie Health fund Schedule fee- MBS fee / Health Fund Schedule Fee x premium returned.

    High time this practice was challenged in court I believe.
    Malcolm Thompson

    • Ben Dudley
      Ben Dudley says:

      Thanks for your thoughtful comments.

      This is a topic that I have felt strongly about for some time.

      To confirm my understanding of your email:

      It is inappropriate that a health fund should choose to apply their “Gap Cover” amount only if the doctor chooses to accept this amount as full payment for their service.

      If the doctor chooses to charge an amount of their own choosing (which is more than the health fund’s “Gap Cover” amount) and the health fund then elects to pay only the MBS + 25% (being the legislated minimum they must pay), then the patient should get some of the reduced amount the health fund pays back in the form a proportionally reduced premium.

      We wholeheartedly agree that it is inappropriate that some health funds pay different amounts based on what the doctor charges.

      The funds have successfully co-opted the term “Gap Cover” so that patients think their fund is covering the gap. However, the amount the health fund calls the gap is different to what everyone else calls the gap.

      The health funds’ gap is the difference between the MBS + 25% and their nominated amount.

      By contrast, everyone else just treats the out-of-pocket amount as the gap.

      The health funds have been so successful in positioning themselves as covering the gap (that is, their gap) that patients get quite upset when they discover that they will still have to pay some additional amount themselves.

      We experience this on a daily basis. When obtaining informed financial consent on behalf of our doctors, patients often dispute that they should be charged a gap or complain about the size of the gap.

      Just imagine how loud the complaints would be if all anesthetists adopted what Terry Barnes suggested and charged AMA rates!



  2. Malcolm Thompson
    Malcolm Thompson says:

    Hi Ben
    So yes my argument is as you outline in the first paragraph of your reply.
    I would not for a moment expect the health funds to roll over and
    accept a policy holder’s request for the prorata difference between their ‘GapCover fee’ and the MBS + 25% they pay out when a practitioner exceeds this fee, be refunded off their premium. But they should! My point is that two patients pay an equal premium but do not receive the same rebate for the same service provided.
    The effective ‘Gap’ is then actually increased by their actions.


  3. Terry Barnes
    Terry Barnes says:

    I’ve just come across your commentary, thank you. I was annoyed because I was ripped off by an anaesthetist of whom I had no say in the choice (the proceduralist wanted her in absence of his usual gasbagger), I was given a cursory pre-anaesthetic once-over in which she complained I called her by her name and not “Doctor” and for whose account I was offered no Informed Financial Consent for a money-for-jam non-emergency procedure. I now understand that she used the AMA schedule/RVG to set her fee, but that doesn’t make her any less culpable for treating me with contempt as her paying customer. She could have used a no-gap deal with my insurer and still made a pretty penny, but no, she presumably subscribes to the myth that there is a special relationship between doctor and patient that must be honoured in the overcharging.

    My point in my AFR article and subsequent comments was, simply, if the AMA rates are considered reasonable by the profession, then anything higher is ipso facto unreasonable – the deeper point is that if you want to derive income via public subsidy, and whatever the appropriate benchmarks, it is reasonable to ask in return that patient OOPs are capped at a reasonable and fair level. After all, given the millions of dollars taxpayers spend on your specialist training that gives specialist their special social status and earning capacity, they should be bloody grateful instead of constantly whingeing how little they get from Medicare and PHI!

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