The Medicare rebate is based on a lie: AMA fee list revealed
The AMA has for decades kept its fee list a secret but by revealing it to the public we have for the first time given patients a way to tell if their doctor is overcharging, writes Sue Dunlevy.
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THE chamber of medical secrets has been opened with News Corp’s publication of the AMA’s list of fees and the revelation goes some way to explaining why our medical system is broken.
In my 30 years as a health reporter I have never been allowed access to the list of AMA fees even though successive leaders of the peak medical group have argued it should be the benchmark for paying doctors.
In making the bulk of that list public today, News Corp has for the first time given patients a measure they can use to see if their specialist, surgeon or GP is overcharging.
The list dramatically illustrates how the reimbursement systems for our health care — Medicare and private health insurance — are not based on the true cost of delivering that care.
Its publication is important for three reasons.
Firstly it shows that Medicare rebates are based on a lie, they don’t come near reflecting the true cost of health services.
Secondly, it shows even health funds are not prepared to cover what the AMA says is the full cost of medical services despite getting $6.4 billion a year in subsidies from taxpayers.
Third, it shows some doctors are charging well in excess of the AMA fee and its time they were forced to explain to their patients why.
When Medicare was introduced in 1985 the Medicare rebates were set at 85 per cent of what doctors were charging.
But since then the Medicare Schedule of fees which is used to determine the Medicare rebate has not increased in line with medical inflation or kept pace with the growth in wages.
Successive federal governments have essentially been rationing health spending by indexing the Medicare fee below the rate of inflation to contain costs, worse still, the fees have not been indexed at all since 2014.
The reason the AMA fees are almost three times the Medicare fee is they have been adjusted for inflation and wage growth each year, this year they rose by just 1.86 per cent.
To illustrate how deficient the Medicare rebate system has become I can offer this example: This week when I called a plumber to fix my leaking toilet it cost me $170 for a 20 minute visit. Medicare says my GP, a health specialist with 12 years training, is worth $37 for a 20 minute consultation.
The AMA recommends doctors charge $79 for a 20 minute consult.
When Medicare fees don’t reflect the real cost of providing medical services patients are the losers because doctors will still raise their fees each year to cover inflation and patients end up paying gap fees. And even though health fund premiums are rising, their cover is becoming less valuable.
Patients whose GPs don’t bulk bill are now paying gap fees of $35, it costs patients $74 out of their pocket to visit a specialist and four in ten hip and knee replacements attract payments of up to $5,500.
The most important function of publishing this fee list is that for the first time patients have a benchmark they can use to understand whether their doctor is overcharging them.
And our analysis shows some doctors are charging well in excess of the fees their own organisation recommends as reasonable payment for their services.
The Royal Australasian College of Surgeons has been very clear that the size of a doctors fees bears no relation to their competence, and in fact the cheapest doctors often have the best outcomes.
Doctors who leave their patients with crippling medical gaps need to understand the devastating impact their charges can have on patient’s lives.
Today we showed how Australians have had their retirement nest eggs destroyed after they had to raid their superannuation to pay for medical gap fees.
Patients are also very bitter that after contributing to private health insurance for many decades it did not help them in their time of need.
The first step in ending these gap fees is to provide some transparency about what doctors should be charging and we hope we’ve started that process.
Before you sign up for surgery check out the AMA and Medicare fees via out doctors fee tool and demand your doctor explains if he or she wants to charge you above the AMA rate.
Sue Dunlevy is News Corp’s national health reporter.
Originally published as The Medicare rebate is based on a lie: AMA fee list revealed