Surgery fees: Australian patients better off flying interstate to save up to $10,000 for procedures

Australians are paying gap fees as high as $10,000. Use our online tool to see how you’re being gouged and where you can get a cheaper surgery.

Exclusive: It’s now so much cheaper for some patients to fly interstate to have surgery they could save up to $10,000, a stunning analysis of Medicare and private insurance data has found.

Privately insured Australians are having to raid their superannuation and get financial help from relatives because health fund rebates no longer cover the prices greedy surgeons charge.

And the problem has just got worse with cardiothoracic and cardiovascular surgeons trying to make up lost income due to Covid-19 surgery bans hiking their fees by 28 per cent.

If you live in NSW and need a hip or knee replacement or radical prostatectomy and are insured with Bupa you could be up to $10,000 better off flying to Victoria or South Australia to have the surgery.

Despite paying the Medicare levy and health fund premiums, it can be revealed members paid $744 million in gap fees not covered by their health fund or Medicare in the 12 months to March this year.

People are now better off flying interstate as the cost of surgeries soar.. Picture: NCA NewsWire / Jenny Evans

Medicare can’t cover all costs, but the gap is getting larger. Picture: AAP

The insight into crippling medical gap fees comes from exclusive analysis of the federal government’s Medical Cost Finder tool and various health fund fee calculators.

The most costly procedure to patients is post weight loss surgery to remove excess skin.

In some states, one in ten patients are charged $12,000 in out of pocket fees for this surgery.

The typical fees amount to $6700 but if you shop around some fees are as low as $3200.

These fees, outlined on the government website, are a grouping of the costs for all doctors involved in the procedures, including anaesthetists and assistant surgeons.

Vulnerable cancer patients are also being taken advantage of by overcharging doctors.

In NSW, one in ten prostate cancer patients pay more than $15,000 for a radical prostatectomy leaving them $11,000 out of pocket after health fund and Medicare rebates.

Breast reconstruction after cancer treatment or to prevent cancer is leaving one in ten women $8000 out of pocket and half pay over $3500 out of pocket.

Hip replacements are costing some patients up to $9000 in gap fees because surgeons are charging $15,000.

FIND THE CHEAPEST SURGERY: USE OUR ONLINE TOOL

Doctors blame growing out of pocket fees on a six year freeze on Medicare and health rebates which were not indexed for inflation from 2013 to 2019.

“So the gap between the rebate or what a patient gets back and what a surgeon charges is getting bigger,” Executive Director Surgical Affairs of the Royal Australasian College of Surgeons (RACS) Dr John Quinn said.

Dr John Quinn concedes the gap is getting bigger.

The Australian Medical Association (AMA) said health fund rebates vary enormously between funds. For example HCF pays doctors 23 per cent more than Medibank for a hip replacement.

“The AMA does not endorse egregious billing,” AMA president Dr Omar Khorshid said.

“Differences in fees can occur for a range of reasons, including varying rents and practice costs, but the AMA encourages all doctors to be mindful of their patient’s individual circumstances.”

The analysis shows nine in ten patients who have obesity surgery, prostatectomies, double hip replacements, ankle replacements and sinus surgery face out of pocket fees.

Eight in ten people having a knee replacement or tonsillectomy pay gap fees.

Nearly six in ten women having a caesarean will pay a gap fee, while one in three who have a normal birth pay a gap.

Lawyer and medical fee expert Margaret Faux, who is working on a PHD on medical fees, said there was zero education provided to doctors about fee setting.

“Most doctors make decisions based on corridor conversations with their colleagues, or the practice manager will say other doctors charge this why don’t you do that,” she said.

Jim Clancy, 71, with wife Lyn and grandchildren Lachie, 4, and Angus, 2, he has had 3 recent knee surgeries with out of pockets close to $1000. Picture: Rob Leeson.

Retired school principal and part pensioner Jim Clancy, 71, was disappointed he had to pay $880 in out of pocket expenses for his knee replacement operation in April.

“I think if I’ve been paying for health insurance for 30 to 40 years, you should have some sort of loyalty bonus and the fund would pay everything,” he said.

Surgeons are Australia’s highest earners, with Australian Taxation Office statistics listing 150 male neurosurgeons at the top of the list with an average taxable income of $630,000.

Patients upset by egregious fees can complain to the Royal Australian College of Surgeons but fewer than 10 patients have done so.

“So if people are paying large out of gap fees, and they’re not complaining, I’d have to presume that they’re accepting, rather than happy, that they’re given informed financial consent,” Dr Quinn said.

The College had reprimanded one doctor for charging exorbitant fees and said some surgeons had reduced their fees after a patient complained.

Consumer’s Health Forum chief Leanne Wells said shortage in supply of surgeons in certain specialities was driving up fees.

In 2019, only around one in three of those who applied for a specialist training place were awarded one but Dr Quinn blames state governments for restricting training places.

Additional reporting by Olivia Sfetkidis and Sayee Ravisankar.