Obstetricians receive peanuts for birthing babies – it’s one factor pushing the private system into collapse
As the private maternity system in Australia teeters on the brink of collapse, obstetricians are often targeted for ‘gouging’ patients. The real picture is very different.
It’s no secret that seeking care from an obstetrician to give birth in the private system can be an expensive endeavour for patients, who routinely face thousands of dollars in out-of-pocket costs, despite having private health insurance.
What many patients don’t know is that the fee Medicare pays their doctor for delivering their baby and for the post-partum care is astoundingly low. For attending an uncomplicated birth, which involves the doctor being available 24/7, the Medicare Benefit Schedule fee for an obstetrician is $592.95. If the birth is complicated, and even if that necessitates surgery by caesarian section, the fee rises to $1392.15.
Health funds are mandated to top up this payment by a minimum of 25 per cent, but pay a lot more if obstetricians sign up to a no-gap arrangement. The average payment to an obstetrician from a health fund for an uncomplicated birth is about $2000.
Medicare rebates for antenatal visits are pitiful: $40.30 a visit after the first consultation. That’s less than ordinary patients receive as a Medicare rebate for a standard GP consult of less than 20 minutes for a sore throat.
With Medicare providing only about $500 all up for obstetric antenatal care rebates, the relatively low amount of money obstetricians earn from the birth itself and low Medicare rebates for pregnancy care means these doctors are forced to make most of their money in out-of-pocket costs levelled upon the patient.
Despite this, many women still flock to the private system – but in Tasmania and a host of other locations around the country, their options are now severely limited.
The state has only one private maternity unit still operating. The looming collapse of the private maternity system threatens to undermine not only the birthing choices of women but also presents a critical threat to public hospitals, which will not be able to cope with a large influx of patients.
A private maternity system collapse could cost taxpayers a minimum of $1bn a year.
“We can’t have the 25 per cent of obstetric populations currently in the private sector moving to the public because it will absolutely devastate outcomes that we know are already challenged in terms of worsening outcomes for mums and babies,” Hobart obstetrician Kirsten Connan says.
As Australia’s private maternity system teeters on the brink, the implications of letting the private system collapse have been brought into sharp focus by the publication on Monday of a major paper by health economist Emily Callander, which finds that neonatal deaths and stillbirths are double in public maternity care, and adverse outcomes for women are also substantially higher.
With the costs hospitals face in staffing and running birthing units making them financially unviable across the country, there are fresh calls for an urgent fix.
It’s undeniable that high out-of-pocket costs are a significant reason many women with private health insurance do not use it to give birth in the dwindling number of private maternity hospitals.
The reasons are multifactorial. The blame is often laid at the feet of obstetricians themselves: they frequently top the league tables in reports that document inflationary fee charging by specialists. These so-called perpetrators of price gouging are often perceived as middle-aged white males: in fact, more than three-quarters of obstetricians now are women.
“Most of us find it deeply disconcerting, confronting and also really sad that that’s how we’re viewed,” says Dr Connan.
“If I wasn’t able to charge an out-of-pocket beyond the MBS and private health insurer rebate, I wouldn’t be able to run my practice. It just wouldn’t be financially sustainable.”
As well as being paid relatively little by Medicare and insurers to manage an entire pregnancy, and birth that necessitates being available around the clock and in the post-partum period, obstetricians also face some of the highest risks in medicine, and as a result have the biggest insurance premiums – routinely 20 times or more what GPs pay.
They also need to employ staff including often midwives. To illustrate the high expense of running an obstetrics practice, one busy obstetrician who received $650,000 in remuneration in one year from health funds, had to pay $293,000 in tax, and staff wages of $300,000, leaving $57,000 from that pool of money, not including other expenses such as risk insurance or income such as private fees.
Other obstetricians have told The Australian they earn a reasonable wage but their business makes almost no money.
The publication of the data in the Callander paper has established – based on the biggest dataset of births ever examined in Australia – that birth outcomes are far superior in the private system, Yet that system is headed for collapse, with 18 private maternity units closing in since 2018.
The Australian College of Midwives declined to respond to the Callander paper.
Solutions to the crisis are focusing on role substitution, with insurers pushing to fund private midwives as lead practitioners looking after a pregnancy and birth – a proposal that appears to have some support from the federal government.
But there’s no plan on the table to address what is arguably the most significant factor in the decline of the private maternity system in Australia: shockingly depressed Medicare rebates for obstetrics which have not increased for more than a decade, compounded by a situation in which insurer payments do not cover the running costs of maternity departments that must be staffed 24/7.
The point is underscored by an analysis of the disparities between Medicare rebates paid to private midwives and those given to obstetricians. A private midwife receives $1287.35 from Medicare via the patient rebate for managing a labour and birth – more than double the rate for an obstetrician.
Medicare rebates for antenatal attendances by private midwives also soar above the obstetric rebate at $63.55 compared to $40.30.
Health department bureaucrats cannot explain why.
“I think it’s great we now have MBS rebates to midwives, and I support their ability to practise and support individual state areas, but I think it’s really shameful that we aren’t at least matching, if not providing, a higher rebate for obstetrics,” says Dr Connan.
“Pregnancy care is complex. But I would get sometimes a lower rebate for potentially 10½ months of pregnancy, birth and postnatal care than I’d get in a three-hour gynaecological procedure.
“Obstetric rebates simply do not reflect the workload.”
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