Patients being bled by specialists as out-of-pocket costs surge

Medibank has warned that one in eight of its customers is being forced to pay specialists up to $500 in out-of-pocket costs.

Medibank chief medical officer Linda Swan.

Health insurance giant Medibank has warned that one in eight of its customers is being forced to pay specialists up to $500 in out-of-pocket costs, as it launches a tool to lessen bill shock.

The health insurer revealed that data it collected from 14,000 specialists over the past year showed that 13 per cent of claims by its customers had an out-of-pocket cost of less than $500, while 4 per cent had a gap payment of more than $500.

That data does not include charges for out-of-hospital care.

“If you listen to the degree of consumer concern in the market, it does feel like there is a lot of out-of-pocket charges at a level that is causing our customers distress,” Medibank chief medical officer Linda Swan said.

Dr Swan said affordability was still the No 1 concern of Medibank customers, followed closely by out-of-pocket costs. “It is a very big issue for us as a private industry to work out how we can improve the overall cost of private health insurance and … help minimise any out-of-pocket costs.”

To address the concerns, Medibank is rolling out a tool that will reveal how often a specialist levies no out-of-pocket charges, an out-of-pocket of up to $500 or an out-of-pocket of more than $500 for a hospital admission.

Dr Swan said Medibank could reveal only what its claims data showed, not what people were being charged in a doctor’s rooms. “We are hearing about customers being given two different bills,” she said. “One they pay directly to the doctor and one they pay to the health insurer. We are only getting part of the picture about total out-of-pocket costs.”

The most recent quarterly data from the Australian Prudential Regulation Authority showed that out-of-pocket payments for hospital episodes increased by 3.3 per cent.

The regulator said the specialty group with the largest out-of-pocket payment was ­plastic-reconstructive, with an ­average gap of $381.

Dr Swan said evidence showed that cost was not an indicator of quality. “Many people think when they pay a lot of money it is because they have seen the very best doctor but there is no evidence our high-paying doctors are getting better outcomes,” she said.

A federal government-­appointed committee, chaired by chief medical officer Brendan Murphy, is reviewing the issue of out-of-pocket costs as part of wider reforms introduced by Health Minister Greg Hunt.

The committee is scheduled to report by the end of this year and some industry insiders have suggested it could be as early as next month.

Insurers are increasingly wanting to play a more active role in the healthcare of their customers, prompting critics of the sector to claim insurers are pushing for an “Americanisation” of Australia’s health system. Dr Swan said she would “categorically argue” against that position, saying it was the reverse of what Medibank was doing with its latest customer tool.

“We are not telling people where they should go,” she said.

“But I believe if you have bought private health insurance, you need to be able to exercise your right to a choice, and to ­exercise that choice you need ­access to data.”