IBAC probes claims sick patients languished as surgeons chased fees

Critically ill public patients have been forced to wait up to eight hours for emergency surgery at the Royal Melbourne Hospital due to surgeons prioritising more lucrative private patients, according to claims being investigated by the corruption watchdog and described as “truly astonishing” by the private healthcare industry’s peak body.

In one case from January 2023, a woman who was critically ill in the intensive care unit waited from 8.30am until late afternoon for surgery to treat a potentially deadly infection.

The Royal Melbourne Hospital.Credit: Justin MacManus

The medical team looking after the patient had flagged this surgery as urgent and escalated their concerns about the delay.

Four hospital sources with knowledge of the incident, who were unauthorised to speak publicly, alleged that staff were unable to immediately perform surgery on the patient because there was a hold-up in the theatre due to surgeons prioritising less clinically urgent cases involving Transport Accident Commission, WorkCover and privately insured patients.

Operating on these patients delivers extra remuneration for surgeons, in addition to the hourly rate they receive from the public hospital.

Dr Rachel David, chief executive of Private Healthcare Australia, the industry’s peak representative body, said the alleged behaviour was “truly astonishing”.

“If true, not only is this completely unethical but it is contrary to one of the fundamental principles of medicine of treating the sickest patients first,” David said on Saturday.

“For any surgeon – especially those working in public hospitals – to allegedly prioritise increasing their bank balance over patients who are critically ill is truly astonishing; especially considering there are plenty of empty operating theatres available in private hospitals across Melbourne that could and should be utilised for less critical procedures on TAC, WorkCover and privately insured patients.”

“It’s disgusting and immoral,” one hospital source said of the January incident.

“It runs in the face of everything we stand for as medical practitioners. It appeared the order of treatment on that day was dictated by financial compensation rather than patient need. She should have been the highest priority of the day.”

The Royal Melbourne Hospital denied having a record of unsafe or delayed care.

“We respect the privacy and confidentiality of our patients and will not be commenting on individual cases,” a spokeswoman said.

“We can confirm that we do not have a record of unsafe or delayed care that matches the description provided.”

The spokeswoman added that the hospital had recently improved its escalation processes, including additional bystander training and putting in place an external whistleblower line.

But another hospital source described the incident as “disgraceful and unethical”, and said it was fortunate the patient showed good signs of recovery while in hospital given the lengthy and unnecessary delay.

This masthead revealed in December that the Independent Broad-based Anti-corruption Commission was investigating a handful of surgeons at the Royal Melbourne Hospital over allegations they billed the Transport Accident Commission and WorkCover for medical procedures that were never carried out on patients.

It’s alleged a handful of surgeons also fraudulently claimed lucrative “assistant surgeon” fees for operations they had minimal or no involvement in. IBAC is also investigating allegations that surgeons charged the Transport Accident Commission for operating on multiple patients at the same time.

IBAC has a practice of neither confirming nor denying the investigations before it, but this masthead has been able to independently verify that compromised patient care is within the scope of its investigation into the Royal Melbourne Hospital surgeons.

In response to the latest allegations concerning the group of Royal Melbourne surgeons, an IBAC spokesperson said: “As a matter of practice, IBAC does not comment on whether it has a complaint or investigation before it.”

It’s not known exactly how much money has been allegedly fraudulently claimed by surgeons, but some hospital insiders estimate it could amount to millions of dollars.

Many of the hospital sources interviewed by this masthead said the January 2023 incident was not isolated and they had come across many other instances in which public patients’ surgery was delayed because surgeons were prioritising more lucrative private patients.

“They were stepping over old ladies with bones sticking out to get to the TAC patients,” said one source.

Staff at the hospital have questioned why the surgeons under investigation have been allowed to continue working. “It is a toxic atmosphere and not conducive to patient care,” one hospital source said.

Roy Carey, an orthopaedic spine surgeon, said WorkSafe Victoria and private insurers had been aware of inappropriate billing for more than a decade.

“Uncontrolled access to government funding for anything is like leaving Dracula in charge of the blood bank,” he said.

He helped establish a program for WorkSafe Victoria to assess the appropriateness of billing from surgeons requesting approval for spinal operations.

“Uncontrolled access to government funding for anything is like leaving Dracula in charge of the blood bank.”

Roy Carey, orthopaedic spine surgeon

During its first year of operation in 2016-17, 43 per cent of all requested item numbers were rejected, and 29 of the 70 surgeon providers that billed WorkSafe Victoria used “items of concern”, according to a 2020 article by Carey published in the Australian Orthopaedics Association journal.

An anaesthetist who works at a different health service, who spoke on the condition of anonymity for fear of reprisal, said the investigation at the Royal Melbourne had been the talk of the town among his profession, as well as among senior nurses.

The anaesthetist said that he and many others hoped the anti-corruption probe would drive cultural change at all Victorian hospitals for the good of patients and taxpayers.

“It’s a rat nest of egos and greed,” the anaesthetist said. “The sad thing is there are some absolute first-class practitioners.”

The Independent Broad-based Anti-corruption Commission is investigating a handful of surgeons at the Royal Melbourne Hospital.Credit: iStock

Opposition health spokeswoman Georgie Crozier said the Allan government needed to explain whether these unethical practices were still taking place at the Royal Melbourne Hospital.

“Something is seriously going wrong in the system when doctors are indicating such serious injuries need urgent attention and they are being bumped for less urgent TAC cases,” she said.

An Allan government spokesperson said all Victorians expected hospitals to uphold the highest standards of integrity and patient care.

“Anyone with concerns should come forward to the Department of Health’s integrity unit, or directly contact the Independent Broad-based Anti-corruption Commission,” the spokesperson said.

“As this matter is currently under investigation, it would be inappropriate to comment further at this time.”

A Health Department spokesperson said Victorians with complaints about their treatment could also contact the Health Complaints Commissioner.

Late last year, The Age revealed that the state government was warned in May 2022 about doctors manipulating claims to boost their income.

An independent medical examiner, whom this masthead has chosen not to name, emailed the parliamentary office of then-premier Daniel Andrews. But he never received a proper response, apart from an acknowledgement that the correspondence had been received. The same thing occurred when he sent a follow-up email.

The correspondence was sent almost a year before the Labor government bemoaned the cost blowouts plaguing the WorkCover scheme, describing the system as “fundamentally broken”.

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