Why the fuss about surgeons fees this week?

The issue hit the headlines after the Royal Australasian College of Surgeons issued a strongly worded statement taking aim at some surgeons, including some of its own members, for charging “extortionate” fees, and threatening to take action against those found to be acting unethically. The college’s intervention coincided with a hearing in Canberra as part of a Senate inquiry into the broader issue of out-of-pocket health costs. The inquiry, which was initiated by Greens Senator Richard Di Natale, partly as a way of scrutinising proposals for fees to visit GPs, is due to report on Friday.

What kinds of fees are we talking about?

The Medicare benefits schedule limits how much Medicare will pay for particular procedures, but some surgeons complain the Medicare schedule has not kept pace with increases in practice costs. Surgeons are free to charge what they like, with the patient or their health insurer left to pick up the difference. Prominent neurosurgeon Charlie Teo  said while the standard fee for the removal of a brain tumour is about $2500, he believes the complexity of some cases justifies a fee of $10,000.

How widespread is the problem, and is it increasing?

Stephen Duckett, a former head of the Commonwealth health department who is now at the Grattan Institute, presented evidence to the Senate inquiry showing that between 2007 and 2013, out-of-pocket costs for operations increased by more than 25 per cent in real terms, more than any other category of service covered by Medicare. Almost a fifth of all health spending comes from consumers directly, Professor Duckett wrote, noting Australia's reliance on such payments was higher than Canada, New Zealand and the UK.

I think my plumber is pretty expensive too - don't market mechanisms establish prices and competition protect consumers from price gouging?

The market for surgery doesn’t work so well, because we tend not to shop around for an operation in the same way we might for other goods and services. Typically, our GP will refer us to a specialist, who will provide an indication of the likely cost of the procedure. But with no point of comparison, it’s hard for us to tell whether the surgeon’s fees are reasonable. Surgeons who compare notes with their colleagues on their fees risk falling foul of competition rules. The College of Surgeons said this week it was talking to the Australian Competition and Consumer Commission about how surgeons might be more transparent about their fees without breaching the Trade Practices Act. But the Australian Medical Association has already voiced its strong opposition to the idea of allowing patients to compare surgeons’ fees online, with AMA president Brian Owler, also a neurosurgeon, saying it wasn’t possible for surgeons to publish their fees because they varied depending upon each patient’s circumstances.

What could be done to fix it?

Dr Teo has suggested Australia adopt something like the American Medical Association’s "22 Modifier" policy, which requires surgeons charging high fees to supply evidence that the service provided was substantially greater than the work typically required for a certain procedure. The Consumers Health Forum says the Commonwealth could help patients assess whether fees are reasonable by publishing data on average fee structures, which it routinely collects but does not release. Terry Barnes, a policy consultant who worked for Tony Abbott when he was health minister in the Howard government, has suggested surgeons be forced to accept a cap on their fees in return for Medicare subsidies.

Surgeons might be expensive - but I get what I'm paying for, right?

Not according to College of Surgeons president Michael Grigg. He says in medicine, often the reverse is true. Some ethical, well-trained surgeons charge modest fees and are kept busy with referrals from colleagues who know they do good work, while other surgeons with less work charge higher fees in the hope of fooling patients into thinking they deliver a higher quality of service.

Often it's the add-on costs - the anaesthetist, assistants, theatre fees, devices and medications - that give patients bill shock. What consumer protections exist for getting timely and accurate information about costs?

It’s really up to the patient to clarify what costs they might incur, including from anaesthetists and surgical assistants, and for hospital accommodation as a private patient, before consenting to the procedure. If the fees quoted seem excessive, speak with your referring doctor about seeking a second or third opinion.