Station: 3AW
Date: 12/12/2016
Time: 11:08 AM
Compere: Tony Jones
Interviewees: Dr Rachel David, CEO, Private Healthcare Australia
TONY JONES: I just want to change tack, because pretty keen to hear from people with private health insurance who’ve had surgery. So if you’ve had surgery recently with private health insurance give us a call – 96900693131332. I guess more specifically people have had surgery and have been shocked to find that they’re still getting slapped with a big bill. I read today that health funds are fighting back now; they’re setting up websites that will actually tell patients the gap fee specialist doctors charge: the fee that isn’t covered by health insurance of Medicare, the fee that ends up coming out of your pocket.

Rachel David is the chief of Private Healthcare Australia. Good morning Rachel.
RACHEL DAVID: Morning Tony.
TONY JONES: Well in essence, before we talk about the websites per se, are patients getting ripped off?
RACHEL DAVID: Look, most patients that get referred for some kind of procedure under private health insurance have a known- or a no- or no gap at all. But for a small number, and in some particular surgical specialties that are vulnerable, gaps can be very high, and if the first the patient hears about it is when they’re sitting in front of the specialist they often feel they can’t push back because they’re in a vulnerable position and have nothing to compare the price with.
TONY JONES: So this is the problem isn’t it, and they’re probably needing this surgery, they’re wanting this surgery to sort of make life a little bit better, so in a way they’re trapped.
RACHEL DAVID: Well that’s right. In some cases we’ve seen patients referred for life-changing or life-saving surgery who’ve been in that position and really feel quite – quite incorrectly, actually – that they’ve got no choice. What we’re doing is that we’re not trying to control doctors’ fees and charges, but we are trying to give consumers information that will enable them, with their GP, to make a decision based on what the qualifications of the surgeon are, or the specialist, and also the price.
TONY JONES: But are we talking all health funds here, or just certain health funds?
RACHEL DAVID: Look, at the moment some of the larger health funds are entering into these arrangements, but I’m also aware of the questions that some of the smaller health funds are having as a group to be able to enter into these arrangements as well. And it’s really technology that’s made this possible, technology and data analytics so that we can provide meaningful information at the push of a button.
TONY JONES: Sorry, you were just saying there you’ve heard anecdotal evidence where some of the smaller insurers- what, are they forming some sort of a cartel or something are they?
RACHEL DAVID: Nothing of the kind. They have arrangements whereby they can, like the bigger funds, use data from data providers to put their data onto websites just like the bigger ones can, but it will take more time for them.
TONY JONES: So in a nutshell patients are getting ripped off?
RACHEL DAVID: Look, some patients are not aware of what their doctors charged before they’re actually in the specialist referral process. And for many consumers – we’ve researched thousands of consumers over the last year and previously – outside premium increases this is their major concern. And probably the maximum amount of money we know from our research that consumers can afford to pay at short notice is about $400 or $500 – anything more than that is a serious impost on household budgets. And we know that we’re hearing about some gaps that are even five figures, over $10,000 – it’s not common, but it does happen. And what we’re doing is enabling consumers to have a conversation with their GP before the referral even takes place so that the GP is able to give them a choice, and also across a wider geographic area, because the internet makes that possible, than they might’ve otherwise done.
TONY JONES: But are there a lot of choices? Can I just put this in layman’s terms? So I go to my GP and I say right, I’ve got a knee injury and I’ve got to get this fixed, and they do the scans and they say yes, you need an operation, you need a knee reconstruction. So do they then sort of say – and I’m with- who am I with? Medicare or something I think – all right, so I’m with Medicare. Does he then say, okay, if you go to this surgeon you’re going to have this much extra to pay, if you go to this one you’re going to have this much. Is that what we’re talking about?
RACHEL DAVID: Yes, we are able to give, with some degree of predictive certainty, an idea of what different surgeons will charge out of pocket. But more importantly, we’re able to do that for large numbers of doctors. We’re training more medical specialists than ever before in Australia; we’re training more medical specialists than we train GPs. So it should be possible now for the GP to know that there are ranges of orthopaedic surgeons that can provide that procedure in the neighbourhood. Maybe if you drive over a few suburbs or cross a bridge, or even for some people in a different state, because we know from our research that some people would be prepared to travel to have their procedure no gap.
TONY JONES: I mean, the thing is though, you’re going to have- the good surgeons are the ones that are going to probably charge you more because they can, because there’s more of a demand. It’s the whole supply and demand thing here isn’t it?
RACHEL DAVID: Actually there’s absolutely no evidence that the size of the gap and the quality of the surgeon go hand in hand. There are some brilliant surgeons who charge no gap at all, and there are some surgeons who have had issues with their quality who charge very high gaps. What we’re aiming to do is to provide information to consumers and GPs about both: about the qualifications, about the number of procedures that the [indistinct] practitioners have done, and also on average what they’re likely to charge.
TONY JONES: I mean, at the end of the day you shouldn’t have to pay anything.
RACHEL DAVID: Well I think there are different schools of thought about that…
TONY JONES: [Interrupts] I don’t think so [laughs]. I’m in private health cover and if I’ve got to get my knee done I would say well hang on, I’ve been with you guys for 30 years, why am I paying anything?
RACHEL DAVID: Look, I think that’s fair enough, and large numbers of patients actually do pay nothing, but it’s not predictable. And what we’re trying to do is introduce some certainty into the process so that the first time a patient hears about a bill it’s not when they’re in a vulnerable position sitting in front of a specialist.
TONY JONES: Okay. All right, well it’s fascinating, and look it does only affect a few people, but unfortunately even a few people is too many. So thanks for your time this morning, Rachel, and good luck with it.
RACHEL DAVID: Cheers, thanks Tony.
TONY JONES: Thank you. Rachel David there, the chief of Private Healthcare Australia. And as I say, I’ve been in health insurance for a long time and I would’ve assumed that if you are having an operation of some sort then you’re not out of pocket, because you’ve been out of pocket every week for the past 30 years.
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