Labor pledges to ‘fix’ former government’s failed price disclosure tool if re-elected

The Labor Government has vowed to fix what it calls a ‘failed’ price transparency tool set up under the former government – a $24 million website that has delivered little benefit to patients.

The Medical Costs Finder was launched with the promise of using Medicare data to help Australians compare specialist consultation fees. The website was also meant to include fee information voluntarily provided by doctors.

Yet, by the end of 2022, out of approximately 11,000 specialists across 11 specialties, only seven had chosen to display their fees. Three years later, that number has barely increased – just 70 doctors have opted in.

Federal Health Minister, Mark Butler, did not hold back in his criticism. He stated, “It’s a service that has been left gathering dust and doesn’t help patients determine specialist out-of-pocket costs. The Albanese Labor Government will help Australians find the best value when they need specialist medical advice and treatment, by upgrading the Medical Costs Finder to give more transparency on fees.”

A staggering 60% of patients admitted to private hospitals reported out of pocket fees, 70% of whom paid in excess of $500, a finding in sharp contrast to government reported figures of only 35%, suggesting that the practice of “split billing” is widespread in Australia.

“Split billing happens when a doctor gives a patient one bill that is visible to the government and the private insurer, while another bill – labelled as a ‘booking fee’ or an ‘administration fee’ – is sent directly to the patient,” said Patients Australia CEO Lisa Robins. “These fees can reach thousands of dollars but remain invisible to the government as part of the patient’s total cost of treatment.”

Patients felt disempowered and unable to question unexpected bills, with fewer than one in ten patients (7%) complaining to their specialist. Nearly half felt there was no point in complaining and one in five were concerned that complaining might affect their care.

“As a psychologist, I find the emotional toll of shock out-of-pocket costs especially concerning. The last thing anyone needs while focusing on post-intervention recovery is the added stress of an unexpected bill they have little to no way of paying,” Robins added.

The government’s pledge to revive the website has been welcomed by the Australian Medical Association (AMA) and Private Healthcare Australia (PHA) who say patients have been left vulnerable to exorbitant and often last-minute fees.

“This is a massive win for consumers who have been crying out for more information and competition between specialist doctors, so they don’t get hit by unexpected fees,” said Dr Rachel David, CEO of PHA. “We need to stamp out this sort of price gouging, especially during a cost-of-living crisis.”

Labor’s proposed overhaul would take the burden off doctors by automatically displaying the average fee charged by every eligible specialist across all non-GP specialties. A $7 million investment would enable the system to analyse Medicare, hospital, and insurer data for every common medical service – finally providing patients with a meaningful benchmark for out-of-pocket costs.

For the first time, the upgraded Medical Costs Finder will also include data from private health insurers, making it clear how often patients are left paying out-of-pocket for procedures. Under the previous government, insurers were allowed to share this information voluntarily, but only three chose to do so. Now, they will be required to disclose this data.

The AMA has cautiously welcomed the move toward greater transparency. However, AMA President Dr Danielle McMullen warned that revamping the website alone would not solve the systemic cost issues plaguing private healthcare.

“The commitment to redevelop the Medical Costs Finder website will require extensive input from the profession, as well as legislative changes. It is essential this time is used to get these changes right, and ensure data is accurate. The AMA will work closely with whichever government is in power after the election to improve transparency on medical costs,” she said.

The AMA has also pointed the finger at private health insurers, arguing they have avoided scrutiny on the rebates they provide for medical procedures. While the former government had committed to improving transparency in this area, little action was taken.

“The rebates patients receive are hidden on individual insurer websites, but we think they should be plainly available to consumers when they visit the Medical Costs Finder website to see which insurer provides the best value for the procedure. One change we will push for is to the name of the website, as it’s much more than just ‘medical costs’ that cause out-of-pocket costs for patients,” Dr McMullen stated.

The lack of transparency on rebates is a major sticking point. Insurer profits have surged nearly 50% in the past five years, yet patient rebates have increased by just over 10%. The AMA argues this discrepancy is further driving up out-of-pocket costs, with patients left to cover the shortfall.

The impact of these rising costs is already being felt. A recent survey of over 5,000 Australians conducted by Patients Australia and La Trobe University found that one in five Australians is now skipping specialist appointments due to financial concerns.

The question remains – will the Medical Costs Finder finally serve its purpose, or will it remain another expensive policy failure?

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