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We must avoid the risk that health care becomes the target for profiteering, writes Dr Will Cairns.
The Australian Government needs to take further action to ensure Australian health care remains affordable, and to avoid us heading down the path to health care calamity that is being taken by the United States (eg, in maternal mortality, here and here).
Although I recognise the opportunity for profit greatly incentivises innovation and change, and can deliver great benefits for a community at large, there are inherent dangers for society, let alone a health care system, driven largely by the pursuit of profit. This was explored by the chief economics commentator at the Financial Times, Martin Wolf, in his book The crisis of democratic capitalism.
Unfortunately, in the US and elsewhere, there are some who believe that only their opportunity for unconstrained free enterprise can deliver a healthy economy. They can come to equate their personal success as one and the same with that of their community.
This is a pattern that has been repeated throughout human history, and a theme of The Earth transformed: an untold history by Peter Frankopan, a Professor of History at the University of Oxford. All too commonly, the pursuit of more wealth by the already wealthy slides slowly into them exerting their power to control the rules of their community to advance their personal interests at the expense of the rest of the community.
No human community is immune to these risks – they are a product of what we are.
As a complex and poorly understood system awash with government (taxpayer) money and vulnerable patients, the US health care system is perhaps the fattest of easy targets for capture and profit. In Wolf’s cautionary words:
“The US … spends far more on health care than any other high-income country (not much below a fifth of [gross domestic product]) and yet has far worse health outcomes, because the health system nourishes rent-extracting monopolies: doctors, hospitals, insurance companies, and pharmaceutical businesses all feed at this overflowing trough.”
Theirs is a system that has led to much misery for so many in the US: a vastly profitable network of businesses largely shaped by special interests to extract as much money as possible from individual patients and taxpayers (here).
Here in Australia, with little awareness or impediment, I fear we are allowing our health care system to drift slowly in a similar direction. Over time, we have seen a progressive disconnect across the funding, the costs and the prices of health care in Australia.
As I have described in earlier writings (here, here and here), the contribution by government and the prices that many can afford to pay for primary care have been decoupled from the actual cost of its provision. The consequence is that primary care (not to be confused with high throughput, bulk-billed, episodic visits) is failing or becoming inaccessible for less affluent people in many communities.
At the same time and in the opposite direction, some specialist doctors in private practice, particularly procedural specialists (here), have managed to decouple their charges from the rates that governments, and even their own specialty groups, deem to be reasonable, and from what the community that funded their training might reasonably expect them to earn.
For example, bariatric surgeons commonly advertise their prices of between $5000 and $10 000 (about five to ten times the Medicare rebate) for an approximately one-hour procedure, and can perform about half a dozen per day. Perhaps surprisingly, not-for-profit faith-based hospitals where many such procedures are done do not seem to comment on the ethics of such pricing because such surgery is very lucrative, about $15 000–$20 000 for a three-day admission (here and here).
Government has also been sucked in to filling the growing Australian health care trough by allowing patients to take money from their superannuation account to pay for high priced (rather than high cost) health care (here). In doing so, it accepts taxpayer responsibility for the future cost of pension payments for those with lowered superannuation balances.
Large health care businesses, and the private equity firms that own some of them, now appear commonly in the business sections of Australian newspapers.
When the benefits of improved health care technology are captured by entities for whom the primary goal is profit, whether individual doctors, pharmaceutical and medical device manufacturers, private hospitals, National Disability Insurance Scheme (NDIS) providers, or private equity funds, the interests of patients and employed health workers (including doctors) become of secondary importance.
Last month, I was told of a group of Australian medical students discussing how they would earn their fortunes after training as procedural specialists. Perhaps those students who dream of their lives as proceduralists should read this story from The New York Times and the article that prompted it.
“Doctors on the front lines of America’s profit-driven health care system were also susceptible to such wounds [moral injury], Dean and Talbot submitted, as the demands of administrators, hospital executives and insurers forced them to stray from the ethical principles that were supposed to govern their profession. The pull of these forces left many doctors anguished and distraught, caught between the Hippocratic oath and ‘the realities of making a profit from people at their sickest and most vulnerable’;” The New York Times, 15 June 2023.
All doctors should consider how they might lose professional autonomy when the health care services that employ them are progressively swallowed by for-profit businesses.
Recently, I was sitting in the waiting room of a group of specialists when I overheard one of the receptionists telling a prospective patient over the phone that they would have to obtain a referral – the problem appeared to be that the patient could not find a GP for an appointment to create the referral that is essential for specialist practice. And from next year, I will have to have a note from my GP to be able to drive a car – what would I, or a patient will less agency, do if no GP is available?
The Strengthening Medicare Taskforce signalled that the government has begun an attempt to give direction to Australia’s health care services. It recommended increasing access to primary care, encouraging multidisciplinary team-based care, modernising primary care, and supporting change management and cultural change.
However, these actions are barely pecking at the problem.
Where are the mandated comprehensive structural/financial designs for the whole health care in Australia that will create sustainable structures and functions for all the components of our health service?
Where is the practical acknowledgement of the importance of public health and preventive care? If GPs are integral to a viable system, why are they not treated as equally important to specialists? If that is not the model, then what structures and roles are envisaged that meet the diverse health care needs of the community?
How can government incentivise innovation, collaboration and excellence while reining in the sense of entitlement to huge incomes (dare I say greed?) of some in my profession of medicine, and of those who would exploit health care generally?
I also ponder what measures will be necessary, such as limits to some services and the reallocation of resources, to create a sustainable and equitable health care system.
Government could use the current mid-term review of the National Health Reform Agreement Addendum to look beyond hospital funding and consider health as a whole – an interconnected codependent system that bridges primary care, aged care, disability services and our hospital systems.
Health care provides a great model for understanding the foibles of human nature. It exposes the hazards that arise when self-interest trumps the interests of the whole community and ignores the necessity for a balance between equity and incentivisation in a healthy society.
We should heed the lessons of the past and the present, try to understand who we are, and work out where we might want to be and how to get there.
Not doing so will leave us rudderless and vulnerable, subject to the self-serving influences of players whose primary goal is not the provision of health care.
Dr Will Cairns has retired from clinical practice as a palliative medicine specialist.
The statements or opinions expressed in this article reflect the views of the authors and do not necessarily represent the official policy of the AMA, the MJA or InSight+ unless so stated.
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“Paying more for something simple? If that’s true then just make it the last time you visit the doctor/dentist/tradesman.” The fact is that members of the same profession know what their colleagues charge therefore there is usually no cheaper option. And I find it difficult to understand how a routine dental checkup equates in skill to an initial consult with a medical specialist yet a general dentist now charges the same or more.
However getting back on topic, out of pocket health care costs are rising significantly in Australia. There is no such thing as free health care but it needs to be affordable and that is increasingly not the case and just using lesser trained healthy professionals following algorithms to perform complex work requiring high levels of experience and training is definitely not the answer
Paying more for something simple? If that’s true then just make it the last time you visit the doctor/dentist/tradesman.
If you are paying a premium, you are paying for the convenience or the trust and familiarity with the service provider for something simple.
But it’s rarely just “something simple“. Otherwise it will be Bush’s “fool me once, shame on you, fool me twice…”
In the old days I know of someone who gets their children to have their brace done interstate factoring Ansett flights costs over several years of checks. I am not sure the price differences is that much now but it may be just a matter of going to the other end for cheaper service. But expecting competitive fees at one’s doorstep is sometime unrealistic.
I asked a surgical colleague of his new consultation charge, it was $50 less then what is the prevailing norm, yet he is not busy. The current referral system situation is a combination of referring patterns by GPs, patient expectations, and individual location.
For example, the costs of primary and secondary care in ACT is high for decades, yet if one go interstate 10-100km in at least 2 towns they can get similar care for less (how much depends on specialty) and before anyone complains about the distance, they can travel that 100km any day 30 mins faster than going from top end of Sydney metropolitan to the south end even when using tollway on a weekend.
The fact is healthcare costs has been suppressed for years while other jobs income are fast increasing despite free market forces and competition. I can’t get a tradesman to come without a $100 call-out fee, before they even open up their bag, and that’s after waiting the whole morning for their 8am-3pm attendance time window, and we are here complaining about something much more valuable than a brick and mortar object, namely your own health.
Perhaps someone of us here are just undervaluing and under appreciating the amount of training, the responsibility involved, or the personal and financial costs of providing healthcare services.
BTW. Don’t buy into that guilt trip about the public subsiding your training. Almost every one got into their job with some public money subsidising their education and training, be it Year 1-12, university learning or TAFE apprenticeship. Longer training simply meant more quality work being done at cut rate salary.
Great article. And it’s not just doctors. My very long term dentist just charged an astronomical fee for simple teeth cleaning and checkup leaving even myself to wonder how I can continue to pay this twice a year. Physios now regularly charge twice the Medicare rebate if referred under a GPMP, and many psychologists are demanding over $300 per 45 minutes to work from home with no overheads. Undeniably we are heading down the path to either the NHS or the US health system or a bit of both. To be controversial my impression is that it seems to be easier to become a private specialist these days whereas I recall when elite specialties were the province mainly of confident private school graduates and female surgeons simply did not exist. This is good in some ways as the profession is overall more diverse but at the same time the free market cannot be allowed to dictate access to health care.
If we keep moving towards Americanisation of health care in Australia we will soon end up with obsolete GP as primary care physician. Runny nose will make us see an ENT sp and pay through the nose, a headache will warrant a neurologist to fix it, every abdominal pain will make us pay a gastroenterologist and so on. Halve nots will be last in the que and suffer . Corruption will be flourishing easily in health care. Respectfully paying GP as primary care physician is the only option to reduce burden of disease , reduce hospitalization, reduce strain on health budget
Australia is not far behind the 20% spending on health – just add up Medicare levy, out-of-pocket costs and private health insurance (if you still can afford it).
There are some who says we need to get more students with empathy and compression, and getting certain personalities into medicine. I would flag that no gender, social background or previous learning, nor certain personalities have any monopoly or guarantee to these traits, and frankly to suggest anything like this is stereotyping and discriminatory to those who does not “qualify” or self identify to these traits.
The article author seemed to think that certain operations, including bariatric surgery, by nature of duration of procedure, does not deserve high renumeration. Does he think a longer operation performed by a slower, less skilled surgeon is better? It takes many years to become a surgeon, even longer as a bariatric surgeon, and then the competition in the real world for a small share of pie, once you completed the surgical training and additional years of fellowship, while their peers from medical schools have completed GP training within 6 years of graduation, or 8 years or longer for physicians. Have anyone considered the indemnity costs related to bariatric surgery?
(And by the way I am not a bariatric surgeon, nor do I have a private practice, but I strongly support the right for doctors to charge what they feel should be their fees. Anyone who advocates otherwise is also risking promoting anticompetitive activity)
Worse is the indirect references to current government rebates as if it bears any resemblance of actual costs of providing a medical service, much less a renumeration for the service provided. Many of us, like the greater public, mistaken the MBS rebates as a refund, and forget private billing meant getting 75% of the pitiful rates the government had determined what it wants to pay. Frankly if someone demands a excessively high rates, there will be newcomers whose fees will undercut the dominant specialist’s charges; whether or not the patient will want to go to the cheaper doctors is up to the referrers’ decisions and patient’s perception (if older doctors or those who charges is likely to be better). There are plenty who will sign up for no gap billing with private health fund, but then again it will be signing up with another entity who, like the commonwealth, have a vested interest in keep fees low, uncoupled from CPI and costs of business.
Shaming individuals who charged more as greedy or ungrateful (many in publicly funded training positions actually performed excessive unpaid overtime from internship all the way to end of advanced training and fellowship, so that doesn’t wash, thank you very much), simply buys into the narratives of government agencies, private health funds, social commentators and retirees, all have vested interest in wanting to pay less doctors fees.
We all seen the ad by a certain eyewear company now promoting their hearing aids at cut price, so that the older customers can use the savings to go for a holiday. Their competitors (private earring aids dispenser) are portrayed as money grabbing scammers out to price gouge these customers. IMO these people are more likely to be sole traders who lives in the community they serve, aims to provide an personal and individualised service to all their clients, and expects to be renumerated accordingly, not expecting their customers simply takes the prescription to a overseas owned health product hyper mart franchise.
And we are all undervaluing ourselves and our surgical colleagues the same way.
Anyone who wants cheaper medical services, can shop around, exactly like they do with other healthcare products; we need to stop buying into the narrative that the regular joe nowadays is a healthcare naive consumer who didn’t know there are cheaper alternatives out there, although it may involve travelling further or being in a hospital they don’t like or waiting longer to see that cheaper doctor.
The major drivers of health service price increases are all due to government.
Why is there never a suggestion of leveraging technology or decreasing red tape to reduce costs to patients?
Automate the PBS authority line.
Reduce nonsense audits to increase valid co-billing for the majority of low income patients with mental and physical co-morbidities.
Allow headline billing so that practice nurses can run health, lifestyle, and immunisation clinics under the supervision of fellowed GPs.
Minimise nonsense surrounding PRODA and complexity of accessing aged care incentive access payments, and other block Medicare payments.
Stop named referrals to public opd and double and triple dipping by woefully inefficient public hospitals and state governments.
No, far better to tilt at windmills and draw false comparisons to failing overseas systems.
Get pragmatic not dogmatic.
We need to look at outcomes and values based care. And we also need to stop the siloing in medicine and focus on the patient – not the doctor. Also with an aging population we need to consider what is reasonable and responsible are and what is expensive / or inappropriate care and stop providing this care. For all patients we need to look at the person with the disease and what is appropriate and desired, rather than what is the disease the person has – pneumonia in a previously well 40 year old should be considered very differently to pneumonia in a 90 year old RACF resident – they are not the same… despite the fact the disease itself may be the same!
How can you talk about the decoupling of specialist fees from what governments pay, without talking about the inadequate indexation and freezing of rebates. Some health funds have even pocketed the increase in the medicare rebates for their own profit. The AHSA funds have failed to index many specialists rebates over the last two years, despite two indexations from medicare. Effectively they have kept those increases for themselves.
There is no healing in the business of medicine.
Thank you Dr Cairns, for continuing to have the courage to say what needs to be said
These type of articles never seem to address an important question, ie how much *should* a doctor earn per hour ? (net of reasonable practice costs)
The issue is one of supply and demand. So, maybe some people should opt out of early retirement? Hmm?
Perhaps before chosing who gets the expensive training we test the types of personality of those applying and why they are deciding to become doctors. Perhaps we educate more nurses and women who tend to have empathy and compassion. What is scary is that there is no tracking of outcomes from doctors. One doctor told me it came down to other doctors doing something to protect patients from doctors with dementia or any illness.
Sadly Australia is on a pathway to unfetttered health care cost rise accompanying decline in equity of access to and quality of healthcare. It seems the market has been allowed to determine this is best for us all .
Our elected representatives despite being responsible for so many factors in the market ( it certainly is not a “free market” and there is no such thing as a “failed market ” except in the government lexicon ) seem slow and haphazard in their implementation of significant health care reform lest unintended consequences occur and the health care business landscape changes too much or too quickly.
Primary care decline has been overseen by all federal governments over the last 30 years –
Are we really expected to be impressed that the current Federal Health minister is very worried about the decline in GP numbers and now appears to be preparing to act ? AIHW data has shown GP number decline over many years and I recall reading a commentary on their website about this . They reported that they had seen this decline in other industries where the role / job ultimately disappeared – It may still be on the AIHW website somewhere but is hard to find or perhaps that comment was just “disappeared ” – don’t want to frighten the populace too much
Meanwhile at the primary care ” frontline ” there is wide spread moral injury amongst health care workers – not burnout – as referenced in the NY times linked article. I note several strategies amongst younger practitioners to allay this – part time work , additional work in more lucrative or more respected subspecialty areas , locum work .
I doubt the federal government reforms or the health care workers actions will be enough and I suspect in future the only way to have some sort of career and assuage the pain of said injury may be for the sufferers to leave and allow the next rotation of “cannon fodder “to take their place.
Thank you for this timely article. We doctors are a reflection of wider society. Unfortunately in a society where neoliberal economics predominates, profiteering can become a moral virtue.
I believe doctors should be reasonably well paid as it ensures the retention and stability of a skilled workforce and reduces the risk of corruption in a critical profession. Doctors worrying about making ends meet may not necessarily have the capacity to be as altruistic and patient prioritising as society would desire.
Unfortunately in our increasingly unequal society where the gap between the haves and the have nots are widening, and the middle class is being hollowed out, being wealthy might be seen as the new comfortably off by some.
Profiteering health services are a sad symptom of our troubled times. We need to advocate for a more equal society in general.