Rise in specialist fee costs highlighted in AIHW report

Financial

By Michael Woodhead

4 Jul 2024

Overall spending on Medicare-subsidised specialist consultation fees has increased substantially in the last decade, new government figures show.

In 2022–23, a total of $5.3 billion was spent on Medicare-subsidised referred medical specialist consultations, up from $3.9 billion in 2012-13, according to the latest AIHW report (link here).

The $5.3 billion spending in specialist fees comprised $2.9 billion in Medicare benefits paid by the Australian Government and $2.3 billion in out-of-pocket costs paid by patients.

Medicare benefits for specialist consultations paid by government increased from $2.5 billion in 2012-13 to peak at $3.2 billion in 2020-21, then fell to $2.9 billion in 2022-23. When accounting for changes in the number of patients, spending had slightly decreased in real terms from $349 to $341 per patient.

In 2022–23, 39% of non-hospital Medicare-subsidised referred medical specialist consultations (10.3 million services) were bulk-billed.

According to the AIHW report, patient out-of-pocket costs for specialist consultations in non-hospital settings increased from $1.1 billion in 2012–13 to $1.9 billion in 2022–23 in real terms.

On a per patient basis, there was a 38% increase in costs per patient from $213 to $294 during this period, and a 45% increase from $81 to $117 on a per service basis.

For those who did pay out-of-pocket costs, patients paid on average $294 for all non-hospital specialist attendances they received in the year.

In the 10 years to 2022–23, the average referred medical specialist fee per service increased 0.9% per year in real terms, from $140 in 2012–13 to $153 in 2022–23.

Over the same period the proportion of provider fees covered by Medicare for specialist attendances decreased by 9 percentage points, from 64% to 55%. This could be attributed to a faster growth in provider fees (37%) than growth in Medicare benefits (19%), the report authors said.

Ten specialities accounted for almost 60% of Australian Government spending on referred medical specialist consultations, according to the AIHW data. Psychiatry received the most Medicare benefits from government in 2022-23 ($405 million), with other top specialties including cardiology ($257 million), gastroenterology ($128 million), medical oncology ($111 million) and dermatology ($103 million).

The same top 10 specialties accounted for $1.6 billion (or 69%) in total out-of-pocket costs being paid by patients.

The top specialties for overall out-of-pocket costs in 2022-23 included dermatology  ($187 million), cardiology ($136 million) and obstetrics and gynaecology ($301 million).

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