NACCHO #HealthElections16 : Health system facing crisis as doctors’ incomes surge by 30pc


“Rampant over-servicing and a lack of competition and transparency has seen the average ­incomes of surgeons, anaesthetists and specialist physicians surge almost 30 per cent in five years, putting extra strain on a health system near breaking point.”

The Australian April 25

“The literature review from the Australian Healthcare and Hospitals Association (AHHA)  found a number of contributory factors associated with DAMA among Aboriginal and Torres Strait Islander peoples. Significant factors included a lack of cultural safety, a distrust of the health system, institutionalised racism, miscommunication, family and social obligations, and isolation and loneliness.”

Hospitals must change to support Aboriginal and Torres Strait Islander patients (see article below )

The nation’s $150 billion a year health bill is on track to rise more than 6 per cent a year without major reforms to the medical system and supply chain.


These structural problems are ­illustrated by the three elite ­medical specialties, at the top of the supply chain, being ­entrenched as the nation’s highest paid occupations.

Health insurance chiefs have called for immediate reform of the system to prevent excessive rises in premiums and help prune waste estimated by most experts to exceed 15 per cent, or $20bn a year, across the health system.

The doctors’ income data, based on recently released Australian Taxation Office statistics, comes as government and insurance funders try to rein in ballooning health expenditure and as some disadvantaged patients continue to struggle with costs.

According to the ATO, the highest paid occupation in 2013-14, on average, was a surgeon on $375,097, followed by anaesthetists ($331,867) and specialist physicians ($279,022); the average taxable income was $57,134.

Compared with five years ago, surgeons are earning $77,342 more (a 25.98 per cent increase), anaesthetists $75,068 more (29.23 per cent increase) and specialist physicians $63,582 more (a 29.51 per cent increase).

The average taxable income rose 26.88 per cent over the same period, or about $12,103, but from a much lower base.

The comparison was more stark using the Australian Bureau of Statistics’ measure of average wages, which rose 15 per cent over the five years to December, barely quicker than the consumer price index, which rose more than 11 per cent.

At the same time, the number of doctors has surged, increasing more than 21 per cent per capita since 2006, according to research by Macquarie Bank, vastly outstripping growth in GPs over the same period.

Despite the increases, governments and insurers are constrained in their attempts to achieve greater efficiency.

The major parties will enter the federal election campaign desperate to gain patients’ trust — the Coalition has accused Labor of previous mismanagement while Labor is rallying voters to “Save Medicare” — and to continue to negotiate public hospital funding with the states.

Former chief executive of the Private Health Insurance Administration Council Shaun Gath told The Australian last week that the “real villain” in health costs was the Constitution preventing any attempt by parliament to restrain doctors’ bills.

“In the 1946 referendum, we gave the parliament power to make a range of social security payments, including hospital and medical benefits,” Mr Gath said, “but the section also stops parliament from controlling what ­doctors charge — so one step in that direction and it’s off to the High Court.”

Despite revelations in The Weekend Australian of more than $20bn of wasted spending in health, including at least $500 million a year on the Medicare Benefits Schedule alone, the Turnbull government at the weekend announced the “largest-ever commonwealth investment in front­line public dental services”.

Health Minister Susan Ley, who is overseeing as many as six reviews into aspects of the taxpayer-funded system to save money, announced a new $5bn “investment” in dental care for children and low-income earners at the weekend.

“We are significantly increasing commonwealth investment in frontline public dental services and we expect the result to be an extra 600,000 public dental pat­ients treated every year as a direct result,” Ms Ley said.

Health groups questioned whether the policy was more about cost-shifting to the states, where there are already significant dental waiting lists.

Health fund NIB has pointed out that one in three prostate surgeons is charging between $9500 and $10,000 for prostate surgery, more than twice the AMA recommended fee. Yesterday, the president of the Urological Society of Australia and New Zealand, Mark Frydenberg, acknowledged that high-charging urologists threatened to damage the profession’s reputation. “We are concerned patients may not access the proper care or are putting themselves under financial stress,” Professor Frydenberg said from the society’s annual scientific meeting on the Gold Coast.

Private Healthcare Australia, which represents health funds, has charted the growth in benefits paid for services where medical practitioners set the fee.

It is running well above inflation and even growth in the AMA’s recommended fee list, which is well above the Medicare Benefits Schedule currently subject to a government freeze on­ ­indexation. Some surgeons have been charging 10 times the AMA’s recommended fee.

“When household incomes are rising at 1.8 per cent per annum, and premium increases are 5-7 per cent per annum, we know our members are making substantial sacrifices to maintain private health cover — this magnitude of premium increase year after year is simply unsustainable,” said Private Healthcare Australia chief executive Rachel David.

The Royal Australasian College of Surgeons investigates complaints of overcharging and its leaders, believing such cases are a minority, have pushed for greater transparency, an approach that seems to be gaining support across the professions.

Nicholas Talley, the head of the Committee of Presidents of Medical Colleges, told The Aus­tralian he expected the problem of overcharging to become a formal agenda item. “My personal view is that we have a professional obligation to look after people effectively, and that includes ensuring they are only charged appropriately and fairly,” he said.

David Watters, president of the Royal Australasian College of Surgeons, said the college did not have a fee schedule and did not know what fees surgeons charged, saying it could see only the range noted by private health insurers.

He said the college supported the government’s review of the MBS and believed there was a lot of opportunity to improve the system. “There is no doubt out-of-pocket expenses have risen more steeply than other costs.

“I think the way to address that is to give people information on what fees are reasonable and make sure that doctors don’t charge for too many procedures.”

Bruce Robinson, dean of the Sydney Medical School reviewing the MBS for the commonwealth, told a recent forum the list of government rebates was seen as “a funding instrument, not as a tool for better care”. “There is frustration that the MBS has not been overhauled in 30 years,” Professor Robinson said.

He wants the MBS to fund only evidence-based services, with rules and monitoring to prevent over-servicing and inappropriate care from GP clinics to hospital operating theatres.

Having convinced the government to back his idea of an item-by-item review of the MBS, Professor Robinson is proposing the creation of a permanent Nat­ional Institute for Health Research to improve health systems and service delivery.

A new reform document produced by The George Institute for Global Health and the Consumers Health Forum, following a roundtable involving more than 35 health experts, called for consumers to have access to information on practitioners’ performance and costs.

Australian orthopedic surgeon Ian Harris, in his book Surgery: the Ultimate Placebo, has ­revealed that a large share of surgical procedures — such as knee arthroscopies — have little or no rigorous scientific basis. “In the US, something like a third of all medical spending is on unnecessary care,” he told The Australian, suggesting publicly funded surgical procedures in Australia could be similar.

In the face of variation in specialists’ fees, which studies show are not highly if at all correlated with quality, NIB, the third largest health insurer, is trying to boost transparency. “Our goal is patients will be able to see the average cost of a joint replacement, for instance, in the GP consultation room. At the moment price transparency is almost non-existent, which can leave patients with significant out-of-pocket costs,” said chief executive Mark Fitzgibbon.

Hospitals must change to support Aboriginal and Torres Strait Islander patients

The latest Issues Brief from the Australian Healthcare and Hospitals Association (AHHA) Deeble Institute for Health Policy Research Summer Scholarship Program has outlined the need for institutional change in hospitals to reduce rates of Aboriginal and Torres Strait Islander patients discharging against medical advice (DAMA).

The Deeble Institute for Health Policy Research Issues Brief, An evidence-based approach to reducing discharge against medical advice amongst Aboriginal and Torres Strait Islander patients by Summer Scholar Caitlin Shaw from James Cook University, explored the causes of higher rates of DAMA among Aboriginal and Torres Strait Islander peoples, particularly in rural and remote areas.

The Issues Brief found the current high levels of DAMA suggested acute care settings such as hospitals are not effectively addressing the concerns of Aboriginal and Torres Strait Islander patients in order to keep them engaged in care for the duration of their treatment.

The literature review found a number of contributory factors associated with DAMA among Aboriginal and Torres Strait Islander peoples. Significant factors included a lack of cultural safety, a distrust of the health system, institutionalised racism, miscommunication, family and social obligations, and isolation and loneliness.

Ms Shaw wrote that the available evidence showed enhancing cultural safety in hospitals would be instrumental in addressing self-discharge rates. Aboriginal Health Workers (AHWs) and Aboriginal Liaison Officers (ALOs) have a crucial role in providing culturally appropriate care, and the brief proposed greater employment and utilisation of such health workers. However, it cautioned against the cultivation of a mentality that would see AHWs and ALOs assume sole responsibility for Aboriginal and Torres Strait Islander patients.

Coordination between acute and community-based care providers can aid in offering healthcare services that are more accessible and culturally acceptable,” Ms Shaw wrote.

“Improved community care and health education may encourage Aboriginal and Torres Strait Islander patients to remain in care for the duration of their treatment.”

AHHA Acting Chief Executive Dr Linc Thurecht said the Issues Brief showed the importance of working with Aboriginal and Torres Strait Islander peoples and representatives to improve health outcomes.

This is a timely reminder that cultural awareness is a powerful tool in helping the health sector to reduce health inequality between Aboriginal and Torres Strait Islander peoples and non-Indigenous Australians,” he said.

For more information on the AHHA, visit Read this media release online here. View the Deeble Institute for Health Policy Research Issues Briefs here.

The Australian Healthcare and Hospitals Association is the national peak body for public and not-for profit hospitals, community and primary healthcare services, and advocates for universal, high quality and affordable healthcare to benefit the whole community.


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