Info for patients

Guide to medical fees in the private health system

 

Medical billing written on a clipboard.

It is important to understand the cost of your medical care in advance. Medical services in the private health system may have a fee. However, fees may be covered, or partly covered, by the Australian Government via Medicare and your private health insurance.

What does Dr Reddy’s service cost?

Each person is unique so the cost will depend on the recommended service for your particular health issue. Dr Reddy and his staff will give you detailed information about the estimated cost of the medical service recommended for you.

The relationship between a doctor and patient is built on trust and communication, so please ask Dr Reddy and his team if you have any questions.

Please remember that your doctor’s fees are separate to hospital fees. If you have a procedure or treatment in a private hospital, please check with the hospital to learn its fees.

Do I need to pay if I have Medicare and private health insurance?

You’ll need to pay since Medicare and health insurers only cover part of your medical fee. This is because the amounts that they have to pay have not kept up with rising costs over time, as measured by the consumer price index (CPI). The difference is called a gap fee or out-of-pocket cost.

Much like your house and car cost more today than they did five or 10 years ago, medical costs also increase over time. However, Medicare and insurance payments lag decades behind the actual cost of a medical service. This means the only way doctors can provide excellent care in the private health system is to charge a gap fee.

Infographic on medical fees in Australia.

Courtesy of the Australian Medical Association.


Read more information about medical fees in Australia’s private health system.

Why do doctors charge a fee?

Doctors charge a fee for the following reasons:

  • To reflect the real value of a medical service – A medical service significantly improves the quality of or saves people’s lives. Medicine stands among the most complex disciplines in the world, and doctors must have a profound level of expertise to effectively diagnose and treat medical conditions within the human body. They undergo extensive training (which takes approximately 10-15 years) and professional experience, requiring unwavering dedication in fulfilling their responsibilities.
  • To pay for the expenses of running a practice – This includes rent, staff salaries, medical equipment and supplies, security, IT, electricity and insurance. Doctors in the private health system are unable to provide a quality medical service if their fee is less than the cost to provide it.

What is informed financial consent?

Informed financial consent (informed financial agreement) happens when a person agrees to the estimated cost of a medical service after understanding both the service and its expenses before they receive it. This includes understanding the following:

  • fees for the recommended medical treatment or procedure
  • private health insurance cover
  • Medicare rebates (contributions)
  • gap or out-of-pocket fee
  • potential fee variations

It may include the cost of other services involved in your care, such as the assistant surgeon, anaesthetist, pathology, radiology and prosthetics or medical devices.

Informed financial consent should occur if Medicare, the insurer or the person pay for the medical service. You should give your informed financial consent before your procedure or treatment. This may not be possible if you need emergency medical services. If it is not possible, your medical team should provide the relevant financial information to you shortly afterwards.

When should I discuss and agree to the cost of a procedure?

Close up of a medical microscope.

The best time to discuss costs with your doctor is before confirming your procedure. Ask Dr Reddy’s administrative staff to provide an estimated cost in writing. Please remember that this will be an estimate only. Sometimes, there are unforeseen assessments or complications, which make it difficult to provide exact costs. Further, insurance coverage often varies, depending on the insurer and each person’s choice of coverage.

What will the private hospital fee cost?

The private hospital will provide you with an estimate of fees, which you will need to agree to for the procedure to take place.

Private hospitals charge for services such as accommodation, operating theatres, intensive care, prostheses (such as artificial implants and screws), bandages, imaging and tests, and medication.

If you have private hospital insurance, the amount your insurer will cover will depend on your policy and if they have an agreement with the hospital. Dr Reddy operates at both Prince of Wales Private and St Vincent’s Private Hospitals, with which most health insurers have agreements.

Speak with your health insurer to learn how much it will contribute.

Do private health insurers pay for out-of-hospital medical costs?

Health insurers do not pay for out-of-hospital (outpatient) medical services covered by Medicare. These services may include a medical consultation with your doctor in their rooms, imaging, and radiology or pathology tests. If the doctor charges more than the Medicare payment, you pay the difference.

Meanwhile, if you purchased extras (ancillary) health cover from your insurer, it may contribute limited amounts for some health services not covered by Medicare, such as physiotherapy, podiatry, dental treatment and acupuncture.

 

Sources:

Medical billing photo by Pix4free.org (Nick Youngson).

Why the gap graph by the Australian Medical Association.

Microscope photo by Chokniti Khongchum.