Financial toxicity in clinical care today: a “menu without prices”1

David Currow and Sanchia Aranda
Med J Aust 2016; 204 (11): 397. || doi: 10.5694/mja16.00182
Published online: 20 June 2016

Out-of-pocket costs are rising rapidly and can influence treatment decisions and health outcomes

Australia delivers health outcomes that rank well internationally, with per capita spending demonstrably less than that of the United States. Of concern, Australia’s out-of-pocket costs for health care are sixth highest among Organisation for Economic Co-operation and Development countries,2 despite universal health insurance. These out-of-pocket expenses accounted for 57% of non-government health expenditure in 2011–12, or over 17% of all health care expenditure.3 Health care costs in Australia continue to rise well above the consumer price index. The net burden of costs are reported by clinicians to influence some decisions that patients make, with the potential for detrimental health outcomes for individuals and for Australia’s health as a whole.

The average equivalised weekly disposable household income in 2013–14 was $998, with a median of $844.4 About half of all households therefore have a weekly net income of less than $844, yet that income has to support out-of-pocket health expenses. There are also limits to what is covered under different aspects of the safety net. Further, many aspects of community-based care are associated with part or all of the cost being borne by the patient, in many cases with no safety net provisions (wound dressings, incontinence pads, community nursing and allied health visits).

In cancer care, patients often face tough decisions as new unsubsidised therapies become available. An ageing population, innovations (some with very marginal benefits) and the risk that some procedures are overused or harmful all contribute to unnecessary financial (and emotional) pressure on patients and their families. Procedures and interventions, at times with marginal health gains, are being promoted actively, frequently with high costs and little meaningful benefit in terms of quality of life or survival. In the context of ongoing outcome disparities based on socio-economic status, our aim must be timely access to world class care for all Australians, regardless of financial circumstances.

In the Australian context, financial disclosure is not only how much a procedure will cost but, crucially, whether there are alternatives that offer similar benefits at less cost to the patient. This may be as important to the patient as the side effects or risks of an intervention. Most starkly, the omission of information from a private clinician regarding options in the public sector reduces informed financial choice and increases the potential for significant financial and health disadvantages.

Failing to inform patients about comparative waiting times in public and private systems falls short of fully informed (financial) consent. Indeed, national data demonstrate that public surgical waiting times for a sample of cancers are very short.5 Publicly available data on waiting times and service quality are critical for supporting informed treatment decisions, especially when out-of-pocket expenses can vary from zero to tens of thousands of dollars for the same procedure.

Value in health care is defined as outcomes relative to cost.6 In considering this from a patient’s perspective, it is imperative to not only question outcomes but to understand the true cost for the whole episode of care — the out-of-pocket expenses, the contribution made by the community through Medicare, and any supplementary private insurance. Informed choice should be based on more than the costs charged by an individual practitioner and those incurred by related pathology, imaging and anaesthetics. Informed choice now needs also to account for the extreme variations in the prices charged by identically credentialed practitioners within Australia undertaking the identical procedure.7

International data suggest that the consequences of high out-of-pocket costs include the potential for poorer compliance with ideal care, including prescribed medications that are necessary for best outcomes.8,9 To make decisions about what is often a long treatment pathway across multiple modalities, patients need a comprehensive and early understanding of the financial impacts of treatment, time away from work and other costs, and the opportunity to seek financial advice and assistance early as needed. Indeed, in one survey, people only sought help when the financial burden was starting to cause significant difficulties.9

Arguably, failure by medical practitioners to disclose all of the financial costs affecting patients’ decisions is a cause of avoidable suffering for tens of thousands of households across Australia each year.10 A new standard for financial disclosure is required — a standard that moves beyond disclosure of the costs of a single procedure to one that accounts for the costs of a full pathway of treatment and all the alternatives open to the patient. The issue of financial toxicity in Australian health care requires open debate supported by population- and individual-level data on rapidly rising out-of-pocket costs, and advocacy that places patients’ outcomes at the centre of any debate about the profession’s increasing demands on patients’ wallets.

Provenance: Commissioned; externally peer reviewed.

  • David Currow1
  • Sanchia Aranda2

  • 1 Cancer Institute NSW, Sydney, NSW
  • 2 Cancer Council Australia, Sydney, NSW

Competing interests:

No relevant disclosures.


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access_time 07:20, 20 June 2016
Mark Sinclair

I fully agree that patients have a right to know their out-of-pocket costs for care. The medical profession has a responsibility to make this information available to patients, who should not be expected to break into their life savings, or borrow money, to fund their necessary healthcare. However I feel the authors have presented only one side of the story in this editorial.

Australians do indeed have universal health insurance, via the Medicare system. However, the Medicare schedule has been inadequately indexed every year for over 30 years, and is now in the middle of an 8–year freeze. It has not even remotely kept pace with inflationary pressures on medical practice. This is the primary reason for out-of-pocket medical expenses, but it is not mentioned.

50% of Australians have a weekly income of less than $844. I would contend that very few of them have out-of-pocket expenses for their medical care, especially if a diagnosis of cancer is involved. There may well be out-of-pocket expenses for other resources, such as pharmaceuticals, but this is not within the control of doctors. The vast majority of GP visits and also, according to government data, the vast majority of hospital inpatient medical services, result in no out-of-pocket expense at all.
The article also discusses the issues of innovations with marginal benefit, and procedures that are overused or even harmful, in the care of patients with cancer. I would suggest that many such innovations and procedures are provided by non-doctors, some of whom have “qualifications” which could be described as questionable. These services are (quite appropriately) not subsidised, but unfortunately result in out-of-pocket expenses to patients. As mentioned, the statistics on bulk billing by GPs and ‘no gaps’ fees for inpatient care , contradict the authors’ determination that doctors are making “increasing demands on patients’ wallets”, as the vast majority of these services result in no out-of-pocket expenses.
I don’t believe that the authors have presented evidence that out-of-pocket costs, purely due to doctors’ fees, are increasing. However, out-of-pocket expenses for other aspects of health care, including the “questionable” practitioners to whom I refer, certainly do exist.

Competing Interests: No relevant disclosures

Dr Mark Sinclair
Private practice (anaesthesia)

access_time 05:09, 1 July 2016
David Currow

Sinclair1 rightly points out that:

- out-of-pocket costs for medical care in the public system are less than in the private sector; and

- that there are other clinicians who generate out-of-pocket clinical expenses, not just for doctors.

However, available data do not support that out-of-pocket expenses are uncommon or inconsequential. Primary care consultations, specialist consultations, imaging and pathology services increasingly incur gap payments. No patient group is immune to this, including people with cancer. Indeed, people with cancer may be a group who are especially vulnerable to practitioners charging well above the schedule fee.

Cost should not be a barrier for people in Australia for items listed on the Medicare nor Pharmaceutical Benefits Schedule. These costs should be transparent and monitored, and should not be a reason for people to abandon treatment.

While in many situations, medical out-of-pockets might seem minor, cumulatively they are part of an increasing financial burden for patients and families. In part this may account for the continuous widening of the gap in cancer outcomes between the wealthy and the poor in most Western countries.

1. Sinclair M (2016, June 20), Response to ‘Financial toxicity in clinical care today: a “menu without prices”1’.

Competing Interests: No relevant disclosures

Prof David Currow
Cancer Institute NSW

access_time 01:26, 5 July 2016
John William Stokes

Much in this article is true and it is the change in medical practices driven by the use of item numbers, rather than medical need, that now drives activity, increases unnecessary procedures and investigations, and promotes extra and questionable referral patterns. However the real message should be that transparency and accountability should be required in both public and private sectors.

In the interests of transparency and accountability, I believe more information about the billing of private patients needs to be included in this article. This concerns the increasing generation of private fees in our public hospitals, sometimes even to patients who have no medical insurance. My point is that the problem is not isolated to the private sector.

The article states "Most starkly, the omission of information from a private clinician regarding options in the public sector reduces informed financial choice and increases the potential for significant financial and health disadvantages" but this does not recognise that the same issue occurs in the public sector. For example, when patients are not informed of the private practice dollars which are generated and which may benefit full-time practitioners, and also benefit the institution in which they work. Sometimes, the advantage to full-time practitioners occurs when there is an after- hours transfer of a private patient ,who is being cared for and treated by the full-time practitioner , to a private hospital. Some of these 'private' fees are generated by registrars and other practitioners in the names of the treating specialists.

Competing Interests: No relevant disclosures

Dr John William Stokes
James Cook University

access_time 10:46, 13 July 2016
Sanchia Aranda

We agree completely that the issue of out of pocket costs is not confined to the private sector but reflects the complex interplay of public and private practices even within our public hospitals. Indeed, our call for a new standard of financial disclosure would aim to do exactly what Dr Stokes suggests, and that is to bring transparency and accountability to the system as a whole. The editorial did not allow a comprehensive analysis of the many issues leading to financial toxicity for patients, rather our intent was to open the discussion. Thank you for making a contribution to the debate.

Competing Interests: No relevant disclosures

Prof Sanchia Aranda
Cancer Council Australia

access_time 03:49, 18 July 2016
Harry Hohnen

Concerning health-related out-of-pocket expenses, Currow and Aranda write that “A new standard for financial disclosure is required — a standard that moves beyond disclosure of the costs of a single procedure to one that accounts for the costs of a full pathway of treatment and all the alternatives open to the patient.” 1 This claim is supported by the preliminary results of our ongoing investigation into the out-of-pocket expenses of people undergoing cancer treatment in four rural regions of Western Australia. The challenge of informed choices regularly arises in our study: participants report confusion as they navigate the fine print of insurance policies, the public and private hospital systems, and imaging and pathology centres. Lack of transparency concerning cost of treatment, testing and procedures for people who initially access private health services can result in ‘decision regret’; choosing costly treatments where less expensive alternatives were available. We would also emphasise that the financial burden is often exacerbated for people living in rural and remote regions, who face the added costs of travel and accommodation, as well as a constrained ability to access financially advantageous treatment pathways.2-4 While we are yet to complete recruitment and analyse a complex set of variables – including cancer type, health insurance status, proximity to a regional cancer centre, treatment type and length, and socio-economic status – there is marked variability in expenses among participants of the study. The net out-of-pocket expenses reported by participants (n=360) in the first six months of diagnosis and treatment range from non-existent to exorbitant (up to $17,200), with a median of $1024. For participants who have responded to our final questionnaire (n=208), expenses associated with treatment and/or loss of income have not affected treatment decisions for the majority; however, for a significant minority (26%), these factors have changed their treatment decisions, in some cases altering treatment pathways. As evidence accumulates it is important to consider translational opportunities; as a funding collaboration between the WA Cancer and Palliative Care Network and the Cancer Council WA, this study will inform policy decisions.

1. Currow D, Aranda S. Financial toxicity in clinical care today: a "menu without prices". Medical Journal of Australia 2016; 204: 397.
2. Zucca A, Boyes A, Newling G, et al. Travelling all over the countryside: Travel-related burden and financial difficulties reported by cancer patients in New South Wales and Victoria. The Australian Journal of Rural Health 2011; 19: 298-305.
3. Gordon LG, Ferguson M, Chambers SK, et al. Fuel, beds, meals and meds: out-of-pocket expenses for patients with cancer in rural Queensland. Cancer Forum 2009; 33.
4. Gordon LG, Walker SM, Mervin MC, et al. Financial Toxicity: a potential side effect of prostate cancer treatment among Australian men. European Journa

Competing Interests: Our study is funded by the Cancer Council WA and WA Health.

Dr Harry Hohnen
The University of Western Australia - School of Surgery

access_time 02:38, 22 July 2016
Sanchia Aranda

We applaud Hohnen et al for undertaking a systematic analysis of out of pocket medical costs for their population. (1) This kind of research is needed in all jurisdictions and follows on recent South East Asian analyses showing that around 25% of families are tipped into poverty by a cancer diagnosis. It is important to remember though that direct medical out of pocket costs, while important, are compounded by loss of income and other costs incurred by being ill that are not captured in this analysis.

1. The ACTION Study Group. Catastrophic health expenditure and 12-month mortality associated with cancer in Southeast Asia: results from a longitudinal study in eight countries. BMC Medicine 2015 13:190

Competing Interests: No relevant disclosures

Prof Sanchia Aranda
Cancer Council Australia

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