Variation in outpatient consultant physician fees in Australia by specialty and state and territory

To the Editor:

We read with interest the recent study by Freed and Allen on the cost to patients of consulting a private specialist physician.1 Although not the main focus of the study, we were intrigued by the disproportionately low bulk-billing rates by physicians in Western Australia. This was highlighted in the local media,2 with an implication that WA physicians are out of step with interstate colleagues on billing practices. We acknowledge there was no such assertion in the article by Freed and Allen.1

The study findings are based on Medicare data supplied by the Commonwealth Department of Human Services.1 However, the data do not appear to differentiate between Medicare billing in private physicians’ rooms (which is the intended target of the study) or elsewhere. Hence, the bulk-billing findings may be confounded by occasions of Medicare billing occurring in outpatient clinics run by public hospitals.

Public hospital services are usually funded by state governments. Nevertheless, Commonwealth (ie, Medicare) funded clinics are permitted under an interpretation of the Health Insurance Act 1973 that allows private services to be rendered by specialists within a public hospital.3 Anyone with a Medicare card is eligible to be considered a “private patient”. If bulk-billed, the patient will not suffer any financial disadvantage — or notice any difference — compared with attending an ordinary state government funded clinic. In most cases, revenue from Medicare is not retained by the specialist, but donated to the hospital to defray clinic costs.4 This model permits the creation of new fee-free hospital outpatient services that would otherwise be unsustainable within the existing state funding. In view of the large number of outpatient visits to public hospitals, there could be an inflation of statewide physician bulk-billing rates where Medicare funded hospital clinics are widespread. In our experience, such clinics are rare or non-existent in WA.

It would be interesting to reappraise bulk-billing rates if billing episodes occurring at public hospitals could be excluded. We suspect that bulk-billing rates occurring entirely within private specialist rooms are not significantly different between jurisdictions.