Medibank to be first health insurer to make potential out-of-pocket costs publicly available

Private health giant Medibank will become the first insurer to make public specific information about the potential out-of-pocket costs doctors charge for common procedures and surgeries.

Consumer groups and health policy experts say it is a small but positive move towards greater transparency around out-of-pocket medical costs, but say more information, including surgeon performance data, needs to be made public for patients to be fully informed about their health care.

Since August 2018, Medibank’s ‘Find A Provider’ website has shown how often a specialist charges an out-of-pocket cost by percentage of claims, but the website now includes this information for specific, common hospital procedures too. Customers can choose what type of specialist they’re looking for, the suburb they’re looking in, and a list of those specialists within a specified kilometre radius will be generated.

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For example, people will be able to search for an orthopaedic surgeon within 10km of Melbourne. When they click on a surgeon, they will be able to see the most common procedures performed by that specialist, as well as what percentage of those procedures carried no out-of-pocket cost, a cost of up to $500, or a cost greater than $500.

Medibank’s chief customer officer, David Koczkar, said the website used data from more than 500,000 hospital admissions each year to come up with an estimate, and non-Medibank consumers could also access this information.

In March the federal government announced it would build a searchable website listing the fees for specific services from individual specialists to help patients avoid bill shock, as well as to highlight those doctors charging exorbitant fees. The website was a proposal made in the final report from the ministerial advisory committee on out-of-pocket costs. The government’s website will differ from Medibank’s in that it will display the cost of procedures in full, without private health insurance benefits, which differ between insurers. The government website will initially be limited to specialist fees for gynaecology, obstetrics and cancer services.

A Medibank spokeswoman said doctors would not be able to add hidden fees to get around the cost disclosures. “Providers are required to bill Medibank directly, and the Australian Medical Association does not support hidden fees,” she said.

Jennifer Doggett, a health policy analyst and fellow with the Centre for Policy Development, described the Medibank website as a “small but positive move in the right direction”.

“It should help at least some consumers make a more informed choice about their care,” she said.

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“However, it doesn’t replace the need for consumers to be given accurate information about the costs they will face for each procedure and for them to give informed financial consent. This tool only provides a general guide to the fees likely to be charged by a doctor, it doesn’t take into account other factors affecting costs, such as whether there are other providers or services involved in the procedure such as anaesthetists or pathology tests, or costs such as hospital fees.”

Doggett said the website did not address what she described as the main problems with private health insurance – high administrative costs, a failure to control doctors’ fees, and poor value for many young people.

“So it won’t make a significant difference to its overall sustainability,” she said.

The CEO of Consumers Health Forum, Leanne Wells, said the website was a welcome development by Medibank. But medical specialist billing would likely remain an “opaque and complicated business” for some time, she said.

“It should be reasonable for consumers to receive just one bill covering all items of a hospital episode,” Wells said.

“Surgeons should also be providing much more information, which is already collected by hospitals, about their performance. Given the cost and consequences of treatment, it should be a matter of course for consumers to have access to a specialist’s performance, such as rate of complications and avoidable hospital readmissions.”