Cancer costs soar for patients with private health cover

Cancer treatment can be twice as expensive for patients with private health insurance.

Cancer cost shock for private patients

New research confirms that cancer treatment can be twice as expensive for patients with private health insurance.

A paper released by the Medical Journal of Australia (MJA) on Monday revealed that cancer patients with private health insurance living in an outer metropolitan area were paying an average of $4670 in gap costs for their treatment. Patients without insurance in the same area paid an average of $2510.

“Contrary to popular belief, there is no direct link between the cost and quality of care,” the report’s authors concluded.

“The higher out-of-pocket expenses for people with private health insurance or undergoing surgery indicate the importance of healthcare funding arrangements and the magnitude of the costs borne by patients.”

In 2019, Professor Christine Paul and Dr Liz Fradgley, from the Hunter Medical Research Institute, found“those with private health insurance faced double the out-of-pocket expenses as those without it, and ultimately a greater financial impact.”

“One in three cancer patients in their research had out-of-pocket costs that were higher than expected and ranged from hundreds of dollars to over $50,000.

“Privately insured patients may be charged not only the private health insurance excess and the gap between coverage and a surgeon's bill, but also costs associated with anaesthetic, diagnostic procedures or hospital stays.”

A third of their respondents needed extra financial support from family or friends.

Cancer charities have urged doctors and healthcare providers to properly inform patients about the cost of cancer treatment.

Professor Sanchia Aranda, CEO of the Cancer Council Australia, said that financial information was particularly important for those Australians with cancer who were already financially disadvantaged.

"The poorest members of our community are 33 per cent more likely to die from cancer than the richest and so clearly money is a key factor influencing cancer inequalities.

"We know that people with cancer borrow money, access their super, sell investments, re-mortgage their house, increase their credit card limits and increase their partner's working hours to cover the cost of treatment and everyday expenses."

The Consumer Health Forum's Out of Pocket Pain survey found “a system characterised by high cost, complexity and confusion”.

Of 1200 respondents, one in six reported costs had a significant impact on their lives, some forced to draw down on their superannuation. More than one third of respondents said that significant out-of-pocket costs had not been discussed with them.  

“The survey results graphically highlight a fundamental dilemma now besetting the public/private health system: Australians facing heavy medical bills are now shocked to find that the private insurance they have paid so much for over many years exposes them to yet more expense when they require treatment,” the report’s authors wrote.

The Grattan Institute’s Mr Stephen Duckett reported that private health insurance premiums could be cut by up to 10 per cent if private hospitals stopped “over-servicing”.

“A handful of ‘greedy’ doctors charge their patients more than twice the official Medicare Benefits Schedule fee.

“Only about seven per cent of all in-hospital medical services are billed at this rate, yet these bills account for almost 90 per cent of all out-of-pocket costs for private hospital patients – and patients are often not told of these costs in advance.

“Some doctors also charge ‘booking fees’ on top of procedure and consultation fees. These covert fees are not recoverable from private health insurance or Medicare – the patient is left to foot the bill.

“The higher fees have nothing to do with the skill of the surgeon or the adequacy of the Medicare Benefits Schedule. The small minority of specialists who charged more than twice the schedule fee are simply greedy.”

Mr Duckett wrote that making private health insurance more efficient could save $2 billion each year and fund cuts in private health insurance premiums.

“Capturing these savings and passing them on to patients in the form of lower insurance premiums could save private health care in Australia.”

Cancer Council advice for patients with private health insurance:

  • Ask your doctor for a written estimate of his or her fees (and if there will be a gap), who else will care for you (e.g. an anaesthetist or surgical assistant), and how you can find out what their fees will be.
  • Ask your private health fund what costs it will cover and what you’ll have to pay – some funds only pay benefits for services at certain hospitals.
  • Ask the hospital if there are any extra treatment and medicine costs.
  • Ask how much you will have to pay for out-of-hospital services when making an appointment with a doctor or service provider.
  • Ask your healthcare provider for a written quote for fees. If you receive a much higher bill, show them the quote and ask why the bill is higher.
  • Ask your GP to refer you to a doctor in the public system.
  • Some newer treatment options can be very expensive and may not offer more benefits than traditional approaches. Ask if other treatments would be as effective but cost less.
  • If your doctor charges more than the schedule fee, ask if he/she will consider an exception in your case.
  • If you can’t afford treatment, ask your doctor if the costs are negotiable – some doctors may agree to reduce their fees.
  • Find out if you can pay in instalments or have more time to pay your bill. Check if you will be charged interest.

Does this research further erode your faith in the value of private health cover? Have you reduced or dropped your cover in the past year? Has COVID-19 changed your thinking about private cover?

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    COMMENTS

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    Horace Cope
    5th May 2020
    10:16am
    "Does this research further erode your faith in the value of private health cover?"

    This is a loaded question the same as the one; "Have you stopped beating your wife?" It makes an assumption that everyone has no faith in private health cover. The right question should be; "Does this research make any difference to the way you think about private health cover?"
    Robene
    5th May 2020
    10:57am
    Unfortunately it's not cancer treatments where privately insured patients are bearing the out of pocket expenses. A good friend had hip surgery yesterday and despite having the highest possible private health cover, she was required to pay over $6,000 before the operation was undertaken.
    Another good friend's husband had back surgery in March and they too were out of pocket by over $4,000.
    godfree
    5th May 2020
    11:02am
    I didn't think public patients had to pay any cost for necessary treatment?

    " Patients without insurance in the same area paid an average of $2510."
    Ted Wards
    6th May 2020
    8:40am
    It was talking about outer metro areas.. not sure if that has anything to do with it?
    Justsane
    6th May 2020
    2:49pm
    Yes. This is the most disturbing part of the article for me: Patients without insurance in the same area paid an average of $2510.
    Tanker
    5th May 2020
    11:04am
    Our health care system is out of control with doctors being able to charge whatever fee they like with no comeback. Given that the taxpayers fund a large part of private health insurance the government, as the body that collects and distributes tax, should now step in and control doctors fees.
    It will be a brave government that take that on as the AMA are the most powerful trade union in the country but they show a distinct lack of any ethical responsibility when it come to the behaviour of their money grabbing members.
    Eddy
    5th May 2020
    1:04pm
    I do not recall if Tanker has been an advocate of a 'free market' but this 'complaint' about doctors fees is an example of a 'free market' in operation. The same free market that sees petrol retailers charge what they choose for their products, or drug companies for their life-preserving drugs, or supermarkets for products in short supply. As a community we can choose whether we support 'free market' political parties or 'controlled market' political parties. We get the system we elect so do not complain about the 'unintended consequences' of our electoral decisions.
    Viking
    5th May 2020
    2:35pm
    Eddy, sorry but that's where you are wrong. We elect the government we are promised but it then ignores the electorate to legislate on behalf of its paymasters, the unions, big business and the miners. Its not democracy its auctionocracy, the spoils go to the highest bidders.That's why we have such high private health costs.
    Last year my wife had major heart surgery. The surgeon told us he could operate in the public for free or the private section of the hospital, the care would be the same. I wanted her to have a private room and for that privilege we received a $12,000 bill from the surgeon and $2,000 for the anaesthetist but all free in the public section of the same hospital. Do you think that would change if we voted differently?
    It is the same with the flu shots. The first releases are supposed to go to the elderly, very young and vulnerable for free via GPs.. But the first releases actually go to the pharmacists where you have to pay. Why do you think that is? Its because the pharmacy guild bribes the political parties!
    Eddy
    5th May 2020
    4:22pm
    I was making the point Viking that we live in a free market economy (although not a true free market as some prices, such as taxi fares, are regulated) and for that privilege we have to pay a price. Nothing comes for free. As for the difference between what political parties promise before an election and what they give after, that is a different discussion. When we stand in the polling booth generally we choose between Liberal and Labor, I was suggesting we consider giving your first preference to other parties, particularly in a Senate election. Nothing like not having a majority on the floor of parliament to focus the governing parties minds on serving the people rather than their donors. That choice is up to all of us.
    As for your wife's surgery I presume you were given a 'quote' for the cost of going private and given a choice whether to go public or private, you selected private. I went through the same thing when I was diagnosed with cancer and quoted somewhere in the area of $11000 with about $2500 being refunded by Medicare. Not that I had to pay, being a veteran I was covered by DVA.
    Viking
    5th May 2020
    8:24pm
    Eddy, My pont is we dont get the governments we vote for; remember no GST from my government, no carbon tax under my rule, no cuts to the ABC or SBS , We're in the black-we weren't and aren't etc etc. Yes my wife got a quote for $7,000. Again my point is these exhorbitant fees ever get fixed because the government doesn't answer to the people it answers to the lobbiests, their paymasters.
    Tanker
    5th May 2020
    11:04am
    Our health care system is out of control with doctors being able to charge whatever fee they like with no comeback. Given that the taxpayers fund a large part of private health insurance the government, as the body that collects and distributes tax, should now step in and control doctors fees.
    It will be a brave government that take that on as the AMA are the most powerful trade union in the country but they show a distinct lack of any ethical responsibility when it come to the behaviour of their money grabbing members.

    5th May 2020
    11:11am
    I had cancer treatment that cost about $80,000 using my private health insurance. It was all covered by Medicare and my Health Fund. Cost me nothing.
    Youngagain
    5th May 2020
    7:01pm
    Forgive us if we don't believe you, Retiring Well. That simply NEVER happens. There is ALWAYS a gap that Health Funds don't cover.
    Youngagain
    5th May 2020
    7:01pm
    Forgive us if we don't believe you, Retiring Well. That simply NEVER happens. There is ALWAYS a gap that Health Funds don't cover.
    inextratime
    5th May 2020
    11:23am
    I have had four operations for cancer and on each occasion I paid a gap. I also had to pay for the chemo therapy, two lots of chemo with the cost of the chemical every two weeks despite having private health cover. The amount totalled around $20grand. One surgeon explained that the cost was political and due to the lack of $ they received from the government plus the cost of indemnity insurance which was hefty and compulsory. I paid willingly as I am still alive 14 years later !!
    maxchugg
    5th May 2020
    11:26am
    Years ago I had cancer surgery which was very time consuming for the surgeon. After I arrived home I was followed by seemingly endless bills from people involved in my surgery,
    The surgeon's gap was very small, the anesthetist charged around three times as much as the surgeon but offered a 50% discount if I paid within a few days.
    Later I had dealings with several people who had the same surgery as I did, only as public patients. I. an insured patient, was out of pocked by a couple of thousand dollars, those
    who used the public system paid nothing.
    The obvious solution is to have urgent surgery in the public system, unfortunately this isn't quite so easy. A cancer is usually detected when your GP refers you to a specialist. The specialist tells you that he doesn't work in the public hospitals, so what next?
    Do you go back to your GP and tell him you want your surgery done in the public system? And if you do, how long will you have to wait for the surgery?
    Dropping private health insurance appears to be attractive but then there is the matter of wait times for so-called elective surgery, a name which suggests that you are having the surgery for fun or trivial reasons. As I have mentioned previously, I had cataract surgery on both eyes as a preventative for glaucoma, all was one in less than three months. A friend who was not insured, and gradually going blind waited three years to have surgery on one eye, then almost as long for the second eye to be treated.
    Until recently the government stopped elective surgery, leaving the beds in the private hospitals available for COVID19 patients. Without private health insurance these beds would not have been available, and for a time remained unavailable to those who had funded them. Yet this did not prevent the local newspaper publishing a complaint from someone lamenting the "largesse", presumably meaning the concession available to seniors with health insurance.
    In reality, recognition should be given to the massive savings that have accrued to taxpayers by those who have taken responsibility for their healthcare and after retirement government should subsidize at least 75% of the cost of post retirement health insurance.
    maxchugg
    5th May 2020
    11:26am
    Years ago I had cancer surgery which was very time consuming for the surgeon. After I arrived home I was followed by seemingly endless bills from people involved in my surgery,
    The surgeon's gap was very small, the anesthetist charged around three times as much as the surgeon but offered a 50% discount if I paid within a few days.
    Later I had dealings with several people who had the same surgery as I did, only as public patients. I. an insured patient, was out of pocked by a couple of thousand dollars, those
    who used the public system paid nothing.
    The obvious solution is to have urgent surgery in the public system, unfortunately this isn't quite so easy. A cancer is usually detected when your GP refers you to a specialist. The specialist tells you that he doesn't work in the public hospitals, so what next?
    Do you go back to your GP and tell him you want your surgery done in the public system? And if you do, how long will you have to wait for the surgery?
    Dropping private health insurance appears to be attractive but then there is the matter of wait times for so-called elective surgery, a name which suggests that you are having the surgery for fun or trivial reasons. As I have mentioned previously, I had cataract surgery on both eyes as a preventative for glaucoma, all was one in less than three months. A friend who was not insured, and gradually going blind waited three years to have surgery on one eye, then almost as long for the second eye to be treated.
    Until recently the government stopped elective surgery, leaving the beds in the private hospitals available for COVID19 patients. Without private health insurance these beds would not have been available, and for a time remained unavailable to those who had funded them. Yet this did not prevent the local newspaper publishing a complaint from someone lamenting the "largesse", presumably meaning the concession available to seniors with health insurance.
    In reality, recognition should be given to the massive savings that have accrued to taxpayers by those who have taken responsibility for their healthcare and after retirement government should subsidize at least 75% of the cost of post retirement health insurance.
    80 plus
    5th May 2020
    12:19pm
    I agree with all the comments and the articles conclusions, we have had to pay a fortune in gap fees, BUT WE WERE TREATED within weeks rather than have to wait months, that is one reason the poor die on average before the wealthy,with some illness delay can be fatal.
    sunnyOz
    5th May 2020
    3:35pm
    I have seen both sides of this. A close female single friend had cancer treatment for many years. She had top Private Health Insurance, but in the end, had to sell her small unit due to the huge gap costs. And for singles can be harder - no-one to run her around for medical treatment, tests, etc. Often having to take a taxi, at least $80 each way. She is now renting with her grand daughter.
    Then I see a neighbor - in the past 4 years alone, he has had a Cochlear implant (done in his 70's), both knees and a hip replacement, heart surgery, nose operation (breathing problems), full upper & lower set of dentures, then an operation to remove half his foot due to diabetes problems. NO Private Health Insurance, never had more than 8 months wait, and has never paid a cent. Because his wife was also in hospital due to psychiatric care, he received free transport.
    Something is definitely wrong. As my friend said, the ONLY benefit she got was seeing specialists about 2 weeks quicker than others, and having a private room in hospital. And she ended up losing her house.
    I had booked in to have my denture plate redone (worn down). As it is not an emergency, I just have to wait. I'm also due for eye check and new glasses - again will have to wait. I do object to paying for services that I am not permitted to uses.
    I am in the process of reassessing my PHI now, and cannot believe the wrong, and misinformation, I am getting from different funds. I write down everything, and print off info. Some are like Trump - 'no, I never said that'.
    KB
    5th May 2020
    5:41pm
    Have had three cancer operations which were covered by HCF. Needed to have radiotherapy while in hospital. The oncologist told me it was cheaper to be in hospital; Still $7000out pf pocket
    KB
    5th May 2020
    5:41pm
    Have had three cancer operations which were covered by HCF. Needed to have radiotherapy while in hospital. The oncologist told me it was cheaper to be in hospital; Still $7000out pf pocket
    Youngagain
    5th May 2020
    6:59pm
    Doesn't just apply to cancer treatment. Nearly all providers put their fee up the moment they learn you have private insurance. It's the reason I cancelled my private health. Had a simple surgical procedure that cost thousands. It had to be repeated months later, and I had it in a public hospital for free. Quality of care was 1000% superior.

    Friend whose wife had cancer said cancelling insurance before her diagnosis was the best move he ever made. She had exactly the same treatment as others who had private health insurance but paid nothing, while they received hefty bills. She also got free household help and childcare.
    Ted Wards
    6th May 2020
    8:39am
    Could this be why hundreds are pulling out of private health care? What with the cost of the premium, and the out of pocket expenses, is it worthwhile for the average person who has no real health issues to be a part of?
    Mariner
    6th May 2020
    9:41am
    If only on the pension it is not worth having health insurance. For those like us on a part pension and being deemed for every extra $1000 in the accounts it is OK to have insurance; you give money to the insurance company and you get a higher part pension.
    My wife had a cataract operation last year, no waiting, straight in, one eye first and a week later 2nd eye. Fantastic result, it did cost her some gap payment. A friend of ours had to have the same treatment, public wait list a mile long. Was offered to have the eyes done for cash payment at $3000 per eye. My mate in Cairns waited for a long time for the same operation, 4 times in hospital, 4 times sent back home, more urgent cases coming in to the clinic. He died recently still with his cataracts, he was in his 80s.
    If you have the money insure yourself, if not trust the public system. I grew up with compulsory health insurance in Europe, my country was not part of the Marshall plan where the National Health Service was introduced.
    Chris B T
    6th May 2020
    9:44am
    Depending which State/Territory you live and systems in place when you have to travel to major city base hospitals.(I live in a outer Region but many Improvements have being made, the need to Travel Visit a Major City Hospital has been Reduced with WMO's)
    The last 2 of my cancer treatments I paid nothing for Doctors/Hospital/Cemo/Radiation.
    Travelling cost subsidies and Accommodation Subsidies for outpatient as daily visits through the week for the last time was 6 weeks Radiation.
    Medicare and Healthcare card no Private Cover only expense was shortfall on accommodation outside of Hospital all Hospital stays Public, sometimes placed in Private Ward as needed no costs.
    All of these attendances were done within a month of Diagnoses.
    That was 10 years ago for last treatment.
    Big Kev
    11th May 2020
    2:08pm
    Another cost that would not be included in these studies is the specialist's "administration" cost. A non claimable cost, I had a charge of $5000 for bariatric surgery and $500 for neurological day surgery. New saying, ' Where there's a pain, there is big bucks to be made!'.


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