Grattan Institute Report Urges Revocation of Medicare Subsidies for High-Charging Specialists

A policy brief published on Monday by the independent think tank Grattan Institute has proposed that medical specialists who engage in overcharging should have their Medicare subsidies revoked. According to the report, soaring specialist fees are causing more than 800,000 Australians to skip or delay medical care annually due to financial barriers.

The research found that specialist fees are increasing significantly faster than inflation. The report noted that the top five per cent of psychiatrists charge a median out-of-pocket fee of $669 for an initial consultation. Furthermore, some specialists were found to charge more than three times the established Medicare fee schedule.

Peter Breadon, the health program director at the Grattan Institute and a co-author of the report alongside Mia Jessurun and Thomas Shortridge, stated that providing additional government funding would not prevent certain specialists from taking financial advantage. Instead, the authors argued that a small minority of doctors should be compelled to repay the value of their Medicare funding annually.

The researchers examined the impact of Medicare rebate indexation, concluding that slow rebate adjustments were not the primary driver behind the rapid increase in specialist fees. While rebates have fallen by $9 in real terms since 2012, practitioner fees have risen by $37 in real terms over the same timeframe, outpacing the rebate decline by more than four times.

Alongside subsidy restrictions, the report called for broader structural reforms, including the development of public clinics, increased support for general practitioners to deliver more care, and expanded training programs for specialists. Mr Breadon acknowledged that while these comprehensive reforms are necessary, they will take years to implement, leaving patients facing rising costs in the interim.