The challenge facing the federal government and insurers is whether they are prepared to address the underlying causes of rising costs, rather than searching for convenient scapegoats.
As Australians continue to grapple with rising living costs, it is no surprise out‑of‑pocket healthcare expenses have again become a focus of public debate.
Scrutiny of health costs is understandable — but the way this debate is being framed risks obscuring the deeper structural problems driving costs across the private health system.
Doctors see the pressure on households every day. Patients are juggling the cost of groceries, energy bills, rent or mortgage repayments, and insurance premiums. Healthcare, unfortunately, is not immune to the inflationary pressures affecting every part of the economy.
Yet in recent months, private health insurers — and even the federal government — have singled out non-GP specialists as the primary cause of rising outofpocket costs in private health. This narrow focus may generate headlines, but it does little to help patients, and even less to fix a system under growing strain.
The Australian Medical Association is working hard to get this debate back on course for our members and their patients.
Ignoring the structural failures that have allowed out-of-pocket costs to escalate only delays reform, further hurting patients. The Medicare Benefits Schedule (MBS) has failed to keep pace with inflation, wages growth, and other real-world costs, leaving a widening gap between rebates and the true cost of providing care. Private health insurance rebates have also lagged, despite rising premiums.
These facts are consistently left out of the debate when insurers, governments, and some parts of the media attack specialist fees.
There is a certain irony in insurers ramping up criticism of doctors just days before Australians were told their private health insurance premiums would rise by an average of 4.41% from 1 April — the largest increase in almost a decade. For households already under pressure, this represents another significant financial blow, with many patients forced to downgrade their cover simply to make ends meet.
It is also worth remembering one of the biggest out-of-pocket costs Australians pay each year is their private health insurance premium — whether they claim on health services or not.
Many consumers receive less value than expected due to management expenses, exclusions, and variable rebates. Sixty-eight percent of hospital policies now contain exclusions, meaning Australians are paying more for less.
The AMA has a long history of calling out many of the claims we are seeing with respect to out-of-pocket costs. Just in the past 12 months, we have been deeply engaged — publicly and behind the scenes — in sustained advocacy to address the real drivers of out-of-pocket costs.
That work has involved detailed policy development, submissions to government, technical engagement with departments and regulators, and regular briefings with ministers and senior officials. Much of it happens away from the spotlight — and it is a long road — but it is essential to achieving lasting change.
There have been important wins along the way.
The establishment of the Private Health CEO Forum is one example. The AMA led the calls for a stakeholder-led reform body — and while the CEO Forum is not a perfect solution, it has created a vital space to discuss problems in private healthcare. The AMA remains the only organisation representing doctors on the forum, where we continue to ensure the profession’s concerns are heard.
Related
Recent federal legislation strengthening the Medical Costs Finder is another outcome of AMA advocacy.
The AMA pushed hard to ensure private health insurance rebates were included in the legislation, improving transparency for patients — and the government listened. The same legislation also outlaws product phoenixing — a long‑standing issue the AMA has raised repeatedly and consistently over many years.
Our public advocacy continues to resonate. The annual Private Health Insurance Report Card is a key accountability tool, with last December’s release drawing national attention to the growing number of Australians abandoning gold‑tier policies.
More recently, the AMA released a new position statement calling for action to prevent the abuse of insurer market power.
Alongside this work is the near daily media engagement by the AMA, highlighting lagging MBS rebates and the need for stronger system oversight, including an independent Private Health System Authority capable of driving meaningful reform across the private health sector.
The challenge facing the federal government and insurers is whether they are prepared to address the underlying causes of rising costs, rather than searching for convenient scapegoats. Sustainable reform will not come from finger-pointing or headline-driven debates.
The AMA will continue to advocate for a health system that is affordable, sustainable, and worthy of public trust. That work is often incremental and rarely simple, but it is essential. Australians deserve solutions that strengthen the system for the long term, not distractions that delay the change patients need.
Associate Professor Julian Rait is the vice-president of the federal Australian Medical Association.
This article was first published on the AMA’s LinkedIn feed. Read the original article here.
