The true cost of undercharging

5 minute read

Fair billing for your work doesn’t end with setting a single gap fee.

I wrote recently about a conversation with a friend and colleague whose new patient’s 30-minute appointment blew out to an hour, with the same paltry $20 gap in play.

When I suggested to her she stagger her appointment times as well as raise her gaps, she said: “I’m too burnt out, Imaan.”

I was last in proper general practice work back in 2020 when covid struck. It was a private billing practice in which I still instituted billings that were different from the other practitioners’. Rather than a flat gap fee of e.g. $20, I would increase the gap according to how long I spent with them, in five levels between under 15 minutes and up to 60 minutes (not reflecting the Medicare-set time intervals). And the longer I spent, the more I added to the gap, to compensate for the diminishing returns of the rebates.

There was clear signage on my door and in my room, where patients could see it. The practice manager initially pushed back a bit, but I held firm, and reception staff adjusted rapidly.

Unlike many of my peers, who charged the same gap across all levels, my gaps went up the longer a patient was in the room with me. Why?

Let’s do the maths, using my friend above as an example, with her $20 gap across all time tiers.

The new Level B rebate is $41.20. With her $20 gap, the fee is $61.20.

For a level C, up to 40 minutes, the rebate is $79.70 and her fee $99.70.

For a level D, beyond 40 minutes, the rebate is $117.40, her fee is $137.40.

So for a 60-minute consultation, she billed a total of $137.40.

If she’d seen two patients in that hour, for up to 30 minutes each, she’d have billed $99.70 x 2 = $199.40.

If she’d instead seen four patients in that hour, for 15 minutes each, she’d have billed $61.20 x 4 = $244.80.

The AMA suggests the appropriate fee for a Level B to be around $86, which is already twice the patient Medicare rebate. I do not have access to their recommended Level C and Level D, but I’m sure it is a similar multiple.

So my friend not only accepted less than half of the AMA-suggested fee for her time, she also accepted less than halfof what she’d have billed at a paltry gap fee of $20 had she seen four patients instead of the one.

Who won here? Not my friend, that’s for sure.

Before a member of the public says “But $138 is a great hourly rate” let me remind them – this is her billings. She’ll pay 35% of that as service fee to the clinic she works at, then of the remaining 65% she’ll be responsible for her own superannuation, sick leave, carer’s leave, annual leave, none of which is covered as a self employed person. Add in any HELP debt outstanding, medical indemnity, CPD etc. … it would be cheaper to not work as a GP, truly.

Then we wonder why people are leaving general practice in droves and no one wants to sign up for it.

What I’d have loved for my friend to say is: “Thanks Imaan! Please tell me how I can bill better and charge for my care – which is clearly excellent enough that my books are filled out weeks in advance, in spite of which I feel frazzled and burnt out.”

It can be scary to talk about money. It can be scarier still, to change the status quo, but I truly believe that, somewhere between merely complaining and quitting in despair, lies a third way forward that is better for everyone – better for us, for our families and for our patients.

That consists of strengthening our boundaries, charging appropriately, learning the business of medicine and of learning to provide excellent care that patients willingly pay for.

When we undercharge, we set up expectations that all GPs “should” be free at point of care, “should” bulk bill, “should” be cheap to see. When we don’t charge appropriately, we make it hard for everyone else who is trying to provide excellent care and to charge well for it, to do so without contempt and cries of “greedy GPs”.

The ABC recently reported on someone with peritonitis, a life-threatening condition best managed in hospital, being unable to see their GP. The story’s sting – “What Ms Russ didn’t realise” – was that it is a condition of accreditation clinics offer urgent appointments.

This was a clear-cut case of a person who was better off seen in ED than in the GP setting. There’s not much an urgent appointment would have changed, but the media made it sound as though this was one more thing GPs are failing at.

As long as we continue to struggle with burnout to the point where we are exhausted and cannot see a way of saving ourselves, we will continue to meet with such roadblocks and impossible standards set by the public around our roles.

I am tired of it, just as I am tired of defending my colleagues – who are often excellent doctors but terrible businesspeople – almost as much as I am tired listening to weekly tirades from patients about how shit (all) GPs are.

Ultimately in order for any of us to feel valued and to enjoy our work, we need to be remunerated well, to be rested and to feel valued by the people we serve, our patients. At present, this is not happening, and while that truly feels demoralising, some of those levers are actually within our control to pull, if we can muster up the courage and the strength to do it. Only we can save ourselves.

Dr Imaan Joshi is a Sydney GP; she tweets @imaanjoshi. 

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