The Medical Insurance Gap Has Been Covered, Except For The Cracks
The Age
Saturday July 14, 2001
The umbrellas are everywhere - on television, on billboards and in newspaper advertisements. Sheltering underneath are people with smug smiles and private health insurance, all thrilled that at last they're protected from ``The Gap".
Until now, most people discovered ``The Gap" only when the bills started rolling in after surgery. Now, thanks to a taxpayer-funded $15 million ad campaign and a media blitz by insurance companies, it has become part of household parlance.
``The Gap" is shorthand for the money-gobbling void between bills patients get from their specialists and the costs they can recover from their health funds. It has been the scene of more than a decade of bloody skirmishes between doctors (refusing to be dictated to on price) and health funds (whose members' biggest gripe is out-of-pocket costs).
And while the government-sponsored slogan - ``We're Closing The Gap" - may indicate that there has been some meaningful resolution in the long brawl, and that patients will now reap the benefits, there are still plenty of cracks in the gaps. The doctors are hitting back, chipping away at public confidence with a none-too-veiled warning to think twice about bargain-basement medicine.
Within hours of Australian health funds posting lists of specialists willing to provide services on a no-gap - or at the least a ``known" gap - basis on their websites last month, medical groups were condemning the ``preferred provider lists".
It was ``thuggery", according to the president of the Australian Association of Surgeons, Graeme Brazenor: an attempt to railroad specialists into deals with health funds and dictate to doctors what they could charge.
AMA president Kerryn Phelps criticised the lists for apparently being compiled solely on the basis that ``they're the doctors who will provide the services for the cheapest cost".
Dr Phelps fired another volley yesterday, declaring the government's no-gap advertising campaign a ``garbled, costly failure".
Health consumer advocate Meredith Carter, director of the Health Issues Centre, is also unimpressed. Although a long-time supporter of efforts to eliminate out-of-pocket medical costs, she is not happy with the way many of the gap cover arrangements are being presented by health funds.
``It's bordering on false advertising," Ms Carter said. Her concern is that while health funds may provide long lists of specialists who have worked under gap cover arrangements in the past, members must - under nearly all arrangements - still sit down with that specialist and negotiate whether their case will be billed under a no-gap or known gap arrangement. As Medibank Private explains on its site, ``participation in GapCover is at your specialist's discretion and you'll need to check with them if they'll be using GapCover for you".
Said Ms Carter: ``You'd go to that website to see which doctors are no-gap and then you go to that doctor and they say they don't feel like giving you a no-gap service today because they don't like the color of your hair ... what on earth is that? It's a very Clayton's list and a very incremental advance and inviting you to waste quite a bit of time. It's not really the outcome that people were hoping for in the negotiations between the funds and doctors."
Ms Carter said the new system also left the onus with patients, who were often in a vulnerable position, to ask the doctor what he or she was going to charge. While more people today seem willing to have that conversation about fees, ``sometimes people don't like to ask and have that conversation".
This is not the response the Federal Government, or the health funds, need on their hard-won efforts to bridge the medical gaps. After investing about $2billion a year to shore up the private health insurance industry via its 30per cent rebate in order to stop members haemorrhaging from health funds, membership rates have climbed back from a low of 30.1per cent at end of 1998 to 45.8per cent of the population at end of September 2000. But, according to the latest figures, at the end of March the number of Australians with private hospital insurance had dropped by 70,000.
The Age revealed last week that people with private health insurance paid $220 million in out-of-pocket expenses in 1999-2000. Reducing this figure is crucial to maintaining private coverage rates, which is why the government and the funds are working so hard to convince policy holders that they've got doctors on board.
The chief of the Australian Health Insurance Association, Russell Schneider, acknowledged that there was still a long way to go in resolving the issue of out-of-pocket costs. But he described the development of more gap cover products and Internet lists of preferred providers as the beginning of the end of gap payments. The insurance industry estimates that about 25 per cent of doctors who use no-gap schemes are listed, with many others not prepared to give consent to have their details published on the Internet.
``Many of them use the schemes but they would rather discuss it with the patient themselves or provide it on request rather than have their details marketed for them by a third party," Mr Schneider said.
He dismissed fears that the schemes would lead to the funds telling doctors how to treat their patients, arguing that the doctors' obligations were protected under law.
But neurosurgeon Graeme Brazenor said the government and the private insurers ``are trying to club doctors over the head with this campaign (on gap payments) and the last people who should be telling doctors how to charge their fees are these commercial entities. That would be like putting the fox in charge of the chickens."
Dr Brazenor said what the private funds failed to tell consumers was that if they were forced to undergo a complex procedure - which only a handful of surgeons not involved in no-gap programs are trained to do - their policies would not cover them.
``In these circumstances the surgeons are highly trained and have attained a level where no one would argue they have the right to set their fees. That is why we have been arguing that these schemes are unfair to patients as well as doctors."
The AMA also remains fiercely opposed to the concept of deals between health funds and doctors over costs, which it has maintained for years will inevitably mean a slide into US-style managed care arrangements in which insurers dictate to doctors what treatments patients can receive.
Once doctors were locked into health fund lists, said Dr Phelps, they became dependent on them for referrals and vulnerable to restrictions on the kind of drugs and treatments they gave their patients.
Health economist Richard Scotton, one of the original architects of Medicare, said the $2 billion annual private health insurance rebate was an ``ideologically driven disaster" because it does not provide value for money. Axeing the rebate and putting just half of it into public hospitals would ensure far more people were treated for things that were important, he argued.
But he thought that providing consumers with lists of doctors willing to consider no-gap deals was useful, and maintained that the AMA's objections were nonsense.
``They are worried for the same reason they initially opposed Medicare - because they didn't want someone with enough market power to start dictating their level of fees," Professor Scotton said. ``It's all to do with the money."
He conceded there was a grain of truth in the AMA ``threat" that deals between doctors and hospitals might lead to managed care, but he was not opposed to some level of that. ``Any sensible system would gravitate to some form of managed care where the payer takes some interest in the outcomes and what they are getting for their money," he said.
Ms Carter also believed the AMA's fears that health funds would be able to dictate clinical practice once they signed up sufficient doctors to their lists was overstated. ``For any doctor in short supply or prominent in their field, I doubt funds will be able to dictate terms to them, and doctors are pretty feisty and have a prominent association that would be pretty vocal about that sort of practice," she said.
The theory behind the preferred provider lists is that patients can ask their GPs to refer them to specialists open to the idea of a no-gap arrangement. If enough patients do this, specialists not on the lists will suffer dwindling referrals. So far Medibank Private has more than 4500 specialists listed; HBA 3300 and Australian Health Service Alliance, a service company covering 28 small to medium size private health insurance funds including Australian Unity, about 5000.
HBA was the first fund to introduce gap cover. It did so in Victoria in 1997. While it doesn't have the most doctors listed, its website is one of the most user-friendly because it specifies which doctors provide no-gap services and which provide ``known-gap" services, and details the maximum amount the member will pay (up to $400 or up to $800). Most health funds will also provide the information over the phone.
David King is chief executive of the Australian Health Service Alliance. As with all the funds, the list on his company's site is prefaced by a disclaimer warning patients that they must ask the doctor whether he or she is willing to manage their case on a no-gap or known-gap basis.
He likened the preferred-provider schemes to getting a quote from a house builder, who then had to get quotes from other tradespeople in order to give an estimate of price.
He was confident that within a few years most specialists would be listed with a fund, but argued it was a huge leap from preferred-provider lists to managed care.
Mr King saw the move to no-gaps deals by doctors as vital to the survival of the private system because ``the single largest issue in the minds of people who choose to take private health insurance is gap payments".
This is confirmed by the private health insurance ombudsman Norman Branson, who has received thousands of complaints about gap payments, many of which were ``a hell of a lot".
He said the legislation passed last year allowing funds to offer to pay doctors above the Medicare Benefits Schedule if they agreed to charge no-gap or a known gap had been crucial in bringing more doctors on board.
Doctors can agree to be listed, but retain the right to charge case by case. It also means that while they forfeit some of the extra money they may once have demanded from the patient, the fund may pay them an agreed figure above the MBS fee to entice them into its scheme.
Mr Branson said doctors had been recalcitrant in refusing to accept any responsibility for closing the gap, which medical lobby groups argue is not the creation of greedy doctors, but of what he described as the ``miserly" rates of the Medicare Benefits Schedule.
``They're still fighting about whether or not it's their responsibility to close the gap and of course it is," Mr Branson said.
Closing the Gap.
WHY IT HURTS
Average out-of-pocket costs for some common medical procedures. In each instance below, the cost to the patient would be zero if performed under a gap cover arrangement.
* Fibre-optic colonoscopy: $155.90
* Cataract surgery: $518.45
* Management of labor and delivery: $642.55
* Total knee replacement: $903.93
* Groin and abdominal hernia: $243.45
* Coronary arteriography (injection of dye into arteries to check pump action of heart) $207.10
All figures, which are averages only, include anaesthetic and pre-operative examinations.
SOURCE: Medibank Private GapCover
CASE STUDY:The high cost of having a baby
The decision to have a baby has historically been a powerful incentive for many people to take out private health cover. So many new parents are often surprised that even with top-level cover, they face steep out-of-pocket expenses. According to the health funds, the average is about $650. But the profession acknowledges that the figure often ranges from $1000 to $2000.
So can parents-to-be expect obstetric costs to be wiped out by no-gaps arrangements?
NO says John Campbell, President of the Royal Australian and New Zealand College of Obstetricians and Gynaecologists. This is because the Medicare schedule fee for managing a pregnancy and delivery - $415 if it's straightforward, $975.80 in complex cases - is well below the real costs of private obstetrics practice, he says. Professional indemnity costs were almost $40,000 this year. Although the funds advertise long lists of obstetricians who have participated in no-gap deals, and under some deals have agreed to rebate doctors well above the schedule fee, Dr Campbell says obstetricians still face high losses. "I don't know why anyone would be listed".
YES says obstetrician Dr Bernadette White, pictured (above) with patient Julie Seeley. She usually offers patients a known out-of-pocket fee of up to $400 (in straightforward cases). In some cases, she also offers no-gap arrangements, and participates in a number of no-gap schemes. She says that the system has been working well for her practice. "The AMA is very wary because they think it is the start of the US-style managed care system, but I think it is a big step from gap cover to managed care. I agree we should not go down that track but we should deal with that if it comes and it is definitely not here at the moment."
Two new mothers have their say on the system
JULIE Seeley, of Viewbank, is about six weeks away from the arrival of her second baby. Under a gap arrangement with her obstetrician she had no out-of-pocket fees when her first baby was born 14 months ago, and expects it will be the same this time around. "I think it's the way it should be, it's not quite a thank-you for being involved with the insurance fund for years, but it is something positive for people and an incentive for them to continue with their private health insurance," she said.
MAZAL Langley, above, of Glen Iris, gave birth to her first child, daughter Jessica, nine weeks ago. She had top private cover, costing her about $2500 a year. "I would have thought that would be enough to cover it," Mrs Langley said. When she did get a bill for a gap of $650 she wasn't altogether surprised, having paid $750 out-of-pocket after having her appendix removed a few years ago. "I'd have liked to have had access to a list of doctors who would talk about lower costs," she said. "I think a lot of people would even pay a little more on their insurance rather than have the gap". -- Brett Foley.
© 2001 The Age
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