Australian Specialists Charging Runaway Fees for Care, Grattan Institute Report Finds

More than 2.2 million Australians paid extreme fees to visit medical specialists in 2025, with psychiatrists and paediatricians among the most frequent offenders, according to a report published by the Grattan Institute thinktank on Sunday.

The report, titled "Out of control – how to rein in runaway specialist fees," defined an extreme fee as one that is at least triple the benchmark Medicare schedule fee set by the federal government. Researchers found that about 250,000 additional Australians face such excessive costs each year, as market competition fails to rein in pricing.

While government Medicare rebates dropped in real terms by $9 between 2012 and 2025, specialists raised their fees by an average of $37 over the same timeframe. In 2025 alone, average specialist charges climbed 4% above inflation. For an initial consultation, the top 5% of high-charging psychiatrists billed a median out-of-pocket gap of $669—104% higher than their peers. Meanwhile, top-tier paediatricians charged a median gap of $362, or 212% more than peer averages.

Bulk-billing has also dropped sharply. Fewer than 25% of all initial specialist consultations were bulk-billed in 2025, falling below 10% in specialties such as dermatology, urology, otolaryngology, and psychiatry.

Calls for Stricter Regulation

The report's lead author, health economist Peter Breadon, argued that voluntary measures and self-regulation have proven ineffective due to severe specialist shortages and extensive public waiting lists. Although legislation passed in September will require specialist fees to appear on the Medical Costs Finder website starting in 2027, Breadon said price transparency alone cannot resolve systemic failures.

To address the issue, the Grattan Institute recommended that doctors whose average fees exceed three times the Medicare schedule fee be required to repay all claimed rebates back to the government, while allowing patients to retain their subsidy. This rule would affect roughly 6% of Australian specialists—around 2,000 doctors—including over 60% of private dermatologists and a quarter of obstetrician-gynaecologists.

The thinktank also proposed investing $500 million annually into public hospital outpatient clinics, establishing GP advice hotlines to reduce unnecessary referrals, and setting binding training quotas on medical colleges.

Federal Health Minister Mark Butler stated that all options remain on the table to control rising fees, noting that an affordability working group has been formed. Royal Australasian College of Physicians president-elect Dr Julian Kelly also condemned excessive billing, stating the college does not defend fees that create barriers for patients.

Source: The Guardian World.