More than ۲.۲ million Australians paid an “extreme” fee to see a specialist last year, with psychiatrists and paediatricians among the most likely to routinely unreasonably charge their patients, according to new research.
Specialists cannot justify exorbitant fees by blaming inadequate government rebates, or the costs of running a business, a report from policy thinktank the Grattan Institute found, as these factors explain only a fraction of the fee increases Australians have faced.
While Medicare rebates fell in real terms by $۹ per between ۲۰۱۲ and ۲۰۲۵, specialists increased patient fees by an average of $۳۷ over the same period, recouping the lost subsidy more than four times over. The average specialist fee rose ۴% on top of inflation in ۲۰۲۵.
The report, Out of control – how to rein in runaway specialist fees, published on Sunday, defines an extreme fee as being at least triple the official Medicare schedule fee, which is the benchmark price set by the government.
Extreme fees are becoming more common, the report found, with ۲۵۰,۰۰۰ extra patients paying them each year, affecting ۲.۲ million patients in ۲۰۲۵.
“Some specialists routinely charge patients much more than their peers,” the report found.
“The most expensive ۵% of psychiatrists charge a median out-of-pocket fee of $۶۶۹ for an initial consultation. For high-cost paediatricians, it is $۳۶۲. For high-cost cardiologists, it is $۲۶۵.۱۱.”
These specialists charge ۱۰۴%, ۲۱۲% and ۲۰۳% more than their peers, respectively.
Among several recommendations, the report calls on the government to force any specialist whose annual fees average more than three times the Medicare schedule fee to repay the government for all rebates claimed that year. Patients would keep their rebate.
This would affect roughly ۶% of specialists nationwide (about ۲,۰۰۰ doctors), but more than ۶۰% of private dermatologists and a quarter of obstetrician-gynaecologists.
The median fee for an initial consultation has also risen faster than inflation, with an initial dermatology consultation increasing by $۲۸ to $۲۱۷.۸ between ۲۰۲۳ and ۲۰۲۵, the report found. For psychiatry, it rose by $۹۰, reaching $۳۵۱.
In ۲۰۲۵, fewer than a quarter of initial consultations were bulk-billed, and fewer than ۱۰% of initial consultations in urology, dermatology, otolaryngology (ear, nose and throat), and psychiatry were bulk-billed.
The lead author of the report, health economist Peter Breadon, said increased price transparency was important but would not be enough to fix what he described as a broken market failing to self-regulate.
In September, legislation passed allowing the government to publish the fees of all specialists on the Medical Costs Finder website, which will commence in ۲۰۲۷. The website has been voluntary for specialists to sign up to, with only about ۱۰۰ out of ۶,۳۰۰ eligible specialists publicly disclosing their fees since it was established in ۲۰۱۹.
“Some doctors, and some of their advocacy groups, have said self-regulation is the way forward, by appealing to people’s interest in making sure their patients can get the care they need,” Breadon said.
“That kind of approach isn’t working. This is a long-term trend and the real reason is it’s a market where none of the forces that would normally constrain fee growth are working. There’s very little competition because there are not enough specialists to go around, and there is a long public wait.
“It’s also very hard for patients to understand whether a fee is too high, because there is little information about how to evaluate the quality of care. It means regulation is the sensible step.”
The report calls on federal and state governments to invest $۵۰۰m each year to expand public hospital outpatient clinics; to roll out advice lines for GPs to quickly seek specialist advice so their patients can avoid a referral, wait time and fees; and to impose binding training quotas on medical colleges.
Without reform, Breadon said: “This is not a system that’s going to self-correct.
“It’s been left to run on autopilot for decades.”
The CEO of the Consumers Health Forum, Dr Elizabeth Deveny, said Australians were increasingly “rationing their own care or skipping follow ups simply because the gap costs more than a week of groceries”.
“When the only alternative is a two year public waitlist, people pay because they have run out of options,” she said.
In response to the recommendations, the federal health minister, Mark Butler, told Guardian Australia “all options are on the table to rein in climbing specialist fees”.
The government has established a specialist affordability working group to advise on reforms, of which Breadon is a member.
The Royal College of Physicians president-elect, Dr Julian Kelly, said the peak body would support the government in introducing any regulation to address extreme charging.
“The RACP does not defend excessive fees that create barriers to care or place unreasonable financial pressure on patients,” Kelly said.
“Extreme fee charing is unacceptable. We acknowledge the Grattan Institute’s contribution to this important discussion and agree that improving affordability and access to specialist care must remain a national priority.”
