Health Minister Mark Butler has indicated the government is considering capping specialists’ fees to reduce the gap between what Medicare covers and what specialists charge patients.
The Australian Medical Association strongly opposes the idea and is threatening legal action. Mark Butler says the government is willing to “test the boundaries” of constitutional limits.
Monash University experts have provided a critique in The Conversation (Constitutional Law expert Luke Beck, Health Economics expert Anthony Scott) and can explain whether the government should cap specialist fees, how it could be done and what the Constitution has to do with doctors’ fees.
Available to comment:
Professor Luke Beck, Professor of Constitutional Law, Faculty of Law
Contact: +61 3 9903 4840 or [email protected]
The following can be attributed to Professor Beck:
“Specialists’ incomes and fees are already partly regulated by federal law. The Fair Work Commission’s Medical Practitioners Award governs the wages and conditions of specialists who are employees rather than self-employed.
“Health Minister Mark Butler says a parliamentary inquiry will explore various options for capping specialists’ fees. There will be administrative and practical pros and cons for various options.
“Options the inquiry might explore include: simply capping fees, making eligibility for Medicare subsidies conditional on not exceeding a maximum fee, imposing an income tax surcharge on specialists who choose to not comply with caps, getting the states to legislate the caps, which would avoid the constitutional question altogether.
“Regulating private sector prices is different from civil conscription in the sense of compulsion to perform a professional service. So unless the government gives in to political pressure, specialists’ fees look set to be capped one way or another.”
Professor Anthony Scott, Director of the Centre for Health Economics, Monash Business School
Contact: +61 3 9903 4840 or [email protected]
The following can be attributed to Professor Scott:
“Doctors are free to set their own fees. The average out-of-pocket cost for a non-bulk billed specialist consultation increased from $46 in 2009–10 to $126 in 2024-25, or 11.9 per cent per year.
“This sector has been largely untouched by any serious policy reform since Medicare began in 1984. The only changes have been the introduction of the Medical Cost Finder website in 2019, and the freeze on the indexation of Medicare rebates between 2014 and 2018.
“This year the government introduced legislation to enable the publication of fees for individual non-GP specialists. The Medical Cost Finder website will show what individual specialists charge, rather than the average charges across each Primary Health Network. This will better facilitate choice of doctor.
“A Senate committee has also been set up to investigate access to and affordability of medical specialists which will report in late 2026.
“The committee is likely to hear that high fees, and uncertainty about what fee will be charged, means people are less likely to attend appointments. This can mean a choice between poor health and potential financial hardship. There are many regular reports and surveys showing that around 10 per cent of the population, almost 1 million people, are avoiding seeing specialists because of the cost.
“Economists argue that more competition in the market can help reduce market power and reduce fees. However, our research has shown more competition, measured by more specialists of the same specialty in an area, has no impact on fees.
“If increasing competition can’t bring fees down, the only options are direct fee regulation, additional government spending, or both. This could involve: legally enforceable price caps, paying Medicare rebates only if fees are below a certain cap, increasing Medicare rebates, and standardising gap cover arrangements across health insurers.”
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