Understanding Surgery Fees

Overview of Private Operation Fees

This section aims to provide you with some basic financial information about the health system. There is universal health cover in Australia from Medicare. This means that all Australian residents are covered by the public health system.

The private health system offers the advantage of choosing your surgeon (Dr Balakumar) and access to a better choice of elective surgery. The disadvantage is the financial costs associated with the surgery. Most doctors’ costs are paid for by Medicare and health insurance companies supplement a little to this. In fact most of your health insurance goes into paying for your hospital stay and not the doctor’s costs. For this reason there is a GAP. A GAP is a charge that the patient will be out of pocket for after the service has been paid for by Medicare and the health insurance company.

There are several costs when seeing a specialist surgeon:

1. Initial Consult fee - $180 to $280 for Dr. Balakumar
2. Subsequent Consult - $95 to $200 for Dr. Balakumar
3. Cost of Surgery – There is a GAP for most of the providers.

Cost of Surgery

There are several costs to surgery. Most patients believe the bills they are paying are for the surgeons. In reality there are multiple providers who are sending out bills to the patients and the health insurance company:

1. Surgeon’s Fees (Dr. Balakumar) – There is no gap, however there is an administrative fee.
2. Anesthetist’s Fees (the specialist who provides the anesthetic to the patient) – Most anesthetist charge Gaps vary from $250 to $1000. Your anesthetist will contact you prior to surgery and obtain informed financial consent.
3. Assistants Fee (this is the doctor who assists the surgeon) – Most assistants will charge gaps between $100 and $350.
4. Hospital bed and Theatre costs – If you have private health insurance this is confined to your excess, but certain orthopaedic procedures are excluded from your policy and therefore need to be checked prior to booking in surgery.
5. Pathology and Radiology – These are blood tests and imaging taken during your inpatient stay that may also incur added costs.
6. Implants and Prosthesis - Most of these are covered by your insurance company, but once again it is important to check with them prior to the surgery

Most orthopaedic consultations and procedures are covered by Medicare item numbers.

Surgeon's Fees

All orthopaedic surgeries are covered by Medicare item numbers. These numbers have an associated rebate. The government determines these rebates and the private health insurance companies supplement these rebates by up to 25%.

Unfortunately, these rebates have not changed much since 1983 and have not kept up with inflation, let alone the costs of running a quality practice and the increasing cost of indemnity insurance. The difference between the costs and the rebates has given rise to the GAP. Most surgeons will charge AMA (Australian Medical Association) rates for the services. This is almost three times the Medicare rebate and reflects the true discrepancy.

Most surgeons would perform a procedure and then invoice the patient directly for the procedure. This will include a GAP ($200 to $5000). The patient would then pay for the bill. He or she would then go to Medicare and to the insurer to receive a partial refund of the total bill.

To minimize the costs to the patient, Dr Balakumar and his team have a different approach. On the day of surgery an administrative fee is charged. This is the only out of pocket expense with Dr Balakumar. This varies from $200 to $550. After the procedure Dr Balakumar’s billing department will then send the bill to the health insurance company. There are exceptional circumstances such as overseas patients who will have to pay directly.

Uninsured Patients

Uninsured patients will require a quote from the hospital and the prosthesis companies. Once again the surgeon’s fees are mainly rebated by Medicare and therefore the patient will not have to pay much out of pocket for their surgeon.