Tamara was grappling with a cancer diagnosis. Then came the $35,000 in medical bills

Tamara Macpherson was already grappling with a breast cancer diagnosis when she was dealt another devastating blow, in the form of a $35,000 medical bill.

The Melbourne mother of two had paid for top-tier private health insurance for years before she was diagnosed with cancer in 2024.

Out-of-pocket costs and specialist fees for some of the most common types of surgery have been soaring, according to new data collated by Private Healthcare Australia, the peak body for health funds.

The analysis, which examined fee costs between 2018-19 and 2024-25, revealed that while some privately insured patients were paying nothing in gap fees, others were being left to fork out thousands of dollars, and a growing number have been charged far above the median cost of their procedure.

For Macpherson, the first shock was the thousands of dollars in out-of-pocket expenses she was hit with during the diagnostic phase, which is largely covered by Medicare, not private health insurance.

Then came the medical bills for four operations, including a mastectomy and reconstructive surgery. For this complex nine-hour surgery alone, Medicare paid $7000 and Macpherson’s private health fund paid $2000. She was left footing the bill for another $22,000.

“I support specialists getting paid in alignment with their training and skill … They are highly, highly trained and skilled,” the 55-year-old said. “But I was left completely shocked at how big the gap was.”

Looking at other types of surgery, the data showed that for knee replacements, 90 per cent of patients were paying out-of-pocket fees to their surgeon, gap fees having doubled in the past six years from $560 to $1080. One in 10 Australians who had a knee replacement were being hit with fees of more than $5300.

For a hip replacement, the median out-of-pocket fee was $1240, and 10 per cent of patients were charged more than $5500.

Two-thirds of privately insured patients were paying out-of-pocket fees for cataract surgery, up from fewer than half six years ago. The median cost was about $500, but about 10 per cent of patients were being stung $1800 in fees.

Specialist fees were also on the rise for routine procedures including children’s tonsil removal. While a typical gap fee is $850, some specialists have been charging more than $2200. Fees for prostate surgery and biopsies were also rising sharply, with some men paying thousands of dollars in gap fees.

Private Healthcare Australia chief executive Dr Rachel David said many people did not realise fees could vary so dramatically for the same procedure, and often felt locked into paying high prices following an appointment.

“Our data shows surgeons are charging wildly different fees for the same procedures across the country,” she said. “In Australia, all surgeons are highly skilled, so there is no evidence you will get a better outcome from a more expensive surgeon.”

David said research showed about one in three people put off seeing a specialist when needed due to concerns about fees. She said GP referrals could be taken to any surgeon, and she urged people to call ahead to check fees before an appointment.

“Don’t be afraid to shop around,” David said. “It could save you thousands of dollars.”

Melbourne vascular surgeon Dr Susan Morris said some medical specialists were exploiting the system. She believed there should be a cap on the amount of out-of-pocket fees a specialist can charge.

In her own field, Morris said, there were huge discrepancies for routine treatments such as vein ablation used to treat varicose veins.

Morris knew of doctors charging “enormous” out-of-pocket fees, including thousands of dollars for operations for people who were dealing with a cancer diagnosis.

“When the patients are very vulnerable, there’s a trust,” she said. “The patient is thinking ‘this doctor is going to save my life’… I couldn’t do it, but there are some specialists who feel it’s OK to charge ridiculously high amounts for treatment.”

She estimated remuneration for vein ablation was about $1500 with most major health funds, which is what she charged her patients.

However, some clinicians, including some who are not trained vascular surgeons, charged anywhere between $8000 and $10,000 to do the same procedure inside their clinical rooms, she said.

“It really is buyer beware.”

After being hit with her medical bills, Tamara Macpherson recalled calling up her insurance fund to express her disappointment.

She was able to manage her debt because of a trauma insurance policy she took out when her children were young, which allowed her to pay back the money she and her husband drew from their credit cards and mortgage, but she said many people were not as fortunate.

She remained frustrated by outdated Medicare rebates, which left some women with breast cancer driven to financial desperation, dipping into their superannuation or waiting years in the public system for reconstructive surgery.

“That’s the part I find most heartbreaking,” she said.

“The amount Medicare allocates for a particular procedure hasn’t been updated for an extremely long period of time, and that has caused the massive gap that we’re currently seeing.”

Lisa Robins, chief executive of patient advocacy group Patients Australia, said an outdated system and crippling out-of-pocket fees were forcing people to delay or go without necessary procedures.

“It’s a misconception that higher specialist fees mean better quality care,” she said.

She said many people were being left in an “impossible limbo”: unable to afford private care, yet too unwell to wait years in the public system.

Last week it was revealed that some Victorians were waiting up to 1460 days, or four years, for a routine appointment at a vascular clinic.

Australian Medical Association president Dr Danielle McMullen said egregious overcharging was confined to a tiny minority of doctors.

“The overwhelmingly vast majority of doctors are doing the right thing,” she said.

She said data from the Australian Prudential Regulation Authority indicated about 97 per cent of in-hospital procedures were performed with either no gap or a known gap fee. The known gap fee is usually capped by insurers, McMullen said.

“The AMA does not support egregious fees,” she said. “We think transparency is a good place to start, reminding everyone both consumers and health providers, around the importance of informed financial consent.”

The Royal Australasian College of Surgeons said it recognised community concerns regarding rising out-of-pocket costs and supported reform, which improved transparency, informed financial consent and patient access to care.

“While there may be isolated examples of fees that are inconsistent with community expectations the available evidence does not support a narrative of widespread systemic overcharging across the surgical profession,” the college said in a statement.

It said out-of-pocket costs were influenced by many factors including Medicare rebates, private health insurer benefits, hospital charges and procedural complexity.

“For many years, Medicare rebates have failed to keep pace with inflation and the real costs of running a specialist surgical practice.”

About 55 per cent of the population has private health insurance and the private system delivers about two-thirds of all planned surgery nationwide.

Federal Health Minister Mark Butler said making specialists more affordable was a priority for the government.

“Non-GP specialist fees are out of control; they are a barbecue stopper,” he said. “I’ve asked my department for advice on options to start to get this huge growth in out-of-pocket costs back under control.”

He said the government’s plan to upgrade the Medical Costs Finder website to include all
specialists’ fees would soon allow people to look up doctors in their area to compare fees.