Some information about anaesthesia fees

There will be a gap between the fee for your anaesthetic and the total rebate you receive from Medicare and your private health insurer. It would be more accurate to call it a private health insurance shortfall which is the direct result of deliberate federal government policy.

The Medicare rebate, on which your total health insurance rebate is based, has not been indexed adequately by the federal government and has been steadily eaten away by inflation over many years.

Successive federal governments have been steadily reducing their support for private medical care and blaming the medical profession when gaps are the inevitable result.

Since 1985 Average Weekly Earnings (AWE) have gone up by a factor of 3.8, the CPI has gone up by a factor of 3.1, but your Medicare rebate has only been increased by a factor of 1.7.

This erosion of Medicare rebates has continued. From 2013 to 2019 your Medicare rebate increased by 0% while AWE went up by 14.7% and the CPI went up by 5.7%. This year the government belatedly increased the Medicare rebate by 1.5%.

Fees Explained

The Medicare rebate is the core of your total health insurance rebate. Each private health insurer offers a range of schemes for you to choose from but all take Medicare as the baseline to set how much they will pay out.

Of every $100 that you pay in private health insurance premiums only $10 goes to doctors, of this only $2.40 is paid to anaesthetists. Administration, ancillary services and hospital costs account for the rest.

And in the case of the publicly listed private health insurers (Bupa, NIB, MBP), part of your health insurance premium goes toward paying a dividend to shareholders.

The fee for your anaesthetic will be in excess of the Medicare rebate but less than the fee that the Australian Medical Association recommend as being fair and reasonable. The AMA fee has increased over the past 35 years by a factor of 4.0 or slightly more than the rate of increase in Average Weekly Earnings. Each anaesthetist in this practice sets their own individual fees but the average is 54.5% of the AMA's suggested value.

More detailed information about how anaesthetic fees are calculated can be found on the Australian Society of Anaesthetists website here.