The Department of Health, Disability and Ageing has released a consultation paper on excessive specialist fees. The paper can be boiled down to a simple question: when a specialist charges far more than their peers, or far more than the Medicare schedule fee, could government do anything about it? The answer is yes.
Fri 2 Oct 2026 01.00 AEST
A general view of Health department head office in Canberra. Photo: AAP Image/Mick Tsikas
The Department of Health, Disability and Ageing has released a consultation paper on excessive specialist fees. The paper can be boiled down to a simple question: when a specialist charges far more than their peers, or far more than the Medicare schedule fee, could government do anything about it?
The answer is yes.
The consultation paper recognises what patients already know. As Australia Institute research shows, Australians are paying more to see specialists, and some are delaying or missing care as a result. In 2025, Australians spent $4.17 billion out of pocket on out-of-hospital specialist services, up 75.8% since 2019. The average out-of-pocket cost for an initial specialist consultation rose from $94.72 in 2016 to $158.75 in 2025 – a 67% increase, compared with 32% inflation.
The paper also acknowledges that healthcare is a strange market.
Accessing specialist care is very different to other goods and services like, for example, ordering a rideshare. Patients – and their referring GPs – have limited information on which to base decisions and, in many cases, few realistic alternatives. Supply is constrained. Public alternatives may involve long waits, and there is little evidence that paying more necessarily buys better clinical outcomes. This is very different to being able to use an app to see all the available options, complete with relevant information about price, distance and customer rating.
The Department concludes that these features, combined with the fact that specialist care is taxpayer-subsidised, make a case for greater regulation.
Their proposals to regulate the specialist care market include sending warning letters to specialists who consistently charge in excess of an established threshold (three times the Medicare schedule fee has been mentioned) but also establishing caps on the fees that specialists can charge. Using financial incentives for lower out-of-pocket costs is also proposed (that just means paying specialists to charge less).
These are good ideas. But they could go further. For example, our submission to the current parliamentary inquiry into specialist access argues that patients and their GPs should be given information on not just fees, but outcomes, alternative pathways and associated wait times. We also propose investing in public outpatient services to provide a genuine universal alternative, and we suggest updating care models to reduce the number of unnecessary specialist referrals than currently take place.
A specialist need not charge five times the Medicare schedule fee for care to be unaffordable. A $150 or $200 gap may not look excessive when compared with the highest-charging providers, but it can still stop someone on a low income from seeking care. This is why almost a million Aussies can’t afford to see a specialist each year.
This chart shows fee variation across jurisdictions. It suggests that the problem isn’t just a few outliers, but that specialists are charging whatever the market will bear – and that fees appear to be linked to where a patient lives, not the quality or the outcomes of care.
Quality research, analysis, explainers and factchecks from experts you can trust.
And here we see variation in fees for seven common procedures (note that the highest and lowest 10% are excluded to avoid extreme individual outliers). The out-of-pocket cost for a hip replacement varies 17-fold across the country. Again, it’s unlikely that some practices are 17 times more expensive to run, or that some surgeons are 17 times better at performing a hip replacement than others.
Another issue is that private care can’t truly be separated from the public system. If there is a well-resourced public outpatient clinic offering timely care, patients have an alternative. If there’s a two-year wait – which there often is – the private price becomes much harder to refuse.
That’s why our submission proposes a broader National Specialist Fee and Affordability Framework.
Rather than focusing only on the worst outliers, independent benchmarks could be established for reasonable fees for common consultations, procedures and episodes of care. Those benchmarks would take account of practice costs, clinical complexity, professional remuneration, geography and other legitimate differences in the work specialists perform. Specialists could still charge outside voluntary affordable-billing arrangements, but Medicare funding could be harnessed to reward fair, transparent and affordable care.
Transparency could also go further than price.
The Department of Health, Disability and Ageing is strengthening the Medical Costs Finder, which is welcome. But patients choosing a specialist need more than a price list. They’d also benefit from being able to see waiting times, public alternatives, and information about quality and outcomes such as complications, readmissions, revisions and patient-reported outcome measures (PROMs).
None of these reforms mean singling out specialists for blame. Specialists are acting rationally; within rules successive governments have created.
The Department’s consultation paper is encouraging because it acknowledges that these rules matter. But will they be changed?
