Specialists Face Scrutiny as Psychiatrists and Paediatricians Charge Extreme Fees

A comprehensive report published by the Grattan Institute reveals that over 2.2 million Australians paid extreme fees to see medical specialists last year. The policy thinktank found that psychiatrists and paediatricians are among the specialists most likely to routinely charge patients unreasonable amounts that far exceed business running costs or the impact of reduced government subsidies. The findings highlight a healthcare market struggling to self-regulate amid a lack of adequate competition and low price transparency.

The study, titled Out of control – how to rein in runaway specialist fees, defines an extreme fee as being at least triple the official Medicare schedule fee. While Medicare rebates dropped in real terms by $9 between 2012 and 2025, specialists increased patient fees by an average of $37 over the same period. The report shows that the most expensive 5% of psychiatrists charge a median out-of-pocket fee of $669 for an initial consultation, while high-cost paediatricians charge $362 and cardiologists charge $265.11.

Runaway specialist fees have left millions of patients paying extreme amounts while struggling to access essential care.

To address the issue, the report recommends that the government force any specialist whose annual fees average more than three times the Medicare schedule fee to repay the government for all rebates claimed that year, while patients keep their rebate. This regulation would impact roughly 6% of specialists nationwide, including over 60% of private dermatologists and a quarter of obstetrician-gynaecologists. Lead author Peter Breadon noted that market forces are failing to constrain fee growth due to a severe shortage of specialists and long public waiting lists.

Consumers Health Forum CEO Dr Elizabeth Deveny stated that patients are increasingly rationing their care or skipping follow-ups because gap costs exceed a week of groceries. Federal Health Minister Mark Butler responded by noting that all options are on the table to rein in climbing specialist fees, and the government has established a specialist affordability working group to advise on reforms.

Why it matters

The findings underscore the growing financial pressure on patients seeking necessary specialist care when public waiting lists span years. The proposed policy interventions could reshape private medical billing practices and shift regulatory oversight to protect vulnerable patients from exorbitant out-of-pocket medical costs.