The True Cost of So-Called Fixed Cost Obstetric Services.

In recent years we have seen the emergence of a number of programs offering patients “low” cost, or “no out of pocket” cost, private maternity care. Established by or in partnership with, private health insurers, these programs initially look like a wonderful solution to prospective parents who may otherwise be unable to afford the out of pocket expenses related to having a family.

BUT, these models, raise the possibility that the insurer may eventually dictate to both medical specialists and patients, the care that can be offered and who can provide it.

Is it the start of Managed Care in Australia?

It’s no news to NASOG members that private obstetric practice has been under pressure for some time. Rising private health insurance premiums have seen many patients opt out of cover altogether. Coupled with the mandatory waiting periods before women can access private obstetric cover (despite over 50% of all spontaneous pregnancies in Australia being unplanned), there are less and less expectant mothers going outside the “free” public hospital system. This puts enormous pressure on a public system that was not designed to manage this volume of patients.

In addition, a number of studies conducted in Australia, report the highest levels of patient satisfaction are achieved when women can access continuous care with the obstetrician of their choice such as is available in the private obstetric setting.

The only factor preventing women accessing this model of care the underfunding of women’s health due to long term inadequate rebates from both Medicare and private health insurance funds. This underinvestment making private obstetric care unaffordable for many women and families.

Australia needs BOTH public and private obstetric sectors to survive and thrive. It should be a balanced partnership that meets the burden of care provision for our current population and into the future.

We need to ensure that sufficient numbers of junior doctors see the potential for a satisfying career in obstetrics and are incentivised to undergo the long and vigorous training program needed to staff the obstetric units of the future.

The possible curtailing of private practice options and limiting career paths available to only the public system may see fewer medical graduates choosing to train in obstetrics. This will have repercussions with ultimately less capacity available across the whole healthcare system- both public and private.

At least in the short term, the appeal of the fixed price model is clear. Private obstetricians are assured of patients and women receive certainty around their care.

But ultimately, there is a third party at play. Insurers will potentially be able to influence decisions that can be made around the medical care that is delivered and removing control from the doctors and placing it squarely in the hands of large often multinational corporations running the health insurance funds.

Contracts will define where a specialist’s role starts and ends in relation to their remuneration. Policy clauses define the limits of care a patient will receive for the premium they have paid. Only providers contracted to the agreement are able to provide services, even if they are not necessarily the best choice when special interests, experience and subspecialty training are taken into account.

In this scenario, what happens when real life circumstances don’t fit the fund contracted definitions?

Fixed price maternity programs represent an existential threat to the future of private obstetrics and the reduction of choice for women in terms of the care they will receive during pregnancy and childbirth.

Important considerations including indexation of rebates to health CPI and addition of necessary new services to be covered, must be taken into account in any health service funding agreement. By having a “fixed” rebate available, and dictating that no further costs can be included, the sustainability of practice in an area where new technology, genetic testing and therapeutic options are rapidly increasing, is severely compromised.

One view could be that these maternity programs are a training exercise for how funds will take control and run a managed care agenda across the whole of the private sector. If they can make these models work to their advantage in obstetrics, it won’t be very long until insurers roll the model out across the entirety of private medicine, resulting in a US styled managed care environment.

The proposed models don’t just target obstetricians. In some proposals, the provision of services from anaesthetists, pathology providers, paediatricians and ultrasound providers (not always at tertiary subspecialist level) are also included. Is it possible that in the future, containment of billings spreads further than the maternity area into those specialty areas more broadly?

The recent rapid response to the major public health challenge of COVID-19 and acceptance of the initiatives put in place for both public and private health systems have demonstrated that our healthcare regulators, administrators, practitioners and patients can adapt and implement change quickly and effectively.

NASOG applauds our state and federal governments for this agility and speed in acting during the crisis. It is now time to apply that same degree of action and proven adaptability to review how the public and private sectors could work together with health insurers to put in place a system that encourages independence, innovation and the highest standards of patient care. A system that will benefit the health of Australian women and families into the future.

NASOG continues to approach Government on the need to address the challenges in obstetric private practice. We are working with the AMA and other specialist groups to address how best to manage the issue of fixed price care while maintaining affordability for patients and independence for doctors.

We are united in our commitment to develop genuine alternative solutions to the challenges facing private medical practice.

Some might continue to argue that a fixed price structure gives assurance in uncertain times. Specialists are assured of income and more patients can access private care, taking some immediate pressure off the public system.

But in the longer term, what will the real cost be to the practice of medicine in Australia?

A/Prof Gino Pecoraro

Are you a member of NASOG? Join today and add your voice to the advocacy for your profession.

If you are a pathologist, imaging provider, anaesthetist or paediatrician who will also be affected by these proposed changes, consider becoming a Supporter of NASOG so your voice in this situation can continue to be heard.

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