Australians Pay Up to Three Times Medicare Rates for Specialist Care
A new Grattan Institute report identifies psychiatrists and paediatricians as key drivers of extreme pricing, with median first-visit costs reaching $669.
By Anthony Shevchenko ·
The median out-of-pocket charge for a first appointment with a high-cost psychiatrist reached $669 in 2025, according to a Grattan Institute report released on Sunday. The figure is more than three times the Medicare schedule fee, a benchmark the institute uses to define extreme charges. More than 2.2 million Australians paid these elevated rates for specialist services last year. Another 250,000 patients face similar bills annually.
The report identifies psychiatrists and paediatricians as the specialists most likely to routinely charge unreasonably high amounts. For high-cost paediatricians, the median first-visit fee was $362, while cardiologists charged a median of $265.11. These fees exceeded their peers' charges by 104%, 212%, and 203%, respectively. Median dermatology fees also rose by $28 to $217.80 between 2023 and 2025, outpacing inflation.
Researchers noted that declining government rebates and rising business expenses explain only a small portion of the fee growth. Between 2012 and 2025, Medicare rebates fell by $9 in real terms, while average patient fees increased by $37. In 2025 alone, average specialist fees rose 4% above inflation. This trend persists despite bulk-billing covering fewer than one-quarter of initial specialist consultations.
The institute proposes requiring specialists whose annual fees average more than three times the Medicare schedule fee to reimburse the government for every rebate claimed that year. Patients would keep their rebates under this plan. Approximately 2,000 doctors, or 6% of national specialists, would be affected. This group includes more than 60% of private dermatologists and one-quarter of obstetrician-gynaecologists.
Dr Elizabeth Deveny, chief executive of the Consumers Health Forum, stated that patients are increasingly limiting care or missing follow-ups due to costs. She explained that a two-year public waiting list often leaves patients feeling they have no alternative but to pay. Health economist Peter Breadon, the report's lead author, argued that specialist shortages and long public waits weaken the market pressures that normally restrain prices.
Legislation passed in September will allow the government to publish all specialists' fees on the Medical Costs Finder website starting in 2027. Participation has been voluntary since the website launched in 2019, with only about 100 of 6,300 eligible specialists providing data. The institute also recommends $500 million in annual investment to expand public hospital outpatient clinics and the creation of advice lines for general practitioners to consult specialists quickly.
Federal health minister Mark Butler said all options remain under consideration to curb rising charges. The government has formed a specialist affordability working group, which includes Breadon. Dr Julian Kelly, president-elect of the Royal College of Physicians, said the organization supports government regulation addressing extreme fees. He described excessive charges that obstruct access as indefensible.
