Private health insurance,methodology and interpretation of ‘Variation in outpatient consultation fees of psychiatrists in Australia by state and territory'

Dear Editor,

We highlight methodological and interpretational issues regarding a recent paper which investigates private outpatient psychiatric consultation fees and marshals arguments for allowing private health insurers to subsidise outpatient psychiatric consultations. ¹ We discuss the central interpretational issues here and outline methodological concerns in Table 1.

Table 1.

Methodological issues in the Coulston and Leahy paper. ^a

• The study does not report the commonly used MBS Item Number 304 for 30–45 min consultation of a private psychiatrist, i.e., this is an incomplete data collection that does not reflect real-world clinical practice. b The quantification of out-of-pocket costs is inaccurate if commonly used consultations are not counted in the data being analysed. This is likely to result in significant underestimation of the amount of private practice consultations by private psychiatrists and accordingly have substantial effects on the accurate estimation of out-of-pocket costs.

• It is not acknowledged that 'private-billing' by salaried public sector specialists, in the form of bulk-billing, occurs as a form of state-to-federal cost-shifting. c Accordingly, this can overestimate the extent of bulk-billing in outpatient private practice, as, in many circumstances, salaried public sector specialists in private practice are prohibited from charging additional private fees that represent out-of-pocket costs.

• The AIHW data covers the period from 2014 to 2019, and therefore, psychiatrist FTE for a region may be averaged over that period. d However, not all psychiatrists may be in clinical practice, or billing. This can lead to an overestimate of the actual number of those billing, and accordingly, erroneous conclusions regarding private consultation accessibility within a given state.

• The national median wage should be estimated on a state-by-state basis to be a useful comparator for patient costs, since wages differ across states/territories. Median wages by state and calculated estimated cost percentages should be tabulated in the results to enable informed comparison of wages and out-of-pocket costs by state. The omission of state comparisons leads to the less suitable use of the national median wage as comparator, when state median salaries vary, and a relative under- or overestimate of the relative costs.

• The paper does not reference the relevant Australian federal government subsidies known as the Original Medicare Safety Net and the Extended Medicare Safety Net which partially offset high out-of-pocket costs for private patients. e This effectively overestimates the costs to patients that frequently need to access private psychiatric care with out-of-pocket costs. An accurate consideration of out-of-pocket costs should include subsidies that support private psychiatric consultation, as the Safety Nets are reimbursements that offset the costs to patients and thus are relevant in economic evaluations of costs.

^aCoulston C and Leahey J. Variation in outpatient consultation fees of psychiatrists in Australia by state and territory. Australas Psychiatry 2023: 10398562231190783. 2023/07/29. DOI: 10.1177/10398562231190783.

^bLooi JCL, Allison S, Bastiampillai T, et al. Telepsychiatry and face-to-face psychiatric consultations during the first year of the COVID-19 pandemic in Australia: patients being heard and seen. Australasian Psychiatry 2022; 30: 206–211. DOI: 10.1177/10398562211046301.

^cLeeuwenburg T. Double-dipping Medicare funding pool, https://insightplus.mja.com.au/2018/19/double-dipping-medicare-funding-pool/ (2018, accessed 2 August 2023).

^dAIHW. Mental health workforce, https://www.aihw.gov.au/getmedia/6975aa54-246d-426e-9e33-fec8ec7ce105/Mental-health-workforce-2019.pdf.aspx (2019, accessed 2 August 2023).

^eServices_Australia. What are the Medicare safety nets thresholds, https://www.servicesaustralia.gov.au/what-are-medicare-safety-nets-thresholds?context=22001 (2023, accessed 2 August 2023).

The usual practice in interpretation and discussion of research studies is to begin from the findings of the study. As listed in Table 1, there are methodological issues that raise questions as to the completeness and accuracy of the data collection and analysis. However, these methodological issues, which constitute limitations of the paper, have not been acknowledged. Consequently, the validity of the findings remains questionable.

In this context, the arguments that are expressed in the discussion do not necessarily have a foundation in valid study findings. In addition, the usual practice is that explanation and discussion of the findings should, at least initially, be based on the data in that study, before exploration of proposed actions or further research. There appears to be a conflation between interpretations and proposed actions in this paper.

Specifically, the discussion of Private Health Insurance (PHI) extension to outpatient care is not based on the findings of the study and in this context is substantively non sequitur, for example, ‘…Freed and Allen suggested that the Australian Government’s rule preventing health insurers from covering outpatient consultations had failed to prevent increases in fees…' ¹ and ‘Allowing health insurers to subsidize outpatient psychiatric consultations would improve access for the 45.2% of Australians who hold private health insurance'. ¹ These statements imply that the PHI market can address out-of-pocket costs and propose action which is not supported by the findings of the study, which does not involve research into why and how out-of-pocket costs are addressed to improve equitable access to care. Furthermore, US-style PHI managed care initiatives that encompass outpatient care have not demonstrated efficacy and have instead limited clinical and patient autonomy regarding choice of and access to care. ²

A recent comprehensive health economic analysis of out-of-pocket healthcare costs for Australians observed that there was a linear relationship between costs and healthcare access by patients, that is, the higher the cost, the less patients accessed care. ³ However, this paper noted that there needs to be broader consideration of the healthcare ecological context to develop equitable accessibility, and this may include improving access to out-of-pocket cost subsidies such as the Medicare Safety Net and Pharmaceutical Benefits Schedule. ³