Grattan report finds 2.2 million Australians paid extreme specialist fees in 2025

The report, Out of control, how to rein in runaway specialist fees, published on Sunday, defines an extreme fee as at least triple the official Medicare schedule fee, the benchmark price set by the government. It found that 250,000 extra patients pay extreme fees each year and that the number of Australians affected reached 2.2 million in 2025.

Some specialties are more likely to charge extreme fees. More than 60 per cent of dermatologists and a quarter of obstetrician-gynaecologists are classified as extreme-fee chargers. The most expensive 5 per cent of psychiatrists charged a median out-of-pocket fee of $669 for an initial consultation, more than double their peers. High-cost paediatricians charged a median $362, 212 per cent more than colleagues, and the most expensive cardiologists charged $265.

The report builds on previous Grattan research that found specialist fees soared 73 per cent between 2010 and 2025, three times faster than inflation, wages or other Medicare service fees. In the past year, specialist fees grew 4 per cent on top of inflation. The median fee for a first psychiatric consultation jumped 20 per cent, or $50, while a dermatologist’s fee rose 7 per cent.

Grattan Institute health program director and lead author Peter Breadon said the market was broken. 'This policy failure is hurting patients and exacerbating the cost-of-living crisis,' he said. The report found: 'Some specialists routinely charge patients much more than their peers.'

The thinktank said specialists could not justify exorbitant fees by blaming inadequate government rebates or business costs. While Medicare rebates fell in real terms by $9 between 2012 and 2025, specialists increased patient fees by an average of $37 over the same period, recouping the lost subsidy more than four times over.

The report recommends that any specialist whose annual fees average more than three times the Medicare schedule fee be required to repay the government for all rebates claimed that year, while patients would keep their rebate. This would affect roughly 6 per cent of specialists, about 2,000 doctors. It also calls for federal and state governments to invest $500 million each year to expand public hospital outpatient clinics, create GP advice lines to avoid unnecessary referrals, and impose binding training quotas on medical colleges.

Federal Health Minister Mark Butler told Guardian Australia 'all options are on the table to rein in climbing specialist fees'. He launched a parliamentary inquiry into specialist affordability and accessibility in March.

The Australian Medical Association, in its submission to that inquiry, argued that access and affordability issues were driven by government underfunding over many years and that private health insurance benefits were also failing to keep up. The AMA said Medicare had not matched rising costs after a freeze on rebates and subsequent slow indexation. 'The growing shortfall must be absorbed by medical practices or passed on to patients,' the submission said.

But the Grattan Institute said specialists had on average recouped Medicare losses and then some, and that the real problem was a market with almost nothing to restrain fees.

The Royal College of Physicians president-elect, Dr Julian Kelly, said the peak body would support the government in introducing any regulation to address extreme charging. 'The RACP does not defend excessive fees that create barriers to care or place unreasonable financial pressure on patients,' Kelly said. 'Extreme fee charging is unacceptable.'

The CEO of the Consumers Health Forum, Dr Elizabeth Deveny, said Australians were increasingly 'rationing their own care or skipping follow ups simply because the gap costs more than a week of groceries'. More than 800,000 Australians skip or delay specialist care every year because of cost, the report found.

Legislation passed in September will allow the government to publish all specialist fees on the Medical Costs Finder website from 2027. The website has been voluntary since 2019 and only about 100 specialists out of 6,300 eligible have publicly disclosed their fees.