Australians are paying ‘extreme’ specialist fees. Here’s how the government can rein in costs

0 November 8, 2026 07:01

The cost of seeing a psychiatrist, paediatrician or other medical specialist is skyrocketing, and reforms are targeting low-hanging fruit. We need to think bigger.

Xavier Arnau/Getty via Canva, Gerardo Huitron/Getty via Canva, Pixelshot/Canva, The Conversation, CC BY-NCSeeing a specialist keeps getting more expensive, and a new Grattan Institute analysis shows the problem is getting worse, not better.

After years of inaction, reform may finally be on the agenda.

At the end of last year, Health Minister Mark Butler said fees to see medical specialists – such as paediatricians, dermatologists and psychiatrists – were “out of control”. The government has launched a parliamentary inquiry, and the federal health department has consulted on a range of reform options.

To make specialist medical care affordable, the consultations and inquiry must trigger overdue reform to train more specialists, fund more free public clinic appointments, and rein in the most extreme fees.

Specialist fees are out of control

Our 2025 report, Special Treatment, found that between 2010 and 2025, fees for specialist care outside hospitals grew 73% in real terms (meaning adjusted for inflation). That is many times faster than for GPs or other Medicare services. Since then, fee growth has continued unchecked. In the past year alone, specialist fees rose 4% faster than inflation.

Some specialties have seen especially steep rises. The median out-of-pocket fee for an initial psychiatry appointment is now A$351, up $90 in real terms in the past two years. The median initial dermatology appointment costs $217, up $28.

At the same time, fee-free care is dwindling. Fewer than a quarter of initial specialist appointments are now bulk-billed, down from about a third a decade ago. In urology, dermatology, psychiatry, and ear, nose and throat (otolaryngology), it’s fewer than one in ten.

And the most expensive specialists are pulling further ahead.

The priciest 5% of psychiatrists charge a median of $669 for an initial appointment, and their fees have risen $58 a year faster than inflation.

The most expensive paediatricians charge $362, triple what their peers charge. Their fees have risen $50 a year in real terms, compared with just $3 among the other 95% of paediatricians.

Some specialists charge, on average, more than triple the Medicare Benefits Schedule (MBS) fee – the basis for government funding (for care outside hospital; patients usually get back 85% of the MBS fee).

While we argue these can only be described as extreme fees, they are becoming more common. Last year, 2.2 million patients paid at least one extreme fee, more than four times the number a decade ago.

Don’t blame Medicare, or costs

Doctors’ groups blame Medicare rebates for not keeping up with inflation. It’s true government rebates have fallen in real terms, but fees have risen far faster. Since 2012, the average specialist rebate has fallen $9 in real terms, while average out-of-pocket costs have risen $37.

In psychiatry, the rebate for an initial appointment has fallen $44 in real terms since 2012. Fees rose by much more than that in just the past year.

Rising practice costs don’t explain it either. Tax data show private specialist practices’ costs grew just 1.8% a year in the 15 years to 2024–25 – slower than inflation – while their profits grew.

The specialist market is broken

Specialist fees are rising because the usual checks on price are missing. In most markets, if you charge too much, customers go elsewhere. With specialists, there’s often nowhere else to go.

Many areas don’t have enough specialists, especially outside the big cities. The free option, a public clinic, can mean waiting months or even years.

Even when there is a choice, patients aren’t well placed to make it. A GP’s referral is the biggest influence on which specialist a patient sees, and many don’t find out the price until they’re handed the bill. And when facing a health scare, patients might not have time to shop around.

The hard reforms remain

Governments have started to act.

The parliament has passed legislation to publish individual specialists’ fees, and the health department has consulted on bigger reforms. Victoria has funded more specialist clinic appointments for children, and several states are establishing systems to give GPs quick access to specialist advice, so that patients don’t need to make a separate appointment.

But these are mostly the easiest, cheapest steps, and not the ones that will make the biggest difference.

In our 2025 report, we recommended that the federal government set clear training targets for each specialty. The targets should dictate where funding for trainee places goes across the specialties, and how many are in rural areas. Then specialist colleges should be held to account for achieving them. The May budget rolled over existing specialist training funding for another year, without adding new places.

We also recommended governments invest $500 million a year in building the capacity of public clinics, targeting areas with the worst wait times. Extra funding should expand clinics, build new ones, and make telehealth available where it’s the best option.

Better information about fees is good. But it won’t help if you can’t afford them and face a year-long waiting list for a public clinic.

It’s time to rein in extreme fees

Training more specialists and expanding public clinics is essential. But this will take time, and fees are rising every year. That’s why governments must also tackle extreme fees directly.

We recommend a simple rule. If a specialist’s fees average more than triple the MBS fee across a year, they should repay the Medicare rebates for their services that year. Patients would keep their rebates, so the penalty falls on the specialist, not the patient.

This threshold is deliberately high. Averaging across a whole year leaves room for legitimately high fees, such as those for complex patients or long appointments. It would only affect about 6% of all specialists, and they wouldn’t be able to avoid it by shifting fees around. That small minority charge around half of all extreme fees, and almost all the very highest fees.

Charging unjustifiable fees is a choice. It should be a costly one for specialists, not for patients.
Grattan Institute has been supported in its work by government, corporates, and philanthropic gifts. A full list of supporting organisations is published at www.grattan.edu.au.Thomas Shortridge does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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