A lesson for Mark Butler? When New York published specialist fees, prices went up
As we know, the Minister for Health and Ageing is currently waiting for MPs to legislate his plan to publish the fees of individual (non-GP) specialists.
It’s about transparency, obviously — the need to give patients the information to shop around.
It is also about allowing the market to function openly in ways that may reduce what Mr Butler considers the excessive and unjustified fees being charged by some doctors.
But he might want to spend a minute thinking about New York State and the law of unintended consequences.
Its 20 million residents have direct experience with what Mark Butler is trying to do, and maybe some lessons for him.
In 2017, as part of a randomised trial, a patient group FAIR Health added fees to its website and branded as YouCanPlanForThis.org.
Some New Yorkers were shown the average price that individual specialists were charging for 100 common procedures, based on insurance data. Others, the control arm, saw aggregated data.
“There is a logic to it,” said one of the researchers, Professor Sherry Glied, former assistant secretary at the US Department of Health and Human Services.
“For one, it seems only reasonable that, before people are asked to pay for something, they should know how much they are going to pay,” said the professor of public service at New York University.
“But I think the stronger case that people made was that the market would become more competitive and prices would fall.”
Billboards advertising the site appeared in Times Square and on the city’s taxis, broadcasting legend Larry King endorsed the scheme and ads went out on Facebook and in magazines.
So, did it revolutionise healthcare for New Yorkers?
Bluntly, no.
Between 2017 and 2019, only 10,000 New Yorkers used the site each month. And based on insurance claims, individual doctors’ market share did not change.
Professor Glied said it might partly reflect the complexities of US healthcare, with patients not seeing enough benefit from the information the site offered.
“We do not really price things in healthcare in a way that is useful to people,” she said.
“Say you find a doctor who will charge $5000 for knee replacement surgery. Great, but you do not know how much the anaesthetist is going to charge.
“Even if you get a quote, it is not a binding quote.
“The doctor can still say, ‘The procedure was actually more complex,’ and charge you twice as much.”
However, the research did show that doctors appeared to raise their prices after suddenly seeing what their competitors were charging.
The researchers found a 0.75-1.76% increase in charges to insurers over the two-year period in the intervention arm, with larger price hikes by doctors whose charges had been below average.
“If you are a patient, maybe you think of healthcare as you would a car,” Professor Glied said.
“You have the mindset of, ‘I want this Lexus. I am going to go to six different dealerships to see the best price.’
“But you probably have a doctor in mind — say, a friend has told you Dr Jones is great — so you just call Dr Jones’ office and ask what they are charging.
“On the other hand, Dr Jones absolutely wants to go to this website and see what everyone else is charging. That is useful information for them.”
Still, Australian healthcare is different from the notorious US healthcare system.
In the US, doctors who sign agreements with insurers are labelled ‘in-network’, and face limits on what they can charge patients with that insurer.
So, the website’s benefits should have been limited to, or at least more prominent for, patients seeking out-of-network doctors.
But in areas with more out-of-network doctors, the average price hike was worse, at 2.5%, the research showed.
In the “Wild West” of Australian healthcare — as Professor Glied put it, in reference to the lack of similar price limits — it therefore seemed unlikely that publishing fees would bring prices down.
Peter Breadon, health program director at the Grattan Institute, is a prominent supporter of Mark Butler’s plans for greater fee transparency through the Medical Cost Finder website.
But he said his support is about fixing the information imbalance, that patients have a right to know what is coming their way when it comes to the costs of medical care.
He is more sceptical that this transparency can itself reduce specialist fees — an outcome New York’s experience suggests is unlikely.
“It is notoriously hard for patients to evaluate the quality of healthcare, meaning they may equate high costs with good care even though there is no evidence to support that link,” Mr Breadon said.
“Rising specialist fees are driven by a range of factors, including avoidable demand, workforce supply, workforce distribution and the size and location of public specialist clinics.
“That will take a comprehensive reform agenda.”
No doubt true.
But it will be a bad look if Mr Butler’s first legislative venture to sort out the fees he claims are out of control makes the situation worse for patients, rather than better.
Read more:
- Patients shown specialists’ fees before GP referral under health dept vision
- Mark Butler’s plan to publish average fees of individual specialists risks misleading patients, Avant warns
More information: Am J Health Econom 2026; 13 Feb.
