The nation’s private healthcare system has quietly developed a curious habit: asking Australians to bring their wallets to surgery—and leave them lighter than expected.
Fresh data shows that out-of-pocket fees are hitting record highs, especially for those living in the ACT, New South Wales and Queensland. While the national median out-of-pocket cost for a private medical procedure in 2023 stood at $240, ACT residents paid $591—a full 146% above the average. NSW wasn’t far behind at $279, and Queenslanders chipped in $258.
The report, released by Private Healthcare Australia and prepared by consultancy firm Mandala, paints a picture that many Australians will find uncomfortably familiar—high bills, murky pricing, and little control. It also warns that unless something changes soon, things are about to get worse. By 2030, the average person could be spending nearly $2,400 just on the out-of-pocket portion of a hip replacement, and the national spend on these “extras” could top $1.6 billion annually.
And while “known gaps” and “no gap” billing arrangements are still the norm for 92% of providers, there’s a sting in the remaining 8%. Those providers, says Private Healthcare Australia’s chief executive Dr Rachel David, are where the real pain is being felt—and not just in joints and spines. “We are seeing some big fees being charged for common procedures, particularly hip replacements, knee replacements, spinal surgery and weight loss surgery,” she said.
What’s more, the true cost of care might be even higher than the stats suggest. “Consumers also face ‘invisible’ out-of-pocket costs,” Dr David warned. These include cheeky “booking” or “admin” fees that don’t show up in official billing data—and which in many cases aren’t legal. Known as “side-billing” or “split billing,” the practice continues to slip under the radar due to poor enforcement.
Despite the mounting costs, less than 1% of doctors have made their fees public on the federal Medical Costs Finder website. The site was set up by the previous government in 2019, but has failed to gain traction. Now, the Albanese government has thrown $7 million at the problem in the most recent budget, pledging to overhaul the tool so Australians can actually see what a doctor charges—before they’re wearing a surgical gown and being asked to sign forms.
This transparency push has gained momentum, with independents like ACT Senator David Pocock championing the cause. Dr David said more needed to be done to ensure patients have proper “informed financial consent” and don’t end up making choices under pressure. “Under no circumstances should fees be discussed with patients under duress, such as on the day of surgery,” she said.
She also pointed to an uneven distribution of specialists around the country, which is making matters worse. After enduring years of training, many doctors prefer to set up shop in more affluent suburbs, creating pockets of high-cost, low-competition care. “The distribution of medical specialists is not proportional to the population within each state and territory,” Dr David explained.
One of the root causes of the issue is that under Australian law, insurers can’t cover specialist consultations unless they’re tied to a hospital admission. That leaves everyday visits—say, seeing a surgeon for a referral—squarely in the consumer’s lap. And while many countries regulate doctors’ fees, the Australian constitution blocks federal governments from doing the same. Doctors here can charge what they like.
And some certainly do. “We’ve heard reports of out-of-pocket bills exceeding $10,000 for common operations like prostate removal surgery,” Dr David said. She stressed that cost doesn’t reflect quality. “All medical specialists in Australia are highly trained. You do not need to pay that much to get a high-quality procedure in the private hospital system.”
If that’s meant to be reassuring, the numbers coming out of the banks suggest otherwise. Commonwealth Bank data shows that 71% of Australians delayed or cancelled a healthcare appointment in 2023, with price being the top reason. Of those who needed specialist care, 28% avoided it altogether after a GP referral.
Unless there’s a course correction, the report says 1.25 million Australians will be avoiding or delaying a specialist visit in 2030 because they simply can’t afford it. That will pile further pressure on the public system—a burden that private health insurance was supposed to relieve.
And here’s the rub. More than 15 million Australians now hold private cover—a staggering 55% of the population. These are people actively paying to ease demand on the public system. Yet they’re the ones now facing rising out-of-pocket fees, murky costs, and the very real chance of a surprise bill. It’s a strange reward.
While the upgrades to the Medical Costs Finder are a welcome first step, they’re just that—a first step. Until Australians can actually shop around for care, or at least understand the fees they’re agreeing to, the trust gap will keep growing. And it won’t be the only gap doing damage.
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