Costs Associated With Surgery: Explained
Many patients having surgery need to contribute towards the cost of their treatment; in public hospitals these costs are covered by State Government (which seeks to limit it’s costs by limiting access to all but essential services). The majority of specialist treatments (specialist appointments and elective surgery) occur in the private system where treatments are funded by private insurance, Medicare payments and patient payments. Private insurance covers the large majority of costs associated with treatment (hospital costs) but will usually contribute only a couple of hundred dollars per operation to the doctor/surgeon providing treatment. Medicare payments have not been indexed to CPI (Consumer Price Index) so contribute less every year.
In our practice we have two surgeons, two physicians, 2 nurses, 3 admin staff, dietitians and psychologists, as well as the general expenses involved in running a busy office. The bulk of the fees associated with the services we provide are to cover these expenses and wages.
Covering the Costs of Surgery and Aftercare
Regardless of whether a medical service is provided in the public or private system the overall actual costs are reasonably similar. There are many treatments not offered in public hospitals which is why patients choose to use the private health system. Please see the various options for payment of treatment below:
Self-funded surgery in a private hospital (patients without health insurance)
In this situation patients will have to cover all of the costs associated with their admission. It is generally impossible to determine an exact figure for the total cost of surgery, for example unforseen events such as additional treatment will incur further costs. To give you a rough idea of some of the costs involved in hospital admission:
- Bed costs of up to $800 per day
- Theatre costs of $1500 per hour, in addition to this the costs of theatre equipment ($800- $5000 depending on the operation).
- Admission to Intensive Care Unit (ICU) can be up to $3,000 per day
Hospitals will provide quotes to patients before admission and expect an up-front payment on the day of admission for the estimated amount. Patients having major orthopaedic operations or cancer related operations can usually expect out of pocket expenses of $15,000 – $25,000, while patients having weight-loss surgery will have total expenses of $9,000 – $18,000, with direct hospital costs being up to 75 – 90% of this total cost (this is the amount covered by private health insurance if you have taken out private hospital cover).
Medicare will contribute a small amount towards your medical costs (usually $1200-$1500, but this is dependent entirely on your treatment).
If someone is considering surgery of some complexity (weight loss surgery is a good example of this) they are likely to face significant hospital costs at the time of their operation as well as about a 5-20% chance of readmission for treatment in the 1-3 years after surgery (endoscopy, gallstones, adhesions, hernia, excision of excess skin).
As Obesity is a pre-existing condition the Private health funds will not cover admissions for surgery until the person has been with them for 12 months.
Private patient in a public hospital
Being a private patient in a public hospital allows patients to opt for treatment by the consultant of their choice. It is very unlikely that patients choosing this option will get ‘gap accounts’ from their treating doctors so it is a very cost effective option for patients who have medical insurance. The main problems with this option relates to the fact that many treatments are not offered in public hospitals, and public hospitals often have long waiting lists (waiting times are determined by a patients illness not insurance status) which can be over 12 months.
Public patient in a public hospital
Hospital treatments are provided free of cost. Patients will be admitted to hospital under a Consultant (Specialist) but are typically treated by training doctors employed by the hospital. Costs of treatment outside hospital (medicines and appointments) still need to be paid for, while Medicare provides a subsidy for these items there is an expectation that patients will end up paying a component of their outpatient medical costs.
Private patient in a private hospital
Patients choosing this option have a choice regarding what treatment they receive, who treats them, and how long they have to wait until they are admitted to hospital for treatment. The health funds will pay for the costs of the hospital admission and all of the items used during the hospital stay, they will also ‘top up’ the Medicare fee paid to treating specialists (amount varying between 20 and 80% depending on the health fund and the treatment undertaken).
As there is a difference between Medicare payments and medical charges there can be expenses in addition to what the health fund pays and what the patient will have to cover. This occurs because Medicare frequently pays the same amount for a simple procedure as it does for a complex one (for example an operation on a blocked prostate gland taking about an hour to perform receives the same fee as total removal of the stomach which takes 5 hours). ‘Gap Costs’ indicate the amount that patients have to pay to undergo treatment.
We calculate gap costs depending on the complexity of the surgery performed and the time it takes. For weight loss (bariatric surgery) we are happy to offer ‘no-gap’ surgery and we charge patients a fee separate to their surgical fee; this covers the expenses of our clinic and allows us to provide follow-up care without charging above the Medicare fee for up to three years after surgery. In addition we offer patients the reassurance that should any treatments be required to remedy complications or problems we provide them without charging above what health funds/Medicare will cover.
What are the costs of Bariatric (weight loss) surgery?
Weight loss surgery has been conclusively shown to increase life expectancy and quality of life of patients suffering from morbid obesity. While the surgery itself seems expensive, it can actually be seen as a positive investment for the majority of patients as it often improves employment options, decreases medical costs and improves cash flow through reduced living costs (reduced food bills). Safe and effective bariatric surgery, performed on appropriately selected individuals are one of the only truly cost neutral or positively geared interventions available in medicine today.
NSW is the only state that doesn’t offer Weight Loss Surgery in the public hospital system. Our program fee varies between $4,000 and $5,500 and covers patients for surgery, complication management (including re-operation) and follow-up for up to 3 years after surgery.
Do you need more information?
If you would like to speak to one of our specialised team or enquire about making an appointment at our clinic,
please call 02 9553 1120 or submit an enquiry.