Well, no one ever likes to hear that prices have gone up, but it is all that we have heard for the last few years. As interest rates and inflation have rapidly gone through the roof, life has become more expensive. I mean, a 6oz coffee costs $5.50 these days. Wasn't that long ago that coffees were $3 and then everyone starting rolling their eyes at those bozos in Melbourne (love you Melbourne!) because they started charging $4. Ah, those were the days.
We look at our rent alone and our costs have more than doubled in the last 18 months. Yikes.
Like every business we have had to make some hard decisions recently. We have resisted prices changes for as long as we can but we are now bowing to the inevitable.
For the first time since 2020 we are implementing price increases on all of our procedure fees. In doing so, we'd like to offer some insights into the financial side of surgery.
Our price increases are, on average, around 10% from our previous pricing.
There is certainly some catch up there, to contend with the massive increase in our costs and to reflect the fact that in the last 4 years we have essentially absorbed those costs as best we can.
The total out of pocket costs for our patients have certainly risen over the last few years, but that has little to do with us, and a lot to do with the change in hospital costs.
We have just run some numbers through our adding machine, and the changes are pretty interesting. As you may be aware, we have a few issues with hospitals these days, particularly in terms of access, but it is also safe to say that hospital costs are a challenge which, whilst totally out of our hands, are an issue that we have to discuss with our patients and in some ways bear the burden of.
Let's look at some examples. In these examples, I am considering the hospital costs for patients who are self-funded (ie. no insurance cover), and we're looking at the range of explant procedures we perform.
Below are the percentage changes we have seen for average out-of-pocket hospital charges between 2020 and 2024:
So, whilst I wince a little at having to put our prices up by ~10%, that is obviously not the only, or indeed the main driver of increased out of pocket costs for surgery.
Hospital costs have DOUBLED, if not TRIPLED for explant procedures between 2020 and 2024.
I knew that prices had gone up, but that has even surprised me.
I'm not pointing fingers here (the issue of the rising cost of healthcare is complex and multi-factorial) but the challenge for me as a surgeon is that I have to be able to provide informed financial consent to my patients, and that involves discussing (and potentially trying to justify) why things cost what they do. And a price increase on the surgical fee is part of that, sure, but I work in an environment where I control only one part in three of the costs patients must bear, with very little control over the other 2 parts.
It is absolutely true that there will be patients who choose not to proceed with surgery based on the additive cost of the anaesthetic and the hospital, on top of surgical fees. I can't control or influence those other fees. But whilst an anaesthetist can go and do another operating list with another surgeon if my patient cancels surgery, and a hospital can offer an operating list to another surgeon, if my patient doesn't proceed then the time and effort we put into generating that work is all for nothing. And let's be honest: neither the anaesthetist nor the hospital are the ones who have to go out there and generate work - they just wait for me to bring the work to them.
The surgeon is in the precarious position of their ability to operate being threatened by the pricing practises of others, whilst holding all the responsibility for generating that work in the first place. That is not a complaint; it is a simple fact.
That is why I think this sort of transparency matters. Patients need to understand why surgery costs what it does, and I think it only fair to make it abundantly clear that a surgeon is just one of the three necessary ingredients for an operation to proceed.