Agreement Reached

The ASO and Government have now reached a decision on the Medicare rebate for cataract surgery item number 42702. Government have agreed to only reduce the rebate by 12%, and from 1 February 2010 the rebate for patients will be $548.85, which is a significant improvement.

Government has advised that no retrospective reimbursements will be made for those patients who undertook cataract surgery between 1 November 2009 and 1 February 2010 and who experienced additional out of pocket expenses due to reductions in the rebate.

Government has also agreed to provide 5 million dollars in funding to improve remote and indigenous ophthalmic outreach services, which are currently performed free of charge by many Ophthalmologists.


The 2009 Federal budget contained a nasty surprise for older people, when the Medicare cataract rebate was slashed by half.

Here we examine the facts, not the spin.  The recent attempts by the Health Minister to villify the medical profession are nothing more than a smoke screen to distract from the 50% budget cut to cataract surgery.

Minister Roxon has accepted poor advice from her department on this matter. Hansard transcripts from Budget Estimates Committee, clearly demonstrate the lack of consultation and absence of modelling which accompanied this decision.


Destroys the value of private insurance by increasing the gap to $900 for patients who previously paid nothing out of pocket (no gap schemes).

Private insurers have announced that they will also reduce their patient contribution if the government makes its 50% cut. A double whammy. This will increase gaps for privately insured by $900 per cataract operation in those patients who currently receive ‘no gap’ surgery. (even with no changes to current doctor's fee).




Will disadvantage pensioners and low income earners preferentially, creating a two-tiered health system.

  • Because they most commonly receive ‘no gap’ benefit surgery

  • Because they most commonly choose to ‘self fund’ their cataract procedure



Will increase public hospital waiting lists which are already inundated.

  • the premise being, that most patients who are given a realistic rebate towards procuring their surgical service will endeavour to make up the cost difference themselves and avoid the public system (leaving it accessible to those who really need it).

  • The removal of this positive incentive to self fund (or obtain health insurance) ultimately discourages personal contribution to health costs which should be encouraged. Personal contributions to health costs by those who have the means are perhaps the greatest single financial resource available to supplement the taxpayer health budget.



Will increase risk to the elderly community:

  • Falls and hip fractures by 3x

  • Social isolation and loss of independence

  • Loss of drivers licence and reduced driving safety

  • Depression

  • Loss of mobility and earlier institutionalisation



A poor use of taxpayer's money (poor health economics):

  • Private cataract surgery is already highly cost effective for the taxpayer. Private surgery costs the taxpayer only 20% of the amount it would cost in the public system. How?...

    If cataracts are done privately, the taxpayer contributes about $620 (rebate is paid to private insurer). If done through the public system then all costs revert to the taxpayer and it costs about $3500). Five times more when done in a public hospital!

  • So after the 50% budget cut is made, Minister Roxon will save $310 per cataract (half of $620), but the taxpayer will incur the whole cost of approximately $3500 for every patient who transfers to the public system!

  • Thus if only 11% of patients revert to public care, then it completely neutralises the budget savings from the rebate cut.

  • These minor savings she is making will be eaten up many times over by the downstream costs of not doing cataract surgery (see point 4 above). 

  • Therefore the net financial cost to the taxpayer will be many times more than Minister Roxon is planning to save on the actual surgery costs (and at a further cost in human misery and waiting list blowouts.)




This budget cut disadvantages 120,000 older voters every year who actually have the surgery



Will concern 25% of the voting population who are in the cataract age group (age >55yrs) and the next 25% who have older parents to worry about.



There was no consultation prior to the budget cut (Hansard from Budget Estimates)



There was no modelling undertaken of the shifts in private / public mix or the increased burden on the public hospital system. (Hansard)



The Ministers rationalisations are dubious and one might reflect on whether this decision was based on ideology dressed up as economic prudence. Every public comment made thus far has been an exaggeration, incorrect or unrepresentative. The Minister is receiving poor advice and repeating it in public without checking the facts for herself.

Her Spin

Our Response


Can be done faster than                 10 years ago due to new technology
False. Nothing in technology has changed since 1997 when the last budget cut was made. The rebate has already been reduced by 60% (in 1985 and 1997) to reflect the productivity gains from improved technology. This represents an 80% cut when adjusted for CPI. A further 50% cut is baseless, precipitous and severe.
At the 2 largest private eye centres in Australia the average time of cataract surgery theatre time were 28 and 31 minutes respectively, not 15 minutes as claimed by the Minister.

The ‘service cost’ of providing this operation is not related to the theatre time but rather the overall infrastructure costs of a modern eye clinic which increase every year.

Doctors doing too many operations and costing Medicare

The major driver of surgery is a demographic aging boom and an active older population demanding surgery for improved vision quality.

Operation is now ‘simpler’


It requires high skill and is unforgiving of the slightest error in judgement or technique.

Basic competence is achieved after 5 years of specialist surgical training and mastery  of the technique takes 10 years of experience. Attempts to make light of this procedure as 'simple' or 'common' are misleading.

It is not a minor or low risk procedure and the price of failure is enormous.

Dispute is about doctor’s fees

Doctors' fees are not affected.
Patient’s rebate is being reduced leaving patient worse off and more out of pocket.


‘Rich doctors’ smear campaign expected
This is a smokescreen for a 50% cut in patient funding using doctors as scapegoats.

The average increase in cataract fees since 1993 has risen by only 1.8% per annum whilst costs of business have soared.

The Health Minister never deducts business overhead costs when quoting supposed "Medicare earnings".  Businesses have expenses which she seems to ignore in her statements.

She cites extreme examples (top 10) which are not representative of the average suburban doctor.


Can you appreciate the waste of taxpayer money in saving $307 on the Rebate cut, yet costing $3500 to the public hospitals if the patient goes public ? That is not good use of taxpayer money.

Why was there no modelling on the likely effects on public hospital waiting lists?


 A 50% cut is not a minor adjustment and has huge social implications. People are upset - what happened to community consultation? And why was there no consultation prior to these cuts?


Why disadvantage 123,000 older patients per year for a saving of 30 Million, when an 11% shift to public care will wipe out all of your proposed savings? That is not very good economics.


Do you appreciate how your changes will create a two-tiered system and disadvantage pensioners and low income patients?

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