When you undergo surgery or a medical procedure, your anaesthetist provides specialist medical care before, during and immediately after your procedure. This page explains what your anaesthetic fee pays for, and how Medicare and private health insurance contribute towards it.
Your fee is not take-home pay
It is easy to assume that an anaesthetist's fee is what the anaesthetist earns. It isn't. Like any independent specialist practice, the fee has to cover the full cost of running that practice, before anything is left as income.
Professional indemnity insurance
Medical indemnity cover is compulsory for every practising specialist.
Continuing medical education
Ongoing education, courses and conferences to keep knowledge and skills current.
Registration and compliance
Medical registration, college membership and the professional standards, audit and CPD requirements that come with them.
Practice costs
Rooms, billing and booking systems, IT, communications and the other running costs of a medical practice.
Staff wages
The practice staff who manage bookings, estimates, accounts and patient enquiries.
No paid leave
Private specialists receive no sick leave and no annual leave. Any time away from work is unpaid, so it must be allowed for in the fee.
Understanding how anaesthetic fees are funded can also be confusing. Medicare and private health insurance contribute towards your medical expenses, but they do not necessarily cover the full professional fee.
The amount you pay depends not only on what your anaesthetist charges, but also on what Medicare and your private health insurer contribute.
1. The care your fee covers
Your anaesthetist is a specialist medical doctor who has completed extensive postgraduate training in anaesthesia, perioperative medicine, pain management and resuscitation.
Their responsibilities extend well beyond administering medications to keep you asleep.
Before your procedure
Your anaesthetist reviews your medical history, medications, previous anaesthetic experiences and relevant investigations. They assess your individual risks and develop an anaesthetic plan appropriate to your health and the proposed procedure.
During your procedure
Your anaesthetist administers and manages your anaesthetic while continuously monitoring your breathing, oxygen levels, blood pressure, heart function and other vital signs.
They manage pain, maintain your physiological stability and respond immediately to unexpected changes or complications.
After your procedure
Your anaesthetist oversees your emergence from anaesthesia, arranges appropriate pain relief and management of nausea, and ensures that you receive suitable postoperative care.
Your anaesthetic fee reflects this specialist care, together with the complexity, duration and circumstances of your procedure.
2. What is the Medicare Schedule Fee?
The Australian Government publishes the Medicare Benefits Schedule (MBS), which assigns a dollar amount, known as the Schedule Fee, to thousands of medical services, including anaesthesia.
Despite its name, the Schedule Fee is not the price of your anaesthetic.
For eligible private patients receiving anaesthesia in hospital, the usual funding arrangement is:
- Medicare: pays 75% of the Medicare Schedule Fee.
- Private health insurance: generally pays at least the remaining 25%, subject to eligibility and policy conditions.
- Your anaesthetist: independently determines their professional fee.
Your insurer may contribute additional benefits, depending on its arrangements with your anaesthetist.
The difference between the professional fee and the combined Medicare and insurer benefits is your patient contribution.
3. Why doesn't Medicare cover the full professional fee?
Medicare Schedule Fees have not consistently kept pace with inflation or the increasing costs of providing specialist medical care.
Over several decades, Medicare rebates have experienced periods of inadequate indexation and government-imposed freezes.
During these periods, the costs of providing medical services have continued to increase. These include medical indemnity insurance, professional registration, practice administration, staffing, equipment, technology, ongoing specialist education and regulatory compliance.
When Medicare benefits increase more slowly than the costs of providing medical care, the difference between government funding and professional fees can widen.
This means that an increasing patient contribution does not necessarily indicate an excessive increase in your anaesthetist's fee. It may also reflect the declining value of Medicare benefits relative to the cost of care.
4. How does private health insurance work?
Private health insurance helps cover eligible medical services provided during hospital treatment.
However, having private health insurance does not necessarily mean that your full anaesthetic fee will be covered.
Health insurers generally contribute towards the Medicare Schedule Fee and may offer additional benefits through arrangements with participating doctors. These are commonly known as no-gap and known-gap schemes.
No-gap arrangements
Under a no-gap arrangement, a participating anaesthetist agrees to accept the combined Medicare and insurer benefits as full payment for the eligible service. The patient makes no additional contribution towards that anaesthetic fee.
Known-gap arrangements
Under a known-gap arrangement, an anaesthetist may charge a patient contribution up to a maximum amount specified by the insurer. For many schemes, this maximum has historically been around $500.
For most funds, the maximum permitted patient contribution under their known-gap arrangements has remained unchanged for the last 20 years.
Over that same period, inflation and the costs of providing medical care have increased substantially.
Although insurers may adjust their overall medical benefits, these longstanding limits restrict how much participating anaesthetists can charge patients while remaining within the scheme.
Participation in these arrangements is voluntary.
5. Why can exceeding an insurer's known-gap limit substantially increase what you pay?
This is one of the least understood aspects of private health insurance.
Under many known-gap arrangements, an insurer pays an additional benefit when the anaesthetist's fee remains within its permitted limits.
However, if the fee exceeds that limit, the insurer may withdraw its additional benefit and pay only the minimum amount required under the applicable legislation.
As a result, a small increase in an anaesthetist's professional fee can cause a much larger increase in the patient's contribution.
An example of how this works
Consider a hypothetical anaesthetic with a Medicare Schedule Fee of $1,000.
| Within known-gap limit | Above known-gap limit | |
|---|---|---|
| Anaesthetist's professional fee | $2,000 | $2,100 |
| Medicare benefit | $750 | $750 |
| Private health insurance benefit | $750 | $250 |
| Your contribution | $500 | $1,100 |
In this example, the anaesthetist increases their professional fee by $100. However, because the fee exceeds the insurer's known-gap conditions, the insurer reduces its contribution by $500. The patient's contribution therefore increases by $600.
This illustrates why an increase in the amount a patient pays cannot automatically be attributed to an equivalent increase in the doctor's fee.
This example is illustrative. Actual benefits and known-gap conditions vary between insurers and policies.
6. Why might the same anaesthetic cost you differently at different hospitals?
Some private health insurers pay a higher, or uplifted, benefit for certain procedures at certain hospitals. In these cases the insurer's benefit can come close to the fee recommended by the Australian Medical Association (AMA) for that service, and you may have no out-of-pocket cost for your anaesthetic.
These arrangements depend on the insurer's agreements with particular hospitals and for particular procedures. If you have the same procedure at a different hospital, with the same anaesthetist charging the same fee, your insurer may pay a much lower benefit. Your contribution could then be more than $1,000.
The difference is determined by your insurer's arrangements, not by the anaesthetic care you receive or the fee your anaesthetist charges. Patients may reasonably ask why a benefit available at one hospital is not available at another.
Some doctors and professional organisations have raised concerns that arrangements linking benefits to particular hospitals or providers could move Australia towards a managed care model, in which insurers have greater influence over where, and by whom, patients are treated. I have written about this question previously: Managed care: coming to Australia earlier than we thought? (MJA InSight+, 2021).
Before your procedure, it is worth asking your insurer what benefit it will pay for your anaesthetic at your chosen hospital. The practice can give you the details your insurer will need.
7. Why haven't private health insurance benefits kept pace?
Private health insurers determine their additional medical benefits and the conditions under which these benefits are paid.
Although private health insurance premiums have increased over time, this does not necessarily mean that the benefits paid for individual specialist medical services have increased at the same rate.
In particular, for most funds the maximum permitted patient contribution under their known-gap schemes has remained unchanged for the last 20 years. These limits have therefore declined substantially in real terms.
Private health insurers collectively generate billions of dollars in annual revenue and substantial profits. However, their financial performance does not necessarily translate into higher benefits for individual medical services.
When considering the affordability of specialist medical care, it is important to examine both the professional fee charged and the contributions made by Medicare and private health insurance.
The cost to the patient is influenced by all three parties, not solely by the anaesthetist.
8. How does your anaesthetist determine their fee?
Anaesthetic fees are generally calculated using a recognised system of billing units that considers the nature and duration of your procedure.
Your anaesthetist's professional fee may reflect:
- The type, complexity and duration of your procedure.
- Your medical conditions and individual anaesthetic risks.
- The need for specialised monitoring or anaesthetic techniques.
- Whether your procedure occurs during normal working hours or after hours.
- The professional expertise, responsibility and resources required to provide your care.
- The costs of running the practice, set out under Your fee is not take-home pay.
Your anaesthetist determines their professional fee independently.
The Medicare Schedule Fee is used to calculate government benefits. It does not determine what your anaesthetist must charge.
9. Understanding your patient contribution
Your patient contribution is the difference between your anaesthetist's professional fee and the combined benefits paid by Medicare and your private health insurer.
This is sometimes called a gap or out-of-pocket expense. However, these terms do not explain how the amount is determined.
Three separate decisions influence your contribution:
- The Australian Government
- Determines the Medicare Schedule Fee and associated Medicare benefits.
- Your private health insurer
- Determines its additional medical benefits and the conditions under which they are paid.
- Your anaesthetist
- Determines the professional fee for providing your specialist medical care.
Your contribution is the amount remaining after the applicable benefits have been deducted.
10. Will I know my anaesthetic fee before my procedure?
Wherever possible, you will receive an estimate of your anaesthetic fee and anticipated patient contribution before your procedure. This is known as informed financial consent.
Your estimate may include the anticipated professional fee, expected Medicare benefit, applicable private health insurance benefits and your estimated contribution.
Occasionally, the final fee may change if your procedure takes longer than expected or additional anaesthetic services are required.
If you have questions about your fee or concerns about affordability, please contact the practice before your procedure.
We understand that medical expenses can place pressure on patients and families. Our aim is to provide clear information so that you understand the costs associated with your anaesthetic care.
The bigger picture: understanding who pays for your care
Australia's healthcare system relies on contributions from Medicare, private health insurers and patients.
Over time, inadequate Medicare indexation, periods of rebate freezes and longstanding restrictions within private health insurance arrangements have contributed to a widening difference between government-determined benefits and the costs of providing specialist medical care.
Although your anaesthetist determines their professional fee, they do not determine how much Medicare or your private health insurer will contribute.
The amount you pay for your anaesthetic is determined not simply by your anaesthetist's fee, but also by the funding decisions of Medicare and your private health insurer.
Our priority is to provide safe, high-quality specialist anaesthetic care, supported by transparent fees, informed financial consent and clear communication.
Accounts and enquiries
Details of how and when accounts are issued, and the payment options available, will be added here.
For questions about an estimate, an account or affordability, please contact Anaesthetic Services on (03) 9427 7899 or bookings@anaestheticservices.com.au (Monday to Friday, 8:30am to 5:00pm). Please don't include detailed medical information in your enquiry.
Further reading
For more on how anaesthetic fees and rebates are funded in Australia:
- Getting to the facts on specialist fees. Australian Society of Anaesthetists (ASA), December 2025.
- Anaesthetists call for fair indexation to reduce patient out-of-pocket costs. Australian Society of Anaesthetists (ASA), August 2025.
- Private Health Insurance Report Card 2025. Australian Medical Association (AMA).