This is the third and final Perspective of a three-part series on Informed Financial Consent by our Treatment and Supportive Care Team. In our first Perspective, we discussed how out-of-pocket treatment costs are causing Australians to experience financial stress and why being aware of these costs upfront is important to prevent ‘bill shock’.
The second perspective, set out the importance of informed financial consent to patients and why disclosing the costs of medical treatment is, and should be, part of a doctor’s duty of informed consent.
And in our final Perspective of the series, we further explore the importance and meaning of informed financial consent, and suggests that the legal costs disclosure obligations placed on lawyers can serve as a model for a legal duty for doctors to discuss and disclose costs.
Reducing financial toxicity through informed financial consent
Patients have a right to informed consent, which we have argued includes informed financial consent; costs disclosure by doctors is and should be a recognised legal duty. This is especially important given the impact that out-of-pocket costs and ‘bill shock’ can have on a person’s physical and emotional health. But what should informed financial consent look like in practice?
Professional standards for doctors about informed financial consent are found in various codes of conduct. These codes are not legally binding, so a breach of these codes will not automatically result in enforcement action. However, sanctions may be imposed by medical professional bodies, including medical colleges. Such codes instruct doctors to ensure that ‘patients are informed about your fees and charges’; that they should be ‘transparent in financial and commercial matters relating to your work’; that they should ‘encourage open discussion of health care costs’; and to set ‘fair and reasonable fees’.
These acknowledge the rationale for informed financial consent, but don’t tell doctors what steps they need to take to ensure their patients are properly informed of the costs of care, throughout the course of their treatment. This lack of practical guidance is perhaps the reason why studies have repeatedly found that a significant number of patients experience ‘bill shock’ and financial stress.
So how can doctors be confident that their patient is informed of, and consents to, their fees? What does ‘encouragement’ of an ‘open’ discussion of health care costs look like? How do doctors know if they have been ‘transparent’ with patients—what exactly should a doctor disclose and when?
One mechanism that could improve the experience of informed financial consent, for both consumers and doctors, is to provide more practical guidance about costs disclosure requirements for doctors. And a starting point for this guidance may be found in the cost disclosure rules for lawyers. Below, we look at some of the parallels between the medical and legal professions, and how the process of informed financial consent in legal practice may assist in the development of clearer expectations for doctors discussing treatment costs with their patients.
Why look to the law?
The legal costs and costs disclosure obligations for lawyers are useful to consider because of the similarities between the medical and legal professions.
- Both lawyers and doctors are recognised as belonging to ‘professions’ that perform important social functions for the public good — facilitating access to law and justice, and access to health treatment, respectively. Because, as professionals, lawyers and doctors possess specialist knowledge and skills, their professional activities are accompanied by a set of ethical responsibilities and ethical standards that they must comply with. Both professions are accountable to those they serve and to society.
- Lawyers and doctors both provide their specialist professional services on a largely fee-for-service basis.
- All practising lawyers and doctors have a legal duty to exercise reasonable care and skill.
- Although the lawyer-client relationship and the doctor-patient relationship are very different, there are some similarities in how lawyers and doctors are expected to engage with their clients and patients, respectively. Under law, the relationship between a lawyer and their client is a ‘fiduciary’ relationship, meaning it is a relationship based on trust and confidence. Lawyers must maintain client confidentiality, must act in good faith and not exert undue influence, and must always act in the best interests of their clients–not in their own self-interest. Whilst the doctor-patient relationship has not definitively been recognised by Australian courts as a fiduciary relationship, the medical professional itself acknowledges that ‘trust is the foundation of a good doctor-patient relationship’. Furthermore, elements of the doctor-patient relationship are fiduciary in nature. For example, the duties to maintain confidentiality and to not exert undue influence.
- Legal advice and disputes, and medical advice and treatment, can at times, be costly, unpredictable, lengthy and stressful experiences for the consumer, who may be at a disadvantage in terms of their legal or health literacy, and heavily reliant on the professional advising them.
Over time, both the legal profession and regulators of the profession, have developed regulatory responses to address issues of trust, consumer confidence, vulnerability, and to restrain the abuses or excesses of the profession – not least of all in relation to costs. All lawyers in Australia are subject to detailed costs obligations under relevant state or territory legislation, and in legal profession rules. These include:
- A requirement that legal costs be fair, reasonable and proportionate in all the circumstances (having regard to a range of factors including the practitioner’s level of skill and expertise, the complexity and urgency of the matter);
- A prohibition on practitioners acting in a way that unnecessarily results in increased costs to the client;
- Disclosure in writing as to the nature, terms, and a genuine estimate of the total costs where the costs are likely to be above a certain amount as well as information about the client’s consumer rights in relation to the bill;
- Continual disclosure of any significant changes to the original and any subsequently revised costs estimate in writing;
- A requirement that practitioners take all reasonable steps to satisfy themselves that their client understands and has given consent to the proposed course of action and proposed costs; and
- Breach of these requirements results in any costs agreement being void and the client does not have to pay the legal costs until they have been assessed or any costs dispute has been determined by the legal services regulator to whom the client can complain. Breach of these requirements may also result in disciplinary action by the regulator. 
These obligations, as well as the rights of the client are clearly explained in accessible materials published by the relevant legal profession regulators for consumers of legal services. These costs disclosure obligations give lawyers an understanding of what costs disclosure looks like in practice.
Likewise, similar costs disclosure obligations could be developed to assist doctors and patients with the informed financial consent process. These are particularly important as, unlike lawyers’ fees, which are typically billed after the work has been completed, the costs of medical services and products are often paid at the point of service.
It is important that the views of the medical profession are considered in developing costs disclosure obligations. However, to ensure patients are confident that costs discussions and informed financial consent processes are consistent across the health system, costs disclosure obligations need to be developed, maintained, promoted and overseen by an independent body.
Clearly, there would need to be reasonable limits on the type and amount of information required to be disclosed. Doctors should not be expected to provide advice or detailed information about different private health insurance providers in order to achieve informed financial consent. It is up to the consumer whether they wish to purchase private health insurance and it is up to the private health insurance provider to clearly explain their products to consumers. However, it’s not unreasonable to expect doctors to have a general understanding of typical out-of-pocket costs patients can expect, with and without private health insurance, and for this information to be given to patients, not least of all because doctors are more likely than patients to have this information readily at hand.
Guidance for practitioners should also cover how to communicate costs in the context of the added complexity and unpredictability of some medical treatments (as compared with legal services). For example, emphasising the practicability of any proposed costs disclosure rules: that is, that they do not require a definitive costs estimate upfront, rather a genuine estimate of the total cost to be initially provided and revised as necessary to reduce ‘bill shock’. This is consistent with what consumer advocates have been calling for.
Aligning informed financial consent with the process of informed consent to treatment generally (a process already embedded in clinical practice), assists doctors to have an ongoing conversation about costs, as treatment options are offered and revised. This may also have the added benefit of reducing professional conduct complaints against doctors.
Any new costs disclosure rules should also be accompanied by a public education campaign so health consumers are aware of their rights.
Improving informed financial consent, as proposed here, is not a solution to the critical issue of out-of-pocket health treatment costs—that requires systematic reform of our health system. It may however, improve rates of informed financial consent and health literacy, strengthen health consumer rights, and reduce the financial toxicity experienced by far too many. Fundamentally, patients should be able to receive information about the likely costs of health services upfront, just as they would if they were buying some other service or good. And all persons should be able to access quality health services they need without being exposed to financial hardship.
The Federal Government’s Advisory Committee on Out-of-Pocket Costs is strongly advocating improving price transparency of treatment costs as a solution to the problem of bill shock and financial stress on the premise that increased transparency will force costs down. It has been suggested by some that requiring all doctors to publish their fees on a publicly accessible website would assist patients to be better informed and compare costs before choosing their healthcare service providers. However, price transparency, while improving general access to information, may have only some limited benefits. Simply increasing the amount of information out in the ‘market’ maintains the current (and arguably disproportionate) burden of discovering costs on the patient. It also ignores the reality of the patient experience—expecting patients to seek out the costs of treatment isn’t necessarily practical, realistic or appropriate given that patients may be vulnerable, distressed and/or have low health literacy. Additionally, publishing doctors’ fees will only be useful to health consumers if they are able to make useful comparisons and understand what is good value for money. Price transparency alone, therefore, is not sufficient to enable patients to provide informed financial consent.
Given the knowledge imbalance between the patient and doctor of the healthcare system, this burden of discovering and understanding the costs implications of treatment needs to be better balanced between the patient and their treating doctors by strengthening the informed financial consent requirements of the medical profession. There is a burgeoning problem of out-of-pocket costs and it is having a negative impact on Australians. New solutions are required –introducing clear mandatory costs disclosure obligations on doctors may be one such solution.
For more information contact:
Elle Spring, Communications and Stakeholder Engagement Manager, McCabe Centre, +61 420 803 471, firstname.lastname@example.org
 See, eg, Royal Australasian College of Surgeons, Code of Conduct (2016) 1-3.
 Medical Board of Australia, Good Medical Practice: A Code of Conduct for Doctors in Australia (2014) clause 3.5.3. See also, Royal Australasian College of Surgeons, Code of Conduct (2016) 14.
 Ibid clause 8.12.5. see also, Royal Australasian College of Surgeons, Code of Conduct (2016) 14.
 Australian Medical Association, Code of Ethics 2004. Editorially Revised 2006. Revised 2016 (2016) clause 2.7.3.
 Ibid clause 2.7.1. See also, Royal Australasian College of Surgeons, Code of Conduct (2016) 14.
 See, eg, Consumers Health Forum of Australia, Out of Pocket Pain Research Report (2018); Breast Cancer Network Australia, The Financial Impact of Breast Cancer (2017).
 See, Mike Saks, ‘Defining a Profession: The Role of Knowledge and Expertise’ (2012) 2(1) Professions & Professionalism, 1-10, 2; Professions Australia, What is a Profession?
 See, eg, Professions Australia, What is a Profession?; Thomson Reuters, The Laws of Australia, (at 1 October 2015) 27 Professional Liability, ‘Moral or ethical responsibilities are among the determining characteristics of a professional person’ [27.1.30].
 Professions Australia, What is a Profession?
 Medical Board of Australia, Sexual Boundaries: Guidelines for Doctors (2011).
 Legal Profession Uniform Law Application Act 2014 (Vic) Schedule 1 – Legal Profession Uniform Law s 172; Legal Profession Uniform Law (NSW) s 172. See also, Legal Profession Act 2006 (ACT) s 288, s 300; Legal Profession Act (NT) ss 323, 344; Legal Profession Act 2007 (Qld) s 328; Legal Practitioners Act 1981 (SA) Schedule 3, cl 30; Legal Profession Act 2007 (Tas) s 312, Legal Profession Act 2008 (WA) s 288; Legal Profession Conduct Rules 2010 (WA) r 18.
 See, eg, Legal Profession Uniform Law Application Act 2014 (Vic) Schedule 1 – Legal Profession Uniform Law s 173; Legal Profession Uniform Law (NSW) s 173.
 Legal Profession Uniform Law Application Act 2014 (Vic) Schedule 1 – Legal Profession Uniform Law ss 174(1)(a), 174(2), 174(6) and Schedule 4 s 18(3); Legal Profession Uniform Law (NSW) ss 174(1)-(2), 174(6) and Schedule 4, Div 3(3). See also Legal Profession Act 2006 (ACT) ss 269, 271, 275; Legal Profession Act (NT) ss 130, 303, 305, 309 and Legal Profession Regulations (NT) r 80B; Legal Profession Act (Qld) ss 308, 310, 314; Legal Practitioners Act 1981 (SA) Schedule 3 – Costs Disclosure and Adjudication cls 10, 12, 33; Legal Profession Act 2007 (Tas) ss 291, 292, 294,295, 315; Legal Profession Act 2008 (WA) ss 260, 262,263,266.
 Legal Profession Act 2006 (ACT) s 276; Legal Profession Uniform Law (NSW) ss 174(b), s174(7)-(8); Legal Profession Act (NT) s 310; Legal Profession Act 2007 (Qld) s 315; Legal Practitioners Act 1981 (SA) Schedule 3 – Costs Disclosure and Adjudication cl 17; Legal Profession Act 2007 (Tas) s 299; Legal Profession Uniform Law Application Act 2014 (Vic) Schedule 1 – Legal Profession Uniform Law ss 174(b),174(7)-(8); Legal Profession Act 2008 (WA) s 267.
 See, eg, Legal Profession Uniform Law Application Act 2014 (Vic) Schedule 1 – Legal Profession Uniform Law s 174(3); Legal Profession Uniform Law (NSW) s 174(3). See, Legal Profession Act 2006 (ACT) s 275; Legal Profession Act (NT) s 309; Legal Profession Act 2008 (WA) s 266.
 See Legal Profession Act 2006 (ACT) s 277; Legal Profession Uniform Law (NSW) s 178; Legal Profession Act (NT) ss 311,322; Legal Profession Act 2007 (Qld) s 316; Legal Practitioners Act 1981 (SA) s 70(b) and Schedule 3 – Costs Disputes and Adjudication cl 18; Legal Profession Act 2007 (Tas) ss 311, 312; Legal Profession Uniform Law Application Act 2014 (Vic) s 178; Legal Profession Act 2008 (WA) ss 268,287,307.
 See, eg, Legal Services Board Victoria, Legal Costs – What Rights Does A Consumer Have? (2015).
 See, eg, David Currow and Sanchia Aranda, ‘Financial Toxicity in Clinical Care Today: A “Menu without Prices”’ (2016) 204(11) Medical Journal of Australia 397; Consumers Health Forum of Australia, Out of Pocket Pain Research Report (2018).
 Ministry Advisory Committee on Out-of-Pocket Costs, Parliament of Australia, Communique (12 February 2018).
 See, eg, Peter Sivey, ‘How Much?! Seeing Private Specialists Often Costs More Than You Bargained For’, The Conversation (online), 16 March 2018.