This is the second Perspective in a three-part series on Informed Financial Consent. In our first piece, we discussed how out-of-pocket cancer treatment costs are causing Australians to experience financial stress and why being aware of these costs upfront is important to prevent ‘bill shock’.
In this second Perspective, the Treatment and Supportive Care Team 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.
It is well established, legally and clinically, that a health practitioner must provide a patient with information about their treatment. This duty of informed consent is part of a doctor’s general legal duty to take reasonable care when treating a person.
The duty of informed consent obliges a doctor to provide information about the risks and benefits of, and alternatives to, medical treatment. Ordinarily, this legal duty hasn’t extended to providing information about ancillary matters, including the costs of that treatment. However, in today’s environment with increasing concern about the costs of treatment and out-of-pocket expenses; the importance patients place on financial matters in medical decision-making; and the increasing prevalence of financial stress and financial shock associated with medical treatment, we suggest that disclosing the costs of medical treatment is, and should be, part of the duty of informed consent.
Informed consent and material risk
In Rogers v Whitaker , the leading Australian authority on informed consent, the High Court of Australia found that a medical practitioner has a duty to warn a patient of a material risk inherent in a proposed treatment, except in cases of emergency or in circumstances where a medical practitioner reasonably believes that disclosing a risk would prove damaging to a patient.
A risk is material if:
(1) a reasonable person, in the patient’s position, if warned of the risk, would be likely to attach significance to it;
(2) the medical practitioner is aware that the particular patient would attach significance to it; or
(3) the medical practitioner should reasonably have been aware that the particular patient would attach significance to it.
This means that a medical practitioner is not obliged to warn about all risks, rather, they must warn about risks that are significant and relevant to a particular patient. Accordingly, information about the risks of medical treatment may differ from patient to patient, depending on the circumstances. This common law duty is echoed in medical professional standards, including the Medical Board of Australia’s Good Medical Practice: A Code of Conduct for Doctors in Australia.
Financial stress is a material risk
The principle of informed consent imposes a legal duty on doctors to inform patients of the material risks of treatment, as defined by the patient, and as should be reasonably known by a medical practitioner.
Material risks are usually risks such as adverse health effects of treatment, and the side effects of treatment or medications—that is, the risk of physical harm from treatment—that patients consider significant. Yet the definition in Rogers v Whitaker does not limit ‘material risk’ to ‘material health risk’. While ‘cost of treatment’ does not fall neatly within the class of risks that have previously been recognised in informed consent, it also does not rule out impoverishing health expenditure as a material risk. Increasingly, financial distress and hardship are viewed as side effects of cancer treatment, with many reporting distress arising from the financial burden of treatment, as well as an effect on treatment decision-making, such as skipping appointments or medications to cut costs.
Existing obligations to discuss costs of treatment
Failure to disclose the costs of treatment to a patient may constitute a breach of professional standards. The Medical Board of Australia’s Code of Conduct for Doctors in Australia defines informed consent as ‘…a person’s voluntary decision about medical care that is made with knowledge and understanding of the benefits and risks involved…’
The Code of Conduct goes on:
Good medical practice involves:
- Providing information to patients in a way that they can understand before asking for their consent.
- Obtaining informed consent or other valid authority before you undertake any examination, investigation or provide treatment (except in an emergency), or before involving patients in teaching or research.
- Ensuring that your patients are informed about your fees and charges.
- When referring a patient for investigation or treatment, advising the patient that there may be additional costs, which patients may wish to clarify before proceeding.
Relevantly, the Code of Conduct does not separate informed financial consent from informed consent. This statement is reiterated in the Royal Australasian College of Surgeons’ and the Australian Medical Association’s positions on informed financial consent. Yet the CHF survey found that over a third of private patients reported no discussion at all about the possibility of significant out-of-pocket costs, suggesting that this professional responsibility to inform patients of healthcare costs is not being discharged in all cases.
Currently, the burden of discovering costs rests, for the most part, with patients. Some doctors may be reticent to discuss financial matters, perhaps not appreciating their importance or recognising this discussion as part of their role. However, expecting patients to seek out costs information in healthcare treatment isn’t always practical or ideal, especially if patients are vulnerable, distressed, or have low health literacy. Patients do not have easy access to information about costs that health practitioners do and they may be reluctant or even embarrassed to ask about costs.
Accepting that there is also a legal duty to discuss and disclose costs of treatment to patients (in addition to ethical and professional obligations) has the potential to strengthen existing expectations in relation to costs. Firstly (as with informed consent generally), the duty to provide information about costs should be the primary responsibility of the treating health practitioner, rather than the practice manager. There are a number of reasons why this is preferable, including the existing therapeutic relationship, in which information about a person’s vulnerability to financial shock is more likely to be known by their doctor, than the practice manager. A legal duty may discourage practitioners from deferring to practice managers or office staff to convey essential financial information.
Acknowledging a legal duty may be empowering for patients, to know that they have a potentially enforceable right to be made aware, in advance, of the likely costs of their treatment. In turn, this may encourage doctors to consistently and proactively discuss costs of treatment with their patients, avoiding financial stress and shock. And although much is already expected of doctors, legally requiring them to discuss costs is no more than what is expected of other professions who provide specialist services to the public.
Recognising a legal obligation to inform patients in advance of the costs of their treatment may not change the cost of the treatment itself. But it may allow some patients to shop around, to seek a second opinion, or, in some cases, challenge costs that are higher than expected.
In our next McCabe Centre Perspective in this series, we further explore the importance and meaning of informed financial consent, and a model for a legal duty for doctors to discuss and disclose costs.
For more information contact:
Elle Spring, Communications and Stakeholder Engagement Manager, McCabe Centre, +61 420 803 471, email@example.com
 Rogers v Whitaker (1992) 175 CLR 479.
 Ibid 490.
 Ibid 490.
 Medical Board of Australia, Good Medical Practice: A Code of Conduct for Doctors in Australia (2014).
 Royal Australasian College of Surgeons, Position Paper: Informed Financial Consent (2014).
 Australian Medical Association, Position Statement: Informed Financial Consent (2015).
 Consumers Health Forum of Australia, Out of Pocket Pain Research Report (2018).