Endocrinologist Dr Kevin Lee argues there’s more than meets the eye when it comes to the cost of running a specialist practice.
The public is being told a simple story: specialist charges a fee, specialist pockets a fee.
That is not how private practice works. A private practice is not just a consulting room. It is a small business – carrying all the costs, risks, and regulatory burdens of one.
So let us reveal the true costs. Not as an excuse, but as basic arithmetic before we see a single patient.
1. Before you earn a dollar, you are ~$500,000 in the hole.
The cost of administering a full-time private specialist practice in Australia is now estimated to approach $500,000 annually, before a single dollar of personal income, superannuation, or drawings is taken.
Even part-time practices carry fixed costs approaching $400,000. Indemnity, rent, staff, accreditation, compliance, and technology add up to half a million dollars a year simply to open the doors.
That is not profit. That is the cost of existing.
2. People and premises keep rising. The rebate does not.
The two largest line items are staff wages and occupancy. A single receptionist costs $86,000 to $89,000 fully loaded. Add a practice manager, superannuation, leave, and payroll tax. Add rent at $3,000 to $15,000 a month.
None of this is indexed to Medicare. All of it is indexed to real-world inflation.
3. The invisible compliance stack.
Professional indemnity alone can reach $75,000 a year for high-risk specialties. Layer on public liability, cyber-insurance, AHPRA registration, College fees, mandatory CPD, clinical accreditation, data security, and equipment.
No patient is explicitly billed for “compliance,” but every patient’s safety depends on it being fully funded.
4. Equipment and fit-outs.
Setting up a modern practice requires $150,000 to $500,000+ in fit-out costs, plus $70,000 to $200,000 in specialised clinical hardware.
IT infrastructure, secure messaging, and dictation systems are entirely bought, maintained, and periodically replaced out.
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5. Hours of unpaid clinical work.
As the RACP highlighted in its response to Grattan, physicians spend countless hours outside formal consultations managing care without remuneration.
The after-hours calls, complex GP letters, 10 PM result reviews, unbilled MDT meetings, and chasing public beds.
If we billed for every hour worked, the hourly fee structure would look completely different. We don’t bill it. We absorb it.
6. A frozen rebate in a hyper-inflated system.
Specialist rebates were frozen for years. Since 2009, the base salary of a federal MP has risen 88%. Inflation has risen 52%. The Medicare rebate for an initial specialist consultation (Item 104) has risen just 27% – from $67.92 to $86.15.
The Parliament that sets the rebate gave itself an 88% raise, gave specialists 27%, and then publicly asks why patients face out-of-pocket gaps.
That shortfall doesn’t vanish. It lands as a gap fee on the patient, a financial loss on the practice, or unpaid labour on the physician.
Colleagues, this is the reality we need to start talking about openly.
Dr Kevin Lee is a specialist physician in endocrinology and nuclear medicine based in Brisbane.
This article was first published on Dr Lee’s LinkedIn feed. Read the original here.