How do you get to $8bn from here?

14 minute read

Nine newspapers and the ABC have caused a lot of damage with that big figure, yet they won't tell us where it comes from.

The veracity of Nine newspapers’ and the ABC’s Medicare rorts series of stories over the last week rely on one massive number: so where did that $8 billion figure come from?

At no point this week did either media outlet tell anyone in any of their stories or interviews how to get to the $8bn. There was no data produced, no simple algorithms putting together any logic, not even a loose  narrative of how they might have got there.

We should have gotten to this crucial point on Thursday night when newly minted AMA president Professor Steve Robson faced off with 7.30 presenter Sarah Ferguson who asked if he had read Dr Margaret Faux’s PhD.

Professor Robson, hopelessly unprepared, said “not all of it”, and at that point doctors around the country must have breathed a collective sigh of despair as his performance significantly exacerbated the fantasy that Nine and the ABC were peddling.

If he had just read the abstract of Dr Faux’s PhD he would have noticed this immediately:

Leakage from Medicare caused by non-compliant medical billing is currently estimated at 5-15% of the scheme’s total cost ($1.2-$3.6 billion annually)

He could have asked Ferguson “did you read it?” because it feels pretty obvious she or her producers hadn’t read it if for a week they had been peddling a line that there is 30% rorting.

Even a quick flip though the pages of the PhD would have revealed a lot more that is damning of Nine and the ABC in major ways and would lead anyone to ask the questions:

  • Where did $8bn come from?
  • If it’s $8bn and Dr Faux is your witness, why doesn’t she say $8bn in her PhD that you keep referring too?
  • In the PhD it is estimated – not calculated ­– to be 5-15% and, vitally, said to be almost all leakage caused by how confusing the MBS is, not by “rorting” – which is the lead thesis of the Nine/ABC story
  • How do you reconcile “5-15%, mostly mistakes” of the thesis with the “30%, lot of rorting” as reported this week, given Dr Faux’s PhD is only six month’s old?

So did Nine newspapers and the ABC read Faux’s thesis?

Unfortunately Professor Robson came across a little like the ex-aged care minister in the Morrison government, Richard Colbeck, when he didn’t have a clue how many people had died in nursing homes from covid, i.e., not well.

Ferguson further put Professor Robson on the back foot when he, faltering, said to her that the PhD had been debunked anyway. Ferguson seized on the comment and asked Professor Robson, who had debunked it? And Professor Robson couldn’t answer the question. Good grief.

The answer he should have been prepared with is that there is nothing to debunk.

The PhD doesn’t mention 30% and the 5-15% it does allude has no calculation or logic provided. It’s a figure published out of thin air based on a PhD flush with anecdotes of bad-actor doctors, most of which come from cases the government has already caught and acted on.

The whole thing is a stitch-up.

We asked the chief reporter from Nine, Adele Ferguson, and Dr Faux directly this week to produce any sort of calculation or narrative that could get you to $8bn. It was a pretty simple question. The sort of question either of the Fergusons might have put to Dr Faux:

Where did you get the $8bn figure? In order to come up with such a significant figure I’m going to assume you [Nine] or Margaret worked off data, and have some form of algorithm which references that data. Can you please send me what that data and those algorithms are [or even a narrative] so I can understand this much better?

We have no answer from either Nine or Dr Faux despite sending the questions on Wednesday and following them up yesterday.

I’m going to suggest the very obvious reason they didn’t get back.

There is no calculation. There isn’t even a rough narrative to get you there. There is nothing in the PhD so why would there be anything outside it?

Other questions we asked which they would not answer include:

  • Did Nine ask the Department of Health to comment on the $8bn and give them any data or analysis they could use in their story? According a DoH spokesperson Nine only asked process questions about the PSR. There was no mention of the $8bn claim. With such an outrageous amount, would you not want to check it at the source before you went to press?
  • Given the opening sentence of the very first Nine paper article:

Billions of dollars are being rorted from Medicare each year by medical practitioners making mistakes or charging for services that aren’t necessary or didn’t even happen – including billing dead people and falsifying patient records to boost profits

Could they clarify what percentage of the $8bn they calculated as comprising rorting (which is knowing and intentional) and what percentage they calculated was Medicare confusion (i.e. mistakes)?

  • Were they aware they were using the example of a doctor course that was four years old and had already been widely discredited by the profession, and if so, why didn’t they make that clear?

We asked Dr Faux some supplementary questions:

  • How much of the $2m her company billed on behalf of the alleged fraudulent client her company ceased trading with constituted illegal billing, and did her company immediately identify the fraud to Medicare and pay back that part of their client bill in percentage terms that related to alleged fraud? (This part of the story makes you wonder what confidentiality clauses Dr Faux’s company has with its clients, by the way … I’m not sure I’d want to be a client if my data was going to appear on 7.30.)
  • Why does she stand by 30% in the stories this week when her own PhD published just six months ago says it’s 5-15% and how does she explain the difference?
  • If her PhD clearly states that the idea that leakage can “principally attributable to misconduct and fraud can no longer be upheld”, why is she supporting the lines of Nine and the ABC that there is widespread rorting?

The “hard evidence” that the Nine story is relying for the $8bn is that Dr Faux told them so, and she has a PhD, and that Dr Tony Webber, an ex secretary of Health and PSR director, corroborated it.

There is of course no information on how Dr Webber actually corroborated Dr Faux’s estimate or whether he even read the PhD.

Within quick time a couple of GP media outlets have laid bare how badly biased the Nine and ABC reporting has been in respect to the corroboration of the material.

The immediate past head of the PSR, Professor Julie Quinlivan is quoted in Medical Observer saying the $8bn is “fake news”.

Ex-health secretary and prominent health economist Professor Stephen Duckett told newsGP that at no point in his near 50-year career working in health administration has he seen any sign of malfeasance or carelessness occurring at such a scale.
“I’ve seen no evidence that the fraud is at that $8bn level … it would have to be endemic to get to those levels and I just don’t think it is,” he said.

How is that Nine and the ABC aren’t asking prominent and obvious other experts about the $8bn number?

We asked the Department of Health, the only ones who actually have all the Medicare data and who can, largely, identify significant fraud in the data via sophisticated data matching technology (they can’t identify it all of course … if a doctor puts down a B instead of an A consult, you can’t always catch that), and they confirmed that using the actual data you can’t get a figure of $8bn, not even remotely close. 

You might find this worrying as a general fact, but in this instance it’s possibly comforting: that the DoH, borrowing from other increasingly data-obsessed federal government departments, has a highly advanced and constantly evolving data-matching skill and technology base. And not only do they have all the Medicare data to work with, they can at times match with other departmental data to get to the patterns they need to identify fraud. We’ve written about it. It’s getting scary.

Nine and the ABC never had any data.

Worse, it’s apparent they didn’t even ask for any data or chase down the numbers with the DoH. They certainly didn’t ask the DoH for any data in relation to their $8bn claim because they didn’t reveal this allegation to them prior to the story, according to a DoH spokesperson.

Both organisations have relied on a series of one-off events of “bad actors”, guesses, anecdotes and, we guess, extrapolation by Dr Faux.  

And for some reason Dr Faux, who very clearly has made her position in the past that bad actors are not a meaningful part of her theory of up to 15% leakage, got on the Nine and ABC bandwagon and happily rolled out some dreadful (and well known) one-off examples that would catch the public’s eye.

The $8bn is at best a very bad guess, meaning the story is manifestly wrong.

But that’s not the main problem here.  

The story has been published within weeks of a federal budget, where money has never been tighter, and the situation of certain doctor groups, most particularly GPs, has never been more dire.

The ABC and Nine have driven a stake through the credibility of the medical profession weeks out from a budget where the government wants to act on starting to get the GP profession back on track somehow, and in doing so, put enormous pressure on the government not to give GPs too much.

Unfortunately the AMA has compounded the problem by allowing a very naïve and green new president to face off with probably the best interviewer in the country, Sarah Ferguson, unprepared.

What a dreadful mess.

What a disgrace on the part of the two media organisations in this country we thought we could trust with doing the right thing in terms of journalism.

The mess is going to blow straight back in the face of the public in an increasingly stressed GP sector, and a more rapidly degrading healthcare system.

Once the big number at the centre of this story is debunked then a lot of the lesser parts of the story, which don’t add up as you read, start to make a little more sense. Nine is starting with a very big claim ($8bn) which is relying on a very thin premise (the word of two alleged experts) so they are decorating it with lots of small emotional and anecdotal stuff (much of it outdated or wrong) to give it colour to help make the idea fly.

Here’s a few examples of that:

  • The original Nine paper article quotes an education provider and course by that provider in which it is alleged this provider was teaching GPs how to rort the system. That course was severely criticised by both the profession and the media at the time to the point where the course was abruptly stopped. The course was last held nearly nearly four years ago and it has never resurfaced. In other words, the profession had self-regulated already. Why would the ABC and Nine not make that point? Instead if you’re the public you read that the course is an accepted and ongoing practice of doctors. It’s just rubbish.  
  • The article quotes cases of bad actor doctors that are alarming but which have already been identified by the government and acted on. There is no data provided anywhere to suggest that the sort of alarming behaviour quoted is widespread. That you will get bad actors in any professional community to a limited degree is a well understood piece of data but somehow Nine, without any data suggested up to a third of the medical community were being bad actors. The real number is between 1-3% for doctors, which is within the norm of all professions. This is all easy data to access publicly.
  • The article, claiming corporates were systematically rorting,  quotes the case of Tweed Health, which goes back seven years. So now you have two examples being quoted in the story, one four years old and fixed and one seven years old, and for most long forgotten. Even in the Tweed Health case, the level of rorting – there was some – is all alleged. They don’t have any data again. They are telling a “good story” (and an inaccurate story) instead.
  • In Thursday’s instalment of the series in the Nine papers they reveal the name of the telehealth company they claimed to be systematically rorting the day before. It is also revealed that the company in question is a previous client of Dr Faux’s company, and that prior to cutting them off, the group had billed more than $2m through her company. This is pretty awkward because how much of that $2m was billed illegally through Faux’s company before her company realised it and cut the company off,  and when they cut them off, did Faux’s company return the money it had made from this client and did they report the company to Medicare?

The opening line of the original Nine article says quite a lot about this episode when you look back at it [our emphasis]:

Billions of dollars are being rorted from Medicare each year by medical practitioners making mistakes …

There is no definition of the term rorting which involves the concept of making a mistake. Rorting is something that is planned and intended. The opening Nine sentence is actually nonsensical. It goes to how confused Nine is at the outset about this piece.

When we asked Nine what they meant to say and how much of the $8bn they had actually calculated was a “mistake”, and how much was  a genuine “rort” (i.e. deliberate) – we feel it’s a pretty important distinction when you’re potentially imputing the reputation of one in every three doctors in the country – they wouldn’t say.

So the bad grammar and sentence construction doesn’t seem like it was just a tired subeditor.


If no one has picked up the awful irony here as far as GPs are concerned then ask yourself: what if the 30% was somehow real – say by leakage and mistakes?

So we fix that up and what happens?

Pay GPs 30% less than we pay them now?

It wouldn’t be any reason to not clean up waste, sure, but it sort of highlights the real issues we are dealing with here.

GPs are at their most stressed point in history.

They are in crisis.

If the ABC, Nine and Dr Faux are feeling proud of themselves this week then they might want to stop and think about how much their baseless and fantastical claims affected doctors on the ground out there.

The answer is a lot.

We have a lot of distressed incoming mail and some of it makes you want to cry.

There’s an understandable and visceral disbelief that they can be turned on, so viciously, so quickly, with so little evidence, after putting in how much they’ve been putting in over the past three years.

There is widespread despair and distress and this series of stories, which has resonated with the public, and is being believed by the public, has created a significant additional mental health burden on a lot GPs out there. 

It’s palpable and significant damage to our GP sector.

It’s not OK to do that based on some guesses of one person and their PhD because it makes a sensational headline.

We’ve now written to the ABC with the above material and the obvious questions.

We will get back to you on what they say.

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