The Melbourne mother-of-three couldn't justify the high out-of-pocket hospital fees - and specialists say she's not alone in shunning the private system due to cost.

National Association of Specialist Obstetricians and Gynaecologists president Gino Pecoraro told AAP the nation was "witnessing the virtual collapse of private obstetrics".

Part of the problem was that Australia's birth rate had fallen to a record low, while the majority of women giving birth elected to use the public system because of the cost of private health cover, the Brisbane-based specialist said.

"People who are having babies are all being forced to go to the public sector, which was never designed or intended to do all of the work," he said.

"(Public hospitals) are really struggling, but it's a symptom of the disease that there hasn't been enough resourcing or planning to run obstetric services."

In 2016/17, 23.7 per cent of childbirth procedures carried out in hospitals took place in private facilities but the share has steadily fallen to 21.8 per cent in 2020/21.

Dr Pecoraro said a reboot of the entire sector was needed, with a particular focus on Medicare and private health insurance.

"The federal government hasn't had the courage or the conviction to stand up to the private health insurers and make sure that they cover pregnancy in all the policies," he said.

Dr Pecoraro said it was "cruelty and sexism" for women to face significantly higher private health insurance costs in order to be covered for pregnancy and birth.

"And Medicare isn't blameless in that either - we've had a Medicare rebate freeze for specialists for six years," he said.

Melbourne obstetrician Bronwyn Hamilton agrees.

She said the Medicare rebate barely touched the surface of running a private clinic.

"Unfortunately, if out-of-pocket costs didn't exist we would actually lose money for each patient we took on for their pregnancy and birth," Dr Hamilton said.

The Medicare rebate of $329.70 towards charges for the 'planning and management' of a pregnancy does not cover her costs, such as staffing, insurance and rent.

Dr Hamilton said many of her inner-city private colleagues were struggling for business due to the push towards the public system.

"Although we have a world-class public system with highly qualified midwives, it is now under severe strain and under-resourced," she said.

"That strain has been caused by more people being unable to afford private care even though many of them would like to."

In 2019/20, 69 per cent of private patients with insurance who gave birth vaginally without complications did not face any out-of-pocket doctors' costs, according to the federal government's Medical Costs Finder.

The remaining 31 per cent typically paid $350 in out-of-pocket fees, while 57 per cent of patients whose babies were delivered by Caesarean section faced out-of-pocket doctors' costs typically worth $420.

However the figures don't include hospital charges such as accommodation or theatre costs, which usually reached into the thousands of dollars and might not be fully covered by insurers.

Ms Crowe and husband Matty initially planned to go private but changed their minds because of the out-of-pocket costs.

"We originally increased my private (insurance) coverage to include pregnancy when we were thinking of trying for our first (child)," she said.

"Then I was told the out-of-pocket cost for the majority of doctors in my area started around $5000.

"This cost alongside the increase in our premium was significant for us. So we decided to go with the public system."

Rachel David, the CEO of private health insurance industry body Private Health Care Australia, conceded out-of-pocket costs often turned people off private maternity care but added the system was difficult to navigate due to the Medicare Benefits Scheme.

Private health insurers were often not allowed to co-fund outpatient care if a Medicare benefit was payable, she said, adding that the system as a whole was "too rigid".

"What we don't want to happen is for private obstetrics to disappear, the workforce to disappear and then have a very big load on the public hospital system and create some bottlenecks which actually impact patient care," she said.

A spokeswoman for the Department of Health said cover for pregnancy and birth was mandatory in top-tier health insurance plans, however it was a commercial decision for insurers if they included similar cover in cheaper policies.

"The benefits paid for pregnancy and birth are generally of a significant amount, which require higher levels of premiums to cover," she said, adding that these benefits reflected fees charged by doctors and hospitals over which the government had no authority.

Australian Associated Press