Government response fuels prostheses debate

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Government's response to the completed Senate inquiry into the pricing regulation of the Prostheses List has been acknowledged by key stakeholder groups.

The response to the report's 16 recommendations contained few surprises. Government agreed or noted all recommendations with the response noting ongoing work by health minister Greg Hunt on reforms to the Prostheses List, including pricing, as one part of an overall package designed to enhance the affordability of private health insurance.

Private Healthcare Australia said the response affirmed government's commitment to reform the Prostheses List framework.

“PHA particularly welcomes Government support for Recommendation 16 'The Committee recommends that the nature and cost of services associated with a medical device on the prostheses list be disclosed separately to the cost of the device'," said CEO Dr Rachel David.

“Health funds are of course willing to pay for additional services when they are clinically relevant to the patient, however funds are concerned that their members are being charged more so some medical device company sales reps can attend surgical procedures to promote the device.”

Dr David pointed to the ongoing inquiry into 'Transvaginal mesh implants and related matters'. "The unregulated use of reps in routine cases is at best a costly waste of money and at worse, unsafe. When additional services are clinically relevant they should be costed separately in the interests of transparency,” she said.

Dr David continued, “Current ‘Prostheses List’ regulations have forced health funds to pay benefits for medical devices 2-5 times higher than the price charged for the same device to public patients, and in equivalent countries around the world. This has put direct upward pressure on heath fund premiums. For example, a member fund recently reported that the insertion of a cardiac defibrillator (without complication) in a private hospital setting cost $55,000 for the prostheses component while an identical procedure (without complication) in a public hospital setting cost $15,000 using the same prostheses.

“Keeping private health sustainable and premiums affordable ultimately benefits all Australians by keeping pressure off the public hospital system. Health funds have guaranteed all savings made by reducing inflated prostheses list benefits will be passed on to consumers by way of lower premiums and we urge the Government to continue the process of reform.”

The Medical Technology Association of Australia also acknowledged government's response to the inquiry recommendations.

The association highlighted its response to recommendation 12, in relation to data from the Independent Hospital Pricing Authority on differences in prostheses pricing between public and private hospitals, where government acknowledged “these data [IHPA] do not fully take into account differences in the type and use of prostheses in the private and public sectors.”

The IHPA recently released data purporting to show an $800 million difference between the public and private systems. However, according to a PwC analysis based on the MTAA's own data, the difference is just over $300 million.

“We welcome this report and recognise the importance of PL reform and increased transparency but it needs to be based on facts and not fiction when it comes to evidence," said MTAA CEO Ian Burgess.

“MTAA is working with Government to deliver reforms which improve patients access to the best medical devices in the private system.

“Our PwC analysis represents almost 80% of the PL expenditure and is the most comprehensive and robust data set that exist incorporating 6958 of the 10454 products on the PL. 

“PL reform will deliver PHI a one off marginal premium reduction but at what cost to the medical device industry and ultimately patients? 

“We expect that whatever the outcome of this process PHI will deliver to its members a 0% increase next year given the scale of the reductions they are seeking and its 13.5 million members need more than just a ‘trust us’,” he added.