'Health costs are going up and they are not going away'

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Chair of the Prostheses List Advisory Committee (PLAC), Professor Terry Campbell AM, says underlying growth in health costs are only going in one direction.

Professor Campbell, a former long-term member of the Pharmaceutical Benefits Advisory Committee, was speaking at last week's Private Healthcare Australia conference in Melbourne. He was part of a panel discussing the affordability of private health insurance.

According to Professor Campbell, who was questioned about the recent four-year $1 billion in price cuts applied to the Prostheses List (PL), the reduction is "at the edges" and "underlying health costs are going up and they are not going away."

The PL is comprised of implantable medical devices private health insurers are required to fund. The debate over pricing has coincided with a wider debate on the definition of a medical device, with PLAC conducting a review. Companies and patients argue for the inclusion of new technologies, including non-implantable devices such as catheter ablation, which would require a widening in the definition of what constitutes a medical device for the purpose of inclusion on the PL.

"It's a step change," added Professor Campbell in relation to the $1 billion in price cuts. "It's around the edges but you need to look at the big picture if you want substantive change in the cost of healthcare.

"Given the nature of technology, expanding definitions might change who pays for it, but not the total cost of healthcare."

HCF CEO, Sheena Jack, said the rise in medical fees has been a significant factor in the growth in private health insurance premiums.

"There is the volume of procedures," she said. "Also, people do not have a very good understanding of what medical procedures cost."