MTAA: Latest claim on costs simply wrong

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The Medical Technology Association of Australia has described as simply wrong a claim private patients are paying $862 million more for medical devices than those in the private system.

According to Members Health, the latest data from the Independent Hospital Pricing Authority and Department of Health shows private hospitals paid $862 million more for medically implantable devices than what they would have in a public setting.

Members Health represents the 25 private health insurers that are not-for-profit and member-owned. Its funds provide private health insurance to over 1.7 million Australians.

“It is incomprehensible that private health consumers are forced to pay many times more for identical medical devices than those in the public hospital system,” said Members Health CEO Matthew Koce.

“We commend Greg Hunt for being the first Health Minister to tackle such entrenched and blatant profiteering, but the situation is far greater than initially thought.

“Minister Hunt has an exceptional record of delivering tangible outcomes in the health portfolio, chief among them being his determination to improve affordability for Australians by trying to combat inflated prices of medical devices.

“But clearly, much more needs to be done to make sure all Australians get a fair go. That $862 million is money that would contribute enormously to helping reduce private health insurance premiums for consumers."

However, according to the Medical Technology Association of Australia (MTAA), the $862 million claim is simply wrong because it is based on data from 2016-17 - before the impact of price reductions negotiated under its strategic agreement with the federal government.

The cost of medical devices has fallen significantly and in every quarter since the agreement was signed, it said. Based on data from the prudential regulator from the first three months of 2019, compared to the corresponding period in 2018, the average benefit paid for all prostheses fell by 9 per cent. The private health insurance benefit paid per device has declined by 14 per cent since early 2017.

The MTAA also highlighted that the aggregate benefits paid by private health insurers for prostheses fell by 0.3 per cent over the same period - despite a 9.5 per cent increase in the number of prostheses used.

"The Agreement signed in October 2017 will save private health insurers $1.1 billion in payments for medical devices over the next four years and directly resulted in delivering the lowest private health insurance premium increase in 18 years," said the MTAA in a statement following the recent release of data from the prudential regulator.