In an opinion piece, Private Healthcare Australia chief executive Dr Rachel David says insurers have already returned more than $2 billion to members and by the end of this year will have fulfilled their commitment not to profit as a consequence of the pandemic
When there’s a risk of being exposed and held to account, create a diversion. That appears to be the multinational medical device company playbook, pointing the finger at Australian health funds with the unsubstantiated claim they stockpiled cash during the COVID-19 pandemic.
Health funds were one of the only sectors that immediately promised not to profit from COVID-19 in early 2020. This commitment remains unmatched by the rest of the sector. The silence was deafening from the multinational medtech firms as the costs of PPE in our hospitals soared during the pandemic.
Australian health funds have given back more than $2 billion to members in cashback, premium deferrals and social support to members. By the end of this year, they will have fulfilled their commitment not to profit as a consequence of the pandemic.
Big medtech wants to hoodwink the government and consumers into thinking ‘there’s nothing to see here’ when in fact there’s plenty to see. You don’t even have to scratch the surface to find everything from upselling, price fixing, waste and tax avoidance.
Health funds have been completely transparent throughout. We have worked with our regulators APRA, ACCC and the Department of Health since March 2020 on a transparency framework to document customer givebacks and delays in premium increases.
We would welcome any attempt by big medtech to match this level of transparency, particularly given the statements concerning executive salaries and bonuses in health insurance.
It is in the interests of health funds to put their members first. Health funds are doing everything in their power to keep a lid on health inflation to protect members and taxpayers from soaring costs.
Our members are benefiting from billions in givebacks, and they are the priority. It is therefore deeply disappointing to see big medtech and some of society’s wealthiest vested interests squabbling for a bigger piece of the pie when cost of living pressures are paramount.
The truth is that during the pandemic it was medical device claims that were the main driver of private health insurance claims costs and premium increases – up 4.3 per cent while hospital episodes decreased by 2.6 per cent, according to APRA data.
The fact that medical device claims grew out of proportion to the number of procedures performed in hospitals during the COVID pandemic is evidence the pricing of medical devices is the single largest contributor to premium increases.
Australians pay between 30-100 per cent more for generic medical devices such as knee and hip replacements, cataract lenses and stents compared with the United Kingdom, New Zealand, South Africa and France.
There is no justification for Australian consumers to be paying these outrageously inflated prices. The Grattan Institute’s Professor Stephen Duckett has described the price-setting deal for medical devices in Australia as "part Soviet era price control and part Monty Python sketch".
And there’s more, multinational medtechs are earning more than double in subsidies (about $625 million a year from the private health insurance rebate) than what they are paying in tax (about $310 million a year).
The government has promised to crack down on multinational tax avoidance and is holding a review into how the make the system fairer. Little wonder the big medtech mantra is ‘nothing to see here’.
The Morrison government didn’t have the political courage to take them on and kowtowed on the eve of the federal election signing yet another deal with the medtech lobby to protect multinational windfall profits - a deal that put a surcharge of 7-20 per cent for private patients on top of the often-inflated public prices.
Let’s hope for the sake of 14 million Australians with private health insurance and indeed all Australians who are being forced to pay inflated prices for medical devices in this country, that the new Government has the will to put people ahead of the profits of multinational firms.
Dr Rachel David