Private health insurers say Albanese government should review MoU

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Private Healthcare Australia says the federal government should review its agreement with the medical device sector.

The former Coalition government negotiated the Memorandum of Understanding (MoU) with the Medical Technology Association of Australia in the lead-up to last year's federal election.

The MoU, signed on 14 March 2022, included changes to planned reforms of the Prostheses List that were announced in the 2021-22 Budget.

Documents recently released in response to a Freedom of Information request revealed health department officials suggesting to health minister Mark Butler that the Albanese government would not be bound by the MoU's inclusions.

Private Healthcare Australia commissioned Mandala to analyse the prices paid for medical devices funded through the Prostheses List.

The report, 'Australia’s surgical surcharge: How Australians are paying too much for medical devices through the prescribed list of medical devices', has analysed the prices of 46 devices in Australia compared to the UK, New Zealand, France and Germany.

"The UK pays 71 per cent of what Australia does. New Zealand pays two-thirds of what we pay, France pays less than half of what we pay, and Germany pays one-fifth of what we pay. Australia pays 70 per cent more through the PL than New Zealand for a hip replacement stem, for example, and 30 per cent more for a drug-eluting stent," said Private Healthcare Australia.

"The total cost of the PL in 2024 will be around $1.89 billion which is $967 million more than what we would pay if we had the average prices of peer countries."

CEO Dr Rachel David said, “Repeated attempts to reform medical device pricing in Australia have been thwarted by the lobbying power of a handful of big multinational medtech companies who see Australia as their most profitable market. Australians are still paying 30-100 per cent more for the exact same medical devices being used in peer countries.

“Cost of living pressure is escalating, and Australian families are struggling with 12 consecutive interest rate hikes and surging inflation. Keeping private health insurance affordable has never been more important.

“Prior to the 2022 election, the former Health Minister signed a last-minute MOU with the multinational medtech that put a surcharge of 7-20 per cent on medical devices for private patients, flying in the face of advice provided by his own Department.

"This deal cannot be taken seriously given it was agreed behind closed doors and excluded any other stakeholders, including the people that are actually paying. In light of the recent Australian National Audit Office report into the Morrison Government’s Community Health and Hospitals Program, the MOU should be immediately reviewed.”