The Department of Health has released a consultation paper on proposals to reform the arrangements for how private health insurers fund medical devices.
The Prostheses List (PL) has been the focus of debate over reform for several years. The medical device sector agreed to around $1 billion in price reductions under a 2017 agreement with the federal government. However, private health insurers have continued to push for further reforms.
The 2021-22 Budget included $22 million for a four-year reform process.
According to the new consultation paper, "The Government considers these improvements are necessary to benefit consumers, because a number of reviews of the system have consistently found a high variance in the prices on the PL compared to prices paid in the public hospital system, with a limited ability for market forces to exert a downward pressure that would benefit consumers."
It said, "The PL improvements are part of a major multi-year reform to the health technology assessment (HTA) processes within the Department of Health to address capability limitations and position HTA for future needs."
The paper includes a range of options for reform, including a revised and restructured PL and potentially a new name.
There is a proposal for enhanced transparency, with companies required to disclose the actual prices paid in Australia's public health system for devices included on the PL.
There could also be a comparison of PL prices with those in comparable international markets such as Canada, France, New Zealand, Singapore, the United Kingdom, and the United States.
In addition, as part of the application process, companies could be required to declare that there will not be extra charges for the products beyond the PL price, with penalties for false declaration, to ensure no out-of-pocket expenses for consumers.
Stakeholders have until 17 September to make submissions on the consultation paper.