Minister for Health and Aged Care, Greg Hunt MP, has announced that the Federal Government will reform the Prostheses List (list) to make private health insurance (PHI) simpler and more affordable.
Established in 1985, the list sets the minimum price insurers must pay hospitals for a surgically implanted prosthesis received by a private patient in a privately insured episode of hospital treatment. Examples of prostheses are replacement hips and knees, cardiac implantable electronic devices (such as pacemakers), and human tissue. In 2019-20, over 3.1 million prostheses on the list were supplied to private health insurers totalling about $2.1 billion.
The government proposed a multi-year implementation of reforms to reduce the gap between the costs of medical devices in the public and private health sectors by delivering total savings of around $900 million for consumers and the PHI system.
“Prices for medical devices vary, and recent analysis shows that they can be up to 145% higher than the cost of the same items in the public health system,” Minister Hunt said. “These reforms will improve the affordability and value of private health insurance for Australians by keeping downward pressure on premiums while still maintaining access to high-quality medical devices.”
HCF Australia (HCF), Australia's largest not-for-profit health fund, has welcomed the Federal Government's proposed reform of the Prostheses List.
However, HCF CEO Sheena Jack claimed that the government can do more to improve affordability, including working with industry groups and medical device companies to reduce the cost of medical devices for private healthcare for members.
“While HCF is pleased with this progress, more must be done. Reducing the inflated price of medical devices is a key driver to reducing premiums that are passed on to Australian families. This is about Australian families being fairly charged for essential medical devices like cataract lens and knee and hip replacements,” Jack said. “As a not-for-profit fund representing the interests of more than 1.8 million members, we still challenge why those with private health insurance should be paying more than public patients for the same devices.
“What we want to see is price parity between the public and private system. There is still no reasonable explanation for higher prices when it's been well documented that the same devices are available in comparable countries like Canada, France, and even New Zealand at a significant fraction of the cost.”
As part of supporting the reforms' implementation, Minister Hunt sent a Memorandum of Understanding (MoU) to the Medical Technology Association of Australia (MTAA) to provide clarity about how items on the list will be costed, setting in place a process to reduce the gap between medical device costs in the public and private health sectors over three years.
