Government’s Prostheses List Reforms Make PHI Affordable

15 Sep 2017Media Releases

The Government’s response to the Senate Community Affairs Reference Committee Report Pricing Regulation Associated with the Prostheses List Framework reaffirms its commitment to implement sensible reforms to make private health insurance more affordable for all Australians.

Private Healthcare Australia CEO Dr Rachel David said by endorsing the recommendations of the inquiry the Government will enable the industry to realise its commitment to deliver significant savings for consumers on PHI premiums.

“PHA particularly welcomes Government support for Recommendation 16 “The Committee recommends that the nature and cost of services associated with a medical device on the prostheses list be disclosed separately to the cost of the device.”

“Health funds are of course willing to pay for additional services when they are clinically relevant to the patient, however funds are concerned that their members are being charged more so some medical device company sales reps can attend surgical procedures to promote the device,” said Dr David.

“This seriousness of this issue was highlighted recently in the Community Affairs References Committee Inquiry into Transvaginal mesh implants and related matters. The unregulated use of reps in routine cases is at best a costly waste of money and at worse, unsafe. When additional services are clinically relevant they should be costed separately in the interests of transparency,” said Dr David.

“The report ‘Costing an arm and a leg’ commissioned by health funds in 2015 showed private patients are paying $800 million per year too much for medical devices.  Recent data released by the Federal Government from the Independent Hospitals Pricing Authority showed the dollars wasted are closer to $1 billion. Claiming the costs of sales representatives under Prostheses List benefits is a waste of members’ money and should be stopped, and benefits discounted accordingly in line with real market prices.

“Current ‘Prostheses List’ regulations have forced health funds to pay benefits for medical devices 2-5 times higher than the price charged for the same device to public patients, and in equivalent countries around the world. This has put direct upward pressure on heath fund premiums. For example, a member fund recently reported that the insertion of a cardiac defibrillator (without complication) in a private hospital setting cost $55,000 for the prostheses component while an identical procedure (without complication) in a public hospital setting cost $15,000 using the same prostheses.

“Keeping private health sustainable and premiums affordable ultimately benefits all Australians by keeping pressure off the public hospital system. Health funds have guaranteed all savings made by reducing inflated prostheses list benefits will be passed on to consumers by way of lower premiums and we urge the Government to continue the process of reform.”

Private Healthcare Australia is the peak representative body for Australia’s private health insurance industry.  PHA represents 20 Australian health funds with a combined membership of 12.9 million Australians, or 96% of the sector on membership. Promoting the value of private health insurance to consumers in the Australian economy and keeping premiums affordable for our members is the number one priority of PHA members. Dr Rachel David is available for interview.

Media contact: Jen Eddy 0439 240 755