Medibank welcomes today’s announcement by the Federal Minister for Health Sussan Ley that a Working Group will be established to review and redesign the Australian Government Prostheses List to make it fairer for private healthcare patients.
"We've been advocating for change to the Prostheses List for some time because of the unfair excessive cost it places on our members," Medibank Managing Director, George Savvides, said.
“We're glad the Government has now listened, and we look forward to meeting with the Minister soon on this important reform.”
The Prostheses List sets out minimum reimbursement levels for surgically implanted prostheses, human tissue items and other medical devices that private health insurers must pay benefits for when they are provided to a patient with appropriate health insurance cover as part of hospital treatment or hospital substitute treatment, and there is a Medicare benefit payable for the professional service.[1]
However, the prices currently set out in the List are highly inflated compared to similar health systems both domestically and overseas.
“Australians with private health insurance are being forced to pay significantly more for hip and knee replacements, for example, than other patients because of this current regulatory failure,” Mr Savvides said.
In its recent submission to the Australian Government’s Review into Private Health Insurance, Medibank recommended the introduction of a reference pricing system for prostheses, using domestic and international benchmarks, and estimated this reform could return an estimated $800 million to Australian consumers.
Currently, the prices for identical prostheses products in the public health sector in Australia can be 45 per cent lower than in the private sector.
For example, an implantable cardiac defibrillator costs Western Australia Health $19,000, while the current listed benefit on the Prostheses list is $52,000 – $33,000 more expensive.
Meanwhile, in countries such as France, Japan, New Zealand, the United States, Italy and Spain, prices are around 50 per cent lower.
In France, for example, a triplechamber pacemaker costs €4000 (approximately AUD$5,840), compared to $13,520 on the Australian Prostheses List.
“The current system benefits manufacturers and private hospitals at the expense of patients,” Mr Savvides said.
Prostheses make up 14 per cent of the costs paid by private insurers to hospitals. In FY14, the industry paid approximately $1.75 billion for prostheses items.
However, while Medibank welcomes today’s announcement, there is still a lot more to be done to deliver savings across the system and improve affordability and patient outcomes.
Medibank has recommended a number of reforms[2], including improving information-sharing for consumers and insurers, standardising simpler products and terminology, ending cost-shifting from public hospitals to privately insured consumers and improving competition and premium setting.
“Medibank is very keen to ensure better health outcomes for patients, and to keep healthcare costs as low as possible,” Mr Savvides said.
“We look forward to continuing to work with the Government on the review of the Prostheses List and to implement other reforms which will help ensure a sustainable, affordable and high-quality health system for all Australians."
[1] http://www.health.gov.au/internet/main/publishing.nsf/content/health-privatehealth-prostheseslist.htm
[2] Medibank Submission to Australian Government Review into Private Health Insurance (4 December 2015) https://www.medibank.com.au/content/about/media-centre/2015/12/medibank-unveilspla.html
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About Medibank:
Medibank is Australia’s leading private health insurer, providing private health insurance to approximately 3.9 million people through its Medibank and ahm brands. Customers can access Medibank’s products and services through more than 80 retail stores, as well as digital and telephone platforms. Medibank also provides a range of complementary healthcare services including healthcare management services for government and corporate clients, online and telephone-based health services and the distribution of travel, life and pet insurance.