Private Health Insurers are putting pressure on the Health Minister for pricing reform for implanted medical devices.
When HBF Managing Director Rob Bransby read the prosthesis price list WA public hospitals were using, he saw red. His fund was paying sometimes three times the price for the same item. So, when the Health Minister told health insurers to go back to the drawing board earlier this year, Rob suggested to Sussan Ley premiums would drop immediately if there was action on prosthesis pricing reform.
PHA’s report, Costing an Arm and a Leg, claims that Australia pays more for implanted medical devices than other comparable countries which has led to its campaign for a reference pricing model. It says prices could fall by 45% which could see $800m in savings each year and premiums rising less rapidly.
The history of prosthetic pricing is fascinating but long and sobering. Enough to say that regulation over the past decade has driven and then entrenched heavily inflated prices in the private sector that may have made companies and individuals rich.
Specialists are the primary drivers in prostheses use. Those who work across private and public sectors should be made aware of price differences for their patients’ sake, in our view.
“The benefit level is determined by the Prosthesis List Advisory Committee (PLAC) and we want to see some deregulation so that we are paying the same price as the public system. We don’t want to send people broke but we just want a transparent and open and fair pricing regime,” said Rob Bransby.
PHA has suggested the Government could implement a PBS-style approach where manufacturers would be required to provide reference prices from other jurisdictions as part of their approval process and PLAC could be refined to work more closing with the public and private healthcare sectors to plan and implement a reference pricing model.
In late February, Minister Ley was reported by Fairfax Media to have told the medical devices industry to identify more than $500m in savings or face a blanket price cut.
A working group of devices industry representatives and government has been established.