Senate inquiry to probe the complexity of prostheses pricing


AusBiotech is set to give evidence at this week’s Senate Inquiry into the reform of prostheses pricing, which has proven to be a complex and confusing debate on how to best address the system of pricing products on the Prostheses List for implantable medical devices used in private hospitals.

The Inquiry by the Senate Community Affairs References Committee into ‘Price regulation associated with the Prostheses List Framework’, which commences tomorrow, includes in its terms of reference: opportunities to create a more competitive basis for the purchase and reimbursement of prostheses; the cost for privately insured patients versus public hospital patients and the impact on  affordability of private health insurance in Australia; the benefits of adopting other pricing mechanisms; and a look at where costs are being generated within the supply chain, with a particular focus on cardiac, Intra Ocular Lens Systems, hips, knees, spine and trauma devices.

AusBiotech members have expressed concerns about a perceived lack of recognition of direct and indirect impacts from prostheses benefits reform on Australian innovation, research and development, manufacturing and importation in the medical technology sector.

While AusBiotech supports reform that fully considers the broader implications of modification of the Prostheses List, there is apprehension that the development of Australian research and industry in the medical technology sector will be collateral damage in pursuit of minimising cost if a well-constructed and considered reform is not achieved. The opportunities to damage Australian companies developing innovative prosthetic technologies are great if pricing framework changes are poorly considered and implemented.

AusBiotech contends that as less than 15 per cent of reimbursements paid by private health insurance are for products on the Prostheses List, indicating that any substantial cost savings via the Prostheses List will have minimal impact on the cost of private health insurance. The biggest opportunity for cost savings is in reducing red tape and redundancy across the application and evaluation processes of the Prostheses List.

In comparing process in Australia’s private and public healthcare systems or to international healthcare systems, AusBiotech will outline why these are different and the prices of prostheses in each cannot be directly compared to infer benchmarks.

More information about the Senate Inquiry can be found online.

AusBiotech’s submission to the Inquiry can also be found online.