News eDaily05 May 2017

Australia:Minister orders review of costly medical device pricing

05 May 2017

Health Minister Greg Hunt has ordered a review of medical device pricing in the country, following an analysis of public and private hospital data which showed that health insurance funds are paying too much for the devices.

Mr Hunt said that the Independent Hospital Pricing Authority had confirmed in a new report that better value can be achieved for many of the 11,000 devices currently listed on the Prostheses List, reported

He has asked the government’s Prostheses List Advisory Committee to now commence targeted reviews of the hip, knee, cardiac and spinal devices.

A Senate Inquiry report next week is also expected to reveal health fund members are massively overpaying for the devices in a situation that is pushing up their premiums.

The government sets the price that health funds pay for medical devices and the funds have been arguing they are available at much cheaper prices in public hospitals and overseas.

Health insurers have calculated Australians using private hospitals are paying A$900 million (US$666 million) a year too much for medical devices under the outdated government pricing system.

An analysis conducted for the private health insurance industry found a pacemaker that cost A$13,520 in Australia was being sold for just A$5,840 in Japan. A hip replacement part sold in Australia for A$5,150 costs just A$1,225 in France and a cardiac stent that is priced at A$3,450 here costs just A$655 in Italy.

The analysis found the inflated medical device prices and added an average 4.5% to health fund premiums.

In 2016, the then Health Minister Sussan Ley made small cuts to device prices ahead of the April 2017 health fund premium rises.

These price reductions to around 2,400 medical devices are forecast to deliver only A$86 million a year of savings over six years to health fund members. However, health funds had wanted to see her do more.



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