Australians need more than just prostheses cuts

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Prostheses list reforms announced today may mean a slight reduction in the rate of premium increases, but will do little to address Australians’ dissatisfaction with their health insurance policies, according to the Australian Private Hospitals Association (APHA).

The Turnbull Government announced cuts to the prostheses list for four categories of devices with a view to lowering the cost of health insurance premiums in February 2017.

APHA CEO Mr Michael Roff said while he was pleased Health Minister Sussan Ley had dismissed the outrageous and unsubstantiated claims that $800 million could be saved with a single, huge cut to the prostheses list, the overall issues with health insurance remain.

“Australians’ dissatisfaction with private health insurance is about more than just the cost. They want policies that offer the right level of cover and benefits they can see and understand. This work is still to be done.”

Mr Roff said the next step for the Prostheses List Advisory Committee (PLAC) is to quickly move to a program of reimbursing hospitals for the costs of maintaining inventory of medical devices.

“A compensation system which recognises and repays private hospitals for handling the devices should be the next cab off the rank for the PLAC,” he said.

The initial cut will reduce the cost of medical devices on the Prostheses List by 10 per cent for cardiac devices and intraocular lenses and 7.5 per cent for hip and knee replacements effective from 20 February 2017.

Other announcements, with a longer (but not specified) timeframe include moving towards price disclosure, reconstituting the PLAC, improving the prostheses listing process and reimbursing private hospitals for handling costs.

The Minister has now put the onus back on to private health insurers to reduce premium increases in line with the cuts.

“Consumers made it clear in droves through our online survey that they don’t feel they are getting the best deal from their health funds.

“Our prostheses reforms provide private health insurers with certainty over a reduction in their costs on medical devices to the tune of half a billion dollars over the next six years.

“We have taken action as promised and it’s now time for insurers to deliver on their promise to substantially lower premium increases for their customers next year,” Ms Ley said.

The private health insurance companies appear to agree with the Minister, and Private Healthcare Australia vowed that consumers would be the winners from the announced cuts. While the medical devices industry body argued against making decisions ahead of the PLAC process.

Consumer Health Forum CEO Leanne Wells called for broader reform to the health insurance sector.

“This is only part of the picture and we are pleased the Minister reiterated her commitment to more systemic reform via her Private Health Ministerial Advisory Committee…We have a mixed private and public health system in Australia and we need both parts to be working efficiently to ensure Australians have access to high quality health care, ” she said.

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