The Australian Private Hospitals Association (APHA) has welcomed the Government’s approach to Prostheses List reform announced in the Federal Budget.
The Government said it would invest $22 million over the next four years to end pricing disparity for prosthetic products such as hip replacements.
It aims to reform the Prostheses List so prices charged for medical devices are no longer significantly more expensive in private healthcare than in the public system.
APHA CEO Michael Roff said there was broad agreement across the sector that pricing reform of prostheses was required.
“While there is still much detail to be worked through, the pathway the Government has chosen to bring public and private sector prostheses prices into line appears sensible and is consistent with the approach advocated by APHA,” Mr Roff said.
The Government said changes to the list – which has grown in size and complexity to include more than 11,600 items – will be introduced “progressively and in a staged manner” from February 2022.
“A phased approach to pricing reform will enable necessary changes to be made in a planned and managed way, allowing continued access by doctors to a full range of technologies for their patients while minimising any shocks to the system,” Mr Roff added.
He was pleased the Government rejected the radical DRG (Diagnosis Related Group) funding model.
“It would have resulted in significant cost increases for consumers, a reduction in choice of technologies and threatened the viability of many private hospitals,” Mr Roff said.
“They have listened to the sector and we look forward to engaging constructively on the reform consultations.”
APHA also welcomed the Government’s recognition of the need for an improved understanding of the effectiveness of supporting out-of-hospital care for more Australian patients.
“This study needs to look at how private hospitals have been held back from providing innovative patient-centred care, particularly in mental health and rehabilitation,” Mr Roff said.
However, he was disappointed the Budget did not address the issue of the private health insurance rebate, which has effectively been reduced from 30 percent to less than 25 percent since it was introduced in 1999 to encourage more Australians to take out cover and relieve pressure on the public system.
“There have not been any changes that will meaningfully reduce the cost of private health insurance for low-income earners, many of whom have struggled through the pandemic,” Mr Roff said.
“Low-income households face a ‘double whammy’ of increased premiums and reduced rebates because every year the value of their private health insurance rebate goes down.
“The Federal Government had an opportunity in the 2021 Budget to provide significant relief to these families and make the rebate count again, but unfortunately that has been missed.
“Not only that, but the policies have been locked in for another two years, effectively meaning the rebate’s value will be reduced further.”