Australia has always been viewed as an attractive market for implantable medical devices. This is due, in a large part, to the Australian Department of Health’s Prostheses List. The Prostheses List regulations require that Private Health Insurers must pay a specific benefit for devices included on the Prostheses List over and above any other payment made to hospitals for an episode of care. Close to 10,000 devices are included on the list and the arrangements provide certainty to hospitals, suppliers and insurers.
Like all areas of healthcare, the Prostheses List has come under significant price pressure. Private health insurers in Australia have run a concerted campaign calling for an across-the-board cut in Prostheses List Benefits of up to 45 percent. The private health insurance industry has, rightly or wrongly, laid the blame for private insurance premium rises on prostheses list prices. With an ongoing government review of private health insurance underway, it was always likely that the Prostheses List would be subject to some reform.
The Minister of Health, Sussan Ley MP announced initial reforms to the Prostheses List on October 19 following a report prepared by the Industry Working Group on Private Health Insurance Prostheses Reform. The most significant announcement was a decrease in benefits of 10 percent for cardiac devices and intraocular lenses and a decrease in benefits of 7.5 percent. Across the board decreases were not recommended. While the benefit decreases are certainly not welcome, they are a far cry from that demanded by the insurance industry and can be considered a reasonable and measured decision by the Minister
Implications for manufacturers of medical devices
- While a reduction in benefits is never good news, Australia remains a very profitable, well developed market for medical devices
- The Report recommends a revision of the criteria to be included on the Prostheses List so that innovative non-implantable devices and 3D printed devices can also be included. While this is likely to take some time, it is a welcome development.
- There is likely to be a requirement for some form of price disclosure or reference pricing in the future for suppliers. This also is likely to take some time
- There are likely to be ongoing developments in this space so manufacturers should seek expert advice on how to access the Australian medical device market.
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About Sarah Griffin
Sarah has 25 years’ experience in international health, including health policy and legislation, health economics, health insurance, medical finance and reimbursement systems and government relations. She has held senior international roles within health insurance and medical technology. She now specializes in reimbursement strategy, health economics and advocacy to governments and insurers within Australia and New Zealand.