Putting members’ health before profit

hirmaa welcomes Senate Report

Consumers are set to benefit with a highly influential Senate Inquiry today recommending a number of important reforms to address the high cost of prostheses.

Matthew Koce, CEO of hirmaa the peak body organisation for 22 not-for-profit and member owned health funds, said the that the Senate report’s recommendations would go a long way to ending the rampant overpricing of prostheses by the large multinational medical device corporations.

“The Senate report backs up claims that consumers are being ripped off by large multi-national corporations which are exploiting government regulation by setting prices for prostheses many times higher in private health settings than that in public hospitals and overseas,” Mr Koce said.

“We are alarmed by the fact that the Inquiry confirmed that no formal process exists to review the price set for prostheses devices. This raises very serious questions about the professionalism and competency of regulators in their management of public monies and points to a complete regulatory failure by successive governments.”

“The inquiry found no justification for the existing costs set for prostheses, which locks in very high prices. We have no faith in the existing prostheses pricing model which benefits the shareholders of large profit driven prostheses corporations at the expense of Australian patients.”

“Comprehensive reform is long overdue and we support the Report’s recommendation that a proper review process be developed at the earliest opportunity”.

“We know that the big multinational corporations see prostheses as a license to print money and are taking rivers of gold out of Australia thanks to poor regulation. Delays in implementing the recommendations of the Senate Report will only hurt consumers further and therefore it is imperative that all the recommendations be implemented as an urgent priority.”

“The Senate Report draws on data from the Independent Hospital Pricing Authority which is consistent with hirmaa’s analysis of official 2014-15 data showing the difference between what consumers were forced to pay for medically implantable devices in private hospitals was around $729 million more than would have been the case if public hospital prices were applied.”

The report cites the case of an implantable cardiac defibrillator which cost $19,000 in a public setting but for which private health insurers were forced to pay $52,000.

“When adding procedures in day hospitals as well as private patients in public hospitals, the total additional cost forced upon private health consumers is projected to approach $1 billion in 2017-18.”

“Consumers could benefit by around $130 per hospital policy premium if the same prices for medical devices in public hospitals were applied in the private setting during 2014-15. With the difference expected to approach $1 billion dollars by 2017-18, premiums could be reduced by as much as $180 per hospital policy.”

The Senate Report calls for immediate action to reduce prostheses costs and to set guidelines for targeted reviews of prostheses pricing, as well as a range of measures that will increase transparency in pricing arrangements.
“hirmaa acknowledges the Federal Health Minister’s strong commitment to help fix the failed regulation of prostheses and looks forward to working with the Government in reforming existing arrangements for the benefit of consumers”.

“hirmaa member funds do not operate in the interests of shareholders. Any savings that come from reform to prostheses pricing will be passed through to the consumer” Mr Koce said.
hirmaa is the peak industry body for 22 private health insurers which are not- for-profit, member-owned and community based. In all, the hirmaa funds provide private health insurance for over one million Australians.

2017-05-12 – hirmaa welcomes Senate Report