As insurer blame game escalates, patients miss out on the promise of private health

The Age and Sydney Morning Herald’s investigation into the Prescribed List (PL) and the pricing of medical devices has drawn a forceful defence from the medtech sector, which has challenged the comparisons and conclusions underpinning the reporting.

At the centre of the debate is an international pricing analysis commissioned by Private Healthcare Australia (PHA), the peak body representing private health insurers. This is a distinction that warrants scrutiny when assessing both the findings and the potential for bias.

Australians with private health insurance pay for what they reasonably expect to be premium access to care and medical technology. But increasingly, clinicians are questioning whether the private health system is delivering on that promise.

In a recent Health Industry Hub podcast, Dr Emily Kotschet, Electrophysiologist at the Victorian Heart Hospital, described a widening gap between the perception of private healthcare and the reality confronting clinicians and patients, arguing that insurer-imposed red tape is delaying access to innovative medical technologies.

“A lot of technology lags in the private system a year or two, which is a dramatic difference to what it used to be,” Dr Kotschet warned. “I’m left with a less efficient or different procedure to what I would have chosen. For some patients, when you need that [particular] technology for their type of heart disease, you take them publicly.”

Professor Jayme Bennetts, Director of Cardiothoracic Surgery at the Victorian Heart Hospital and Monash Health, has also highlighted the bureaucracy surrounding the PL as a barrier to timely access to new technologies.

“Often the private system is behind the public with regards to accessing new technologies because of the delays through the Prescribed List (PL) process,” explained Professor Bennetts in another Health Industry Hub podcast. “The irony is that the newer technologies are often available earlier in the public system.”

Those concerns sit uneasily alongside the broader debate over whether private insurers are paying too much for medical devices. The PL reforms have fundamentally reshaped the medical technology funding landscape. Since 2017, the medtech industry has delivered more than $3.2 billion in savings to private health insurers, while the average cost of medical devices has fallen by around 15%.

The Medical Technology Association of Australia (MTAA) has strongly contested the analysis cited in the news articles, saying the “discredited comparisons are fundamentally flawed, cherry-picked and wrong at the most basic level”. It has also challenged the accuracy of the reporting’s use of Australian Prudential Regulation Authority (APRA) data. The article claims medical device benefits increased by 3.2% in the year to March 2026. The actual APRA figures show growth of 1% over the previous 12 months, materially below the reported figure and also below the article’s cited 1.8% growth in private hospital admissions.

The sector’s central objection is that international comparisons of device prices risk creating a false equivalence between fundamentally different healthcare funding and procurement models.

“We cannot compare the price of a pacemaker in Australia’s private healthcare system, where reimbursement include technical support services for the life of the device, with a New Zealand public procurement price that does not include those services,” said MTAA in a statement. “Nor can you compare one component of a knee replacement when the appropriate comparison is the cost of the whole knee implant. Comparing only one insert is like comparing the price of one tyre when the relevant comparison is the cost of the whole car. One of the insert examples used in the article is not even sold in Australia or New Zealand.”

But the debate over device prices cannot be separated from the question of what happens to the savings once they have been extracted from the medtech supply chain.

In Australia, private health insurers return an average of 84-86 cents of every premium dollar to consumers in benefits. In New Zealand, by contrast, Southern Cross, the country’s largest health insurer accounting for 70% of the market, returns 93 cents of every premium dollar.

The disparity becomes more striking when viewed against the broader financial performance of the private health sector. In June 2026, the Australian Bureau of Statistics reported that, in the 2024–25 financial year, Australia’s 33 health insurance companies collectively generated $2.69 billion in operating profits. Over the same 12-month period, private hospitals recorded a combined loss of $756 million.

The figures have fuelled calls from the Australian Private Hospitals Association (APHA) and Catholic Health Australia (CHA) for the Federal Government to “guarantee and legislate” a minimum private health insurer benefit-payout ratio of 90 per cent.

For patients paying ever-higher premiums, the promise of private health is not cheaper procurement on a balance sheet. It is access to quality care, innovative technologies and timely treatment.

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