News & Trends - Medical Technology

Equitable and sustainable Prostheses List reforms the only way to ensure patient access and clinical freedom, says MTAA

Health Industry Hub | September 29, 2021 |
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MedTech News: The Prostheses List (PL) has guaranteed patient access to clinically proven medical technology in the private health system in the past 30 years. The Medical Technology Association of Australia (MTAA) has been communicating on the PL reforms with the Government while maintaining its public advocacy on the value of the PL and the results of any potential detrimental reforms.

In an interview with Health Industry Hub, Ian Burgess, CEO of MTAA, discussed the sector’s position on the two current consultations relating to the PL reforms –  Prostheses List Scope Consultation and Independent Hospital Pricing Authority’s (IHPA) Benchmark Price for Prostheses Consultation.

Measures taken to reduce the scope of the PL without transparent, permanent and guaranteed alternative funding mechanisms will threaten continued patient access and restrict clinician choice to medical technology. This would shift the cost from insurers onto private hospitals and patients leading to out-of-pocket costs for the items removed from the PL. It will also place increased pressure on the public health system and ultimately diminish the value of private health insurance.

Ian Burgess said “We do not support the Department’s assumption that market arrangements will be developed between insurers and hospitals to cover the medical devices that are being assigned for removal from the PL. A negotiation process has not been identified and Private Healthcare Australia (PHA) cannot hold any individual insurers accountable. The current offer will decimate the benefits paid for these PL items with no guaranteed long-term funding plans.”

MTAA’s modified public-private referencing model provides a sustainable funding mechanism for medical devices and aims to save private health insurers at least $750 million over four years without compromising patient access or clinical freedom.

“Be aware that the big corporate insurers are not financially distressed. The latest Australian Prudential Regulation Authority (APRA) data shows insurers bagged a net profit of $1.5 billion last financial year, almost double their 2019-20 results. Insurers are estimated to have accumulated an extra $1.4 billion because of deferred claims from the COVID-19 pandemic. To implement changes that benefit private health insurers to the detriment of the private health system, including hospitals, patients and the MedTech sector, would simply be ludicrous in the current circumstances,” added Mr Burgess.

The MTAA’s substantive proposal also ensures that the PL reforms are not catastrophic on the MedTech industry, especially SMEs that would be significantly damaged by negative reforms.

“We are working collaboratively with the government and all key stakeholders including hospitals, doctors and consumer groups. Insurers need to come to the party, stop blaming everyone else and actually be part of this reform process and contribute constructively,” he added.

MTAA has also recommended other reforms to the PL to improve administrative efficiency and utilisation.

After a period following the listing of a new medical device, if its utilisation is greater than expected, MTAA proposes that a clinician-led review is conducted, and the outcome of that review determines what action is required. Notably, the Ernest & Young report which is the basis for the Department’s consultation paper on the PL scope did not include a clinician-led review in the development of its recommendations.

The PHA submission on the PL Scope Consultation highlights, amongst many other things, the disconnect between private health insurers and the real world impact of medical technology on patient outcomes. An intriguing example in the PHA submission is the assertion that ‘there is no evidence that the listing of cardiac ablation catheters has improved access, but strong evidence that consumers are paying more for these items’. According to MTAA’s submission, when this device was added to the PL, the patient group, Hearts4heart, noted that ‘Until now, the refusal of many health funds to cover the full expense of catheter ablation…saw thousands of patients join blown-out public waiting lists, a delay which often precluded them from treatment during the narrow window of time associated with highest rates of success’.

With regards to the Benchmark Price for Prostheses Consultation, MTAA endorses IHPA’s adoption of a weighted average price methodology to determine the public price point for medical devices on the PL. This methodology will refrain from referencing the lowest possible price in the public system as this will not reflect a true supply price point and would result in enormous reductions in the corresponding health benefits. Additionally, there is a private adjustment factor demonstrating the differences in pricing between the private and public sectors. The public system is a tender driven and procurement-based system with volume price trade-offs, whereas the private system is predicated on choice and patient access to medical technology and related technical services.

MTAA has been working with both members and non-members, and KPMG on the process of PL data collection to submit to IHPA by the end of October.

“The sponsor supplied data provides the most comprehensive, robust and easy to access data source for IHPA’s weighted average price analysis. There are complexities around using the state data, including commercial in confidence obligations that are within contractual arrangements between companies and individual state jurisdictions. We are looking to work collaboratively on the data collection process and finalisation of the recommendations after this consultation,” Mr Burgess stated.

The PL reforms will be implemented by the Department over a number of years, commencing 1 February 2022. The reforms are expected to be implemented by 2025 and a review to be conducted in 2024.

Considering its significance and impact across multiple stakeholders in the healthcare sector, achieving equitable PL reforms is imperative in maintaining patient access, clinical freedom and a thriving MedTech sector.

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