News & Trends - Medical Technology

MTAA outlines policy priorities in 2021-22 pre-budget submission

Health Industry Hub | February 15, 2021 |
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MedTech News: Medical Technology Association of Australia (MTAA)’s policy priorities highlighted in the pre-budget submission ahead of the 2021 Budget seek to provide overall savings, redirect existing funds or foster growth in the Australian economy.

As a priority, MTAA calls on the Federal Government to work with all private health sector stakeholders to reform and restore the sustainability of private health in Australia.

According to the MTAA submission “If private health insurers are able to make internal cost savings, either through efficiencies, or reducing high management expenses, that are reflected in a decrease in premiums, this may reverse the flow of people, particularly the young, leaving private health insurance and thus stop the so-called “death spiral” currently facing the industry.

“Some private health insurers have been quick to point the finger at medical devices and the Prostheses List (PL), calling for the PL to be scrapped and replaced with an a DRG model that would restrict patient access and surgeon choice. Whilst there are some issues with the PL that are currently being addressed, to say that reform of the PL would alleviate private health insurer’s woes would be false. Devices, via the PL, make up less than 14% of Insurers Hospital costs and less than 10% of insurers total benefits. The MedTech industry, via our Strategic Agreement with the Hon. Greg Hunt MP, is already delivering $1.1 billion in savings. As such, the Government must look beyond changes to the Prostheses List to deliver sustainability for the private health system.

“The trend towards utilising private health insurance as an investment model is fundamentally at odds with its use as a the provider of finance for healthcare.”

MTAA recommends for the Government to refer to the measurers laid out in AlphaBeta report Keeping Premiums Low: Towards a sustainable private healthcare system and the AMA’s Prescription for Private Health Insurance to ensure Australian families are not over-paying for private health insurance and private health insurance can remain sustainable into the future.

As the extension of the above, the submission addresses the imminent prostheses list (PL) reforms. The two PL reform options put forward by the Department of Health as part of the consultation process have significant drawbacks and will have negative consequences on patient access and surgeon choice of innovative medical technology, in addition to making the private hospitals less viable and private insurance less attractive.

“MTAA strongly supports retaining the current PL. Few parts of the private health insurance system have been as successful in retaining wide choice with no out-of-pocket costs. However, MTAA is proposing a version of option 2 which retains the best features of the current PL but provides reforms necessary to ensure its viability and sustainability into the future.”

MTAA’s pre-budget submission also recommends that the Government continue to explore how further utilisation of medical technology can improve the efficiencies of telehealth, and to include traditional and innovative telehealth solutions for a comprehensive and sustainable digital health platform in the future.

The submission extends on this digitisation focus by recommending that the $12 million over four years allocated to TGA’s Digital Transformation be brought forward in light of the European Union Medical Device Regulation (EU-MDR) changes and in addition to decreasing the regulatory burden and improving timely patient access to assessed technologies.

The importance of home grown medical technology research and development (R&D) was also addressed in this submission. The MTAA notes that for the past decade, gross R&D investment in Australia has declined, now currently at 1.88%, below the OECD average of 2.38%. Despite this, Australia has a history of supporting early-stage R&D which does not lead to its translation to commercialisation and export.

“Commercial growth is stalled as the process to translate research into commercialisation is not incentivised. Currently, there are no incentives for onshore commercialisation of IP, and results, in effect, to the exportation of government-funded IP at the precise time where there is opportunity for profitability, which would deliver further value to the Australian economy.”

MTAA welcomes further discussion with the Government on this point.

The full MTAA Pre-Budget Submission FY2021/22 can be accessed here.

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