Private patients overcharged or underserved? Medtech hits back at ‘cherry-picked’ claims

The Members Health Fund Alliance (MHFA) has accused some medical device manufacturers of charging private patients up to 65% more than public hospitals. But the Medical Technology Association of Australia (MTAA) has fired back, labelling the claims published in The Australian on 13 June as “at best misleading and at worst incorrect”.

Two key issues skew the comparison. First, it relies on data from the Private Hospital Data Bureau (PHDB), which captures hospital admissions (or ‘separations’) reported by private hospitals. In contrast, data from the Australian Prudential Regulation Authority (APRA) would have offered a more accurate reflection by showing the actual benefits paid by health insurers for Prescribed List (PL) devices. Second, the pricing figures being cited are already outdated. They refer to the 2022–23 financial year – well before the most recent cuts to PL benefits came into effect.

“From July 2024, the majority of medical devices on the Prescribed List are now at a benefit level close to or below the prices in the public system. Private health insurers continue to cherry-pick outdated and incomplete data to paint an inaccurate picture of MedTech benefits,” said Ian Burgess, CEO of the MTAA.

The medtech industry argues that this debate also conveniently overlooks the additional services included in private system pricing. For cardiac implantable electronic devices (CIEDs), private sector investment include essential services like 24/7 technical support and ongoing device maintenance, services typically not covered in public pricing.

Burgess sharpened his criticism further, saying “As highlighted by Health Minister Mark Butler and health sector stakeholders, while hospitals face financial strain, insurers are recording soaring profits and funnelling more into their own management expenses than ever before.”

Since 2017, the MedTech sector claims it has delivered $3 billion in PL benefit reductions to private health insurers. But patients and hospitals have seen little of that windfall. In just the past two years, health insurers posted a record $3.9 billion in profits – up a staggering $1.4 billion from the previous period – while their management expenses exploded by over 50%, rising by $1.13 billion in the five years to 2024.

A deep dive into the Medical Devices and Human Tissue Advisory Committee (MDHTAC) papers and minutes paints an even more intriguing picture. Privately insured patients who expect faster access to care and cutting-edge medical technologies, are increasingly being met with systemic delays and blocked innovation.

MTAA’s analysis reveals a disturbing trend. In 2024, only 33% of new applications were approved in their original form. By comparison, the Medical Services Advisory Committee (MSAC) gave the green light to 39% of new applications after just one evaluation.

In addition, more than 20% of all PL applications – both new and amended – were deferred, leading to delays of four months or longer. For context, MSAC deferral rates are notably lower at 13%. These bureaucratic hold-ups are more than numbers – they’re denying patients timely access to life-changing medical technologies.

With private hospitals under pressure and public hospitals already overburdened, the system is at a breaking point. The failure to ensure timely access to innovation is a threat to the core value of private healthcare.

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