Medical Device Industry Signs Historic Agreement to Reduce Health Funds Premiums

The Medical Technology Association of Australia (MTAA) has signed a four-year Agreement with the Federal Government which will deliver certainty and stability to the industry and will help lower Private Health Insurance (PHI) premiums for Australians.

The Agreement, in effect from 15 October 2017 to 31 January 2022, will deliver more than $300 million in annual benefit reductions to medical devices listed on the Prostheses List. This comes on top of the $86 million annual cuts in February 2017 to the benefit level for around 2,500 devices. Over the next four years this represents a $1.5 billion saving to PHI companies.

As part of the Agreement, MTAA has secured benefits to ensure that industry innovation is recognised and invested to ensure Australians can access the very best medical devices in a timely manner.

The Agreement will provide the industry with stability after a period of sustained attack by the PHI industry. MTAA endorses the intent of the Government’s wide-ranging reforms to increase PHI value and restrict premium increases for consumers.

It is essential that insurers fully pass on to consumers the savings that this Agreement provides and the focus moves to both the value of the PHI product and the assessment of the 90 per cent of the costs to private healthcare delivery which lie outside of the price of medical technology.

Read the letter of Agreement here

MTAA CEO Ian Burgess with Minister for Health the Hon Greg Hunt MP

Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia said:

“As the Agreement states: ‘Government recognises the role of the Prostheses List in supporting the value proposition of private healthcare to Australian consumers, and how the medical technology sector contributes to this.’ The decision to sign the Agreement ends a prolonged period of uncertainty for our industry, but it does come at a price. These cuts are significant and will impact on jobs and investment in the industry, however, the MTAA membership took the view the Agreement was in the best interests of the industry and ultimately patients.

I thank the Minister for the constructive manner in which he approached negotiations and consulted openly with MTAA and the industry more broadly. The Prostheses List is a benefit to Private Health Insurance members that ensures no out of pocket costs for medical devices. It provides access to a wide range of technologies and is a key part of the Private Health Insurance value proposition.

We call on Private Health Insurers to deliver to their 13.5 million customers no more than a CPI increase next year given the scale of the savings they are receiving from this Agreement.  It’s critically important every cent of savings is directly passed through to their customers. Given the increasing levels of profitability and cash reserves of health insurers there really should be no increase in premiums.

Further, the Private Health Insurance industry should embrace an expansion of the Prostheses List and enable faster access to private market through rationalisation of the processes surrounding Health Technology Assessment. The value of insurance needs to be sustained and private patients should be given at the very least the same access to devices as patients in public hospitals.

We believe access to a full range of medical technology is the most valuable component of a Private Health Insurance policy and are committing to this Agreement on the premise it allows the industry to do what it does best – assist patients lead healthier and more productive lives."

MTAA CEO Ian Burgess speaking at the 2017 ARCS Annual Conference


Key outcomes of the Agreement include:

1. Establishing a $30 million MedTech and biotech grants program available for small to medium size enterprises (SMEs) and researchers who partner with SMEs for conducting activities that contribute to making patient’s lives better through the development of new and innovative technologies.

2. Providing patients in the private sector access to safe and effective prostheses in a timeframe closer to that of public patients e.g. by reducing duplication in assessment between the TGA and the PLAC.

3. Increasing the frequency of listing on the Prostheses List from two to three times per year. This results in faster access to technologies and ultimately increases the value of private health insurance for patients.

4. Reviewing, through the PLAC, ways of listing non-implantable medical devices to support private health insurance reimbursement for clinically effective and cost effective medical devices. Cardiac ablation catheters for atrial fibrillation is expected to be one of the first initiatives in this area.

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