Senate Inquiry into the Prostheses List Framework

The Medical Technology Association of Australia (MTAA) welcomes the opportunity to make a submission to inform the Senate Committee on Community Affairs with respect to its inquiry into the Prostheses List (PL) framework. This submission clarifies existing arrangements for prostheses and addresses concerns about their impact on Private Health Insurance (PHI) affordability.

We offer suggestions to improve existing arrangements to ensure patients with PHI have timely access to a range of contemporary clinically and cost-effective technologies which have been recommended for them by their physician.

The MTAA supports PL reforms which ensure a sustainable, value-based funding mechanism for the supply of medical technology that delivers improved health outcomes and operational efficiencies to the Australian healthcare system. Reform should also support access to innovative technologies which improve patient outcomes and quality of life.

In this context, the MTAA supports reforms to refine the existing value-based mechanism to set prostheses benefit levels and the existing reference pricing system whereby prostheses with the same therapeutic value are grouped and priced similarly. It also supports the introduction of mandatory price disclosure based on the following principles:

  • Benefits set with reference to competition should be bounded to the appropriate competitive environment that is subject to the same policy settings and same economic dynamics. This excludes international benchmarking and public pricing as relevant factorsand is consistent with how the Pharmaceutical Benefits Scheme (PBS) price disclosure model operates.
  • The benefits model should foster and encourage innovation by providing economic incentives to allow Australia to be world leaders in adopting new and improved medical technologies.
  • Data sourced to investigate market competition must be derived from a credible source and commercial sensitivity must be secured in operation.
  • Benefit reviews should have an appropriate cadence and allow stakeholders/market appropriate time to adjust.
  • Physician choice of prosthesis should be maintained.
  • Costs of operating any model must be sustainable into the future and ensure equity of costs incurred.This will efficiently address Government’s desire for savings and pricing transparency whilst minimizing risks to patients and the healthcare system from reforms based on inappropriate data.

There are also other opportunities for improvement to the framework which will maximise efficiency, reduce red-tape and ensure PL benefits support contemporary models of care and advances in technology.

The MTAA considers that initiatives to achieve the above reform elements would strengthen the sustainability of the PL, improve the value of PHI to consumers and assist in generating savings in the context of Private Health Insurance (PHI).

Government has already commenced a range of activities to reform the PL framework. The MTAA has been and continues to be, a collaborative and active participant to support and inform this process.

On October 2017, the Australian Government & MTAA reached an agreement on medical device prostheses list pricingRead our media release on the outcomes of this historic agreement.

View full submission below