Federal Budget 2021 to reduce costs of medical devices

The Morrison Government is set to outline a plan to cut the hefty costs of medical devices and push health fund premiums down in the federal budget.

Exclusive: The federal government is expected to outline plans to slash the costs of medical devices like hip replacements, stents and pacemakers in Tuesday’s budget to bring down health fund premiums.

And major reforms to mental health are also expected.

It comes as News Corp can reveal Aussies are paying up to 210 per cent more than French patients for medical devices, including those made by Australian companies.

A Members Health Fund Alliance investigation has found Australians are paying up to $4200 more for the same medical devices as patients in France.

Hip replacements were found to be 148 to 210 per cent more expensive in Australia than in France.

Pacemakers ranged from 23 to 81 per cent more expensive in Australia including Medtronic’s Azure XT DR MRI SureScan which cost $4173.54 more here.

A Medtronic spokesperson said price variations were due to “the structure and funding of healthcare models”.

Even Cochlear’s hearing implants ranged from 11 to 84 per cent more expensive in Australia, a French price list obtained by the lobby group has exposed.

“The big multinational device companies appear to see Australia’s regulatory environment as a licence to print money. We have heard that some think Australia is so profitable they call it ‘Treasure Island’,” Matthew Koce CEO of Member’s Health said.

“It is imperative for Australian consumers that the 2021 federal budget deliver further substantive reform of prostheses to help Australian households,” he said.

Health funds want the government to slash medical device prices. Picture istock.

Health funds have asked the government to set an average price for medical devices to save their members $500 million and stop premiums rising by at least one per cent per annum.

“If we paid the same price as consumers in New Zealand and South Africa, the cost would be $3-4 billion less, and less again if we lived in France or the United Kingdom,” Bupa managing director Emily Amos said.

The change is being resisted by medical device companies who argue if patients or surgeons chose a device that cost more than the average the patient might have to fund the extra cost out of their own pocket.

Medical Technology Association Australia chief Ian Burgess said health funds had profited from two excessive, above inflation premiums increases in the past six month while saving $1.1 billion on medical devices prices under previous reforms.

“With the massive after-tax profits achieved by for-profit health funds, it’s clear that it is in fact the lining of shareholder pockets with increasing dividends, rather than providing patients with access to appropriate treatment that is driving prices up,” he said.

Medical devices companies accuse health funds of profiteering. Picture supplied.

Health fund premiums have been rising for years at many times the inflation rate and Tuesday’s budget is expected to outline a process to decide how to rein in device costs.

If the price changes were to have any impact on next year’s April 1 premium rise they would have to be in place before August.

The budget is also expected to include new spending on mental health as the government responds to the Productivity Commission report which found inadequate care was costing the nation $600 million a day.

That report called for every pregnant woman, new parent and young child to undergo a mental health screen.

It proposed a new system of care co-ordinators to help people with complex mental illness navigate the health, welfare, education, employment and housing systems.

The Australian Association of Psychologists wants Medicare rebates raised to $150 per session to encourage bulk billing and for telehealth to be made permanent.