Inquiry call by Nick Xenophon over implant price row

Nick Xenophon will push for a Senate inquiry into price differences for medical implants.

Senator Nick Xenophon: ‘I will move for an inquiry when the Senate resumes next month into why the prices are so high compared to public hos­pitals and prices overseas’.

Independent senator Nick Xenophon will push for a Senate inquiry into price differences for medical implants such as knees, hips and pacemakers that mean privately insured ­patients pay up to five times more than public hospital patients.

Senator Xenophon said yesterday the situation had all the hallmarks of a multi-million-dollar public scandal.

“It seems that over the years, consumers with private health cover have paid upwards of $800 million a year more than they should have. Predominant amongst these are our senior ­citizens,” he said.

“I will move for an inquiry when the Senate resumes next month into why the prices are so high compared to public hos­pitals and prices overseas.”

Following revelations this week in The Australian of lobbying by private hospital chains and device makers to block Health Minister Sussan Ley’s plans to cut the fixed prices of prosthetic implants, Senator Xenophon said he wanted a ­forensic examination of the ­interaction between government decision-making and lobbyists over the issue.

He said he would seek to call lobbyists, senior health bureaucrats and stakeholders lobbying the government, including the chief executive of Ramsay Health Care, Chris Rex.

Senator Xenophon also said he was baffled that federal police had not been called to investigate revelations in The Aus­tralian on Monday that a top representative of implant ­device-makers, Susi Tegen, allegedly said during a meeting of health ­industry stakeholders and ­bureaucrats on March 29 that she had received a text message on her mobile phone alerting her that Ms Ley had a confidential cabinet proposal to cut the price of medical implants.

Senator Xenophon pointed to recent raids at the office of ­senator Stephen Conroy and some of his staffers by police ­investigating leaks around the NBN on the basis of public ­interest.

“The federal police should be called in … it baffles me that the federal police have not seen fit to investigate the leak allegedly from ERC (the expenditure review committee of federal cabinet). If these allegations are true, it may have led to consumers being gouged (on the prices of medical devices) for longer.”

Ms Tegen was the chief executive of the peak body representing device-makers the Medical Technology Association of Australia at the time. The MTAA is dominated by two giant US firms, Johnson & Johnson and Medtronic, which sell hundreds of millions of dollars’ worth of devices into the Australian market annually.

She was alleged to have held her phone up during the March 29 meeting and revealed that she had received information regarding proposals from the Health Minister to ERC. According to the allegation, she did not reveal whether the text message came directly from ERC or from another person privy to ERC discussions. Ms Tegen was lobbying hard to head off price reductions.

The MTAA announced on Monday that Ms Tegen had quit, citing poor health.

Ms Ley was subsequently rolled — or “slowed down” — over her proposal to cut the price of medical implants. Instead, the government announced in the budget that the prostheses list advisory committee would be revamped with new members and a new chair.

The new committee is to be announced within 10 days and big stakeholders in the health industry have been jockeying for representation either directly or through proxies. The long-time former chairman of the government committee, John Horvath, did not seek an extension of his term last December. He joined Ramsay Health Care, the biggest private hospital chain in the country, as a strategic adviser on December 10.

The device-makers have had the assistance of one of the best-connected lobbying firms in the country, CapitalHill Advisory, led by key NSW Liberal Party factional players Michael Photios and Nick Campbell.

Mr Campbell worked for Johnson & Johnson for 12 years and was NSW Liberal Party president from 2008 to 2010.

Mr Photios and Mr Campbell have been enmeshed in Liberal preselection battles in the past year that saw several federal MP’s preselected with their support.

Mr Campbell is understood to have managed CapitalHill’s account with the MTAA, consulting regularly with Ms Tegen, attending meetings with member chief executives and supervising CapitalHill staffers lobbying bureaucrats and ministerial staffers over medical devices.

Senator Xenophon has a history with Senate inquiries into the health system. In 2011, he campaigned for a Senate inquiry after revelations that DePuy ASR hip replacements had a high failure rate with side-effects. DePuy was a subsidiary of Johnson & Johnson. Many patients had them removed after problems including cobalt and chromium leaching from the implanted devices.