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What’s all the fuss about the PL?

23 March 2017

In recent weeks we’ve heard a lot about the Prostheses List [PL] through a Senate Inquiry titled “Price* Regulation Associated with the Prostheses List Framework”. So what is it and why is getting it right so important in determining how Australians benefit from medical innovation.

For almost 45 years, Medtronic has been part of the fabric of Australian healthcare and throughout this time we have remained entirely focused on getting medical devices to patients who will benefit.

We believe this Inquiry represents an important opportunity to ensure that we get the right product, to the right patient, at the right time, now and for generations to come. The PL delivers simultaneous surety to patients with Private Health Insurance [PHI] and choice for clinicians, but we need to do better – we need to bring the PL into the 21st Century.

To this end the Government has undertaken a number of measures including some targeted cuts to the PL. The impacts of these cuts are still being realised, but there will be consequences to services delivered. We strongly believe that before any further adjustments, a process using existing PL structures to address remaining issues should be established. This involves expansion to include high value, high tech items that do not meet the current criteria. Rash attempts to use a blunt instrument to address any real or perceived problems will jeopardise the value of PHI.

We know that reform must:

  • Improve value to patients;
  • Encourage innovation and process improvement;
  • Ground value for patients in agreed quality and outcome measures;
  • Manage chronic disease;
  • Align concurrent Government reviews of the health system; and,
  • Be transparent and consultative.

Medtronic is focused on delivering patient outcomes, through appropriate access to medical technology. We support the desire to improve the value of PHI on the premise that improved value translates to improved patient outcomes and a healthier Australia. It must not strip value from PHI members, by focusing on the bottom line of insurers. If the pursuit of health reform is masqueraded as ‘dollar capture’ no one wins.

We accept and support the need for thoughtful and consultative reform and to the credit of the Government this process is underway through the newly revised Prostheses List Advisory Committee and its workstreams. We also accept that the investment in medical devices is considerable – but they do deliver significant value back to the community. Medtronic believes that for every dollar spent, appropriate access to medical technology delivers back in terms of improved patient outcomes, savings to the health system, and the community wide benefits of people actively playing their part within the community, whether through return to work or otherwise. Globally, we invest approximately 1.8BN in research and development every year to continue to make these technologies even better.

Medical technology is getting smaller, smarter and less invasive, if the PL is not reflective of this, we risk compromising the high standards we all expect from the Australian healthcare system, and the standards we set for ourselves as leaders in our industry. We haven’t even touched yet on the need to expand the PL – watch out for another blog on this.

We know what we need to do to work towards reform, but this Inquiry is also about the value that private health insurers deliver. Medical device companies and private health insurers both have commercial interests to protect and enhance.  Our hope is that in the pursuit of perceived cost savings, the patient is not forgotten and that those Australians seeking certainty in delivery of healthcare are fully supported to live well.

PHI is confusing. Access to medical technology is not.  It is critical we have a viable and affordable PHI Industry in Australia in order to continue this delicate balancing act.  There is no system in the world that provides the breadth of cover, access and choice in healthcare as equitably across the population as Australia.  The PL is an important part of that balance.  We are committed to its appropriate reform.

* Note: The title of this Review includes reference to ‘Price Regulation’, but when we talk about the PL it isn’t actually a ‘price’, it is a benefit for PHI members when they go to a hospital to receive lifesaving and/or enhancing medical devices.

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