Medical device funding in Australia needs to change

Medical device prices in Australia are the highest in the world. Medical devices used in hip, knee and shoulder surgeries are 30-40% more expensive here than in New Zealand, the UK or France.

The Prostheses List sets prices for more than 11,000 items, with no transparency, no market mechanisms and no consideration for the impact on Australian consumers.

Private health funds are required to pay the list price for items on the Prostheses List regardless of quality, efficacy, efficiency or safety.

Australian consumers pay more while the medical device companies pocket excessive profits.

PHA has developed a blueprint for reforming prostheses funding in Australia, which redistributes excessive profits from multinational medical device companies to Australian doctors, Australian hospitals and Australian families.

Health funds have committed to pass on any savings, as a consequence of these reforms, to consumers as a reduction in premiums.

Surgically Replacing the List – PHA Prostheses Reform Roadmap
High growth product groups on the Prostheses List


The problem

  • Medical device prices in Australia are the highest in the world.
  • The Prostheses List is prone to error and rorting, with 11,000 individual components listed.
  • Even common devices such as knee replacement parts or drug eluting stents are more than twice the price of some comparable markets.
  • Medical device cost growth is the largest factor in premium increases for Australian families with private health insurance.

The challenge

  • Shift some of the extraordinary profits from big multinational device companies to Australian consumers, Australian doctors and Australian hospitals.
  • Ensure access to medical devices, which save and improve lives.
  • Reduce rorting and increase transparency.

Our solution

  • Move to bundled payments rather than paying list prices for individual components.
  • Introduce independent pricing for the bundled payments, with competition between providers.
  • Allow hospitals to negotiate on price to get a better deal.

What will happen with our plan?

  • The Independent Hospital Pricing Authority will look at prices in the public system and overseas and set a bundle price by procedure.
  • Doctors and patients will have access to a full range of medical devices (maintaining choice).
  • There will be no co-payments.
  • Where patients have need for more expensive devices than the average, doctors will be able to access more funding through a simple declaration form.
  • Medical device costs in Australia will fall gradually – our plan still has us paying the highest prices in the world for many years to come.
  • Our plan will save about $500 million by the fourth year, shared between consumers and hospitals.
  • Health funds will not profit from any savings made from this reform.





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