Category: Health Reform

AMA and Private Health Insurance Duke It Out

Posted on | by Team

[vc_row][vc_column][vc_column_text]This week the battle between the Australian Medical Association (AMA) and the private health insurance industry continues with revelations in the Daily Telegraph of a leaked copy of the AMA’s list of fees showing that some doctors are charging well in excess of the AMA fee.

Dr Dwayne Crombie, Managing Director of Bupa Health Insurance says patients must be given the chance to have informed financial consent.

“The number one concern we hear from our customers is the affordability of healthcare and their anger when they have an unexpected out-of-pocket cost,” he says.

“This data highlights exactly why Bupa members want transparency around gaps fees.”

“While the majority of doctors are doing the right thing, patients should know when a fee is higher than usual and be able to question why that is so.”

“Any out of pocket costs, such as doctors’ fees or hospital fees, must be known in advance.”

In response AMA President, Dr Michael Gannon says “I think those doctors charging multiples above the AMA fee need to be able to explain to patients why that is the case. I’m very comfortable with an environment where patients talk about fees before they make an appointment. The most important question is, is your surgeon a no gap provider? Is the anaesthetist they use a no gap provider? I think that very simple information should be available to patients before they make an appointment. Doctors are often uncomfortable talking about money, and they often do leave that conversation to their staff at the front desk. But we do not stand behind egregious unreasonable fee setting.”

Further, on Monday, AMA President, Dr Michael Gannon launched the AMA Private Health Insurance Report Card 2018, provides an overview of how private health insurance should work to benefit patients, and explains how proposed new arrangements will result in less choice and value for policy holders.

“The AMA Report Card provides patients and consumers with easily understood information about the private health insurance industry and how it works, which will help them make informed decisions when buying a policy,” Dr Gannon said.

“Our Report Card shows that the profits of the insurers continue to rise, the growth of policies with exclusions continues to grow, and policy holder complaints continue to rise.”

“We explain what insurance may cover, what the Medicare Benefits Schedule (MBS) covers, and what an out-of-pocket fee may be under different scenarios.”

PulseLine will be interested to see if the Government’s forthcoming private health reforms deliver the much-needed transparency for consumers and puts downwards pressure on healthcare costs.

Last year the medical device industry signed an Agreement with the Government to deliver $1.1 billion in benefit reductions for private health insurers, in exchange for various reforms that ultimately are intended to provide patients better access to life-changing and life-saving technology. However now we’ve heard claims of the real “fat in the system”, claims that certain doctors contribute to more than $1.6 billion a year in uncovered gap payments and also private patients in public hospitals costing the system $1.1 billion. Reform in healthcare is clearly a hot issue and will continue to be as we hurtle towards the next Federal election.[/vc_column_text][/vc_column][/vc_row]

Is Australia’s Healthcare System Being Americanised?

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[vc_row][vc_column][vc_column_text]In a letter dated 23 February Bupa informed doctors that from August insured patients would only qualify for gap cover if they were treated at a Bupa-contracted hospital or day-stay facility, causing the Australian Medical Association (AMA) to warn of “US-style managed care” and policyholders to leave.

Last week the AMA Federal Council passed two motions against private health insurer Bupa over plans to change to its policies and coverage.

Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, said he always supported maintaining the Medical Gap Scheme, as long as Bupa could confirm the hospital admission really was a pre-booked private admission.

“We’ve always recognised that a patient should be able to make the choice to receive a private experience in a public hospital, and in fact a public hospital may be the best setting to do so. So, we support patients and doctors and we believe that making sure any Bupa customer receives the private experience they are being billed for, is a good thing for all involved.

“When a patient is admitted to a public hospital as an emergency or acute patient and treated as a public patient, they should use Medicare to fund that treatment as it is designed to do so,” Dr Crombie said.

AMA President Dr Michael Gannon described the announcement as a big leap towards US-style managed care and he demanded a ‘please explain’.

“The fact that the change has occurred straight after a premium increase, straight after agreement was made to retain second tier rates for non-contracted facilities, and straight after an announcement by Government to work collaboratively with the sector on the issue of out-of-pocket costs, is unconscionable,” Dr Gannon said.

“The AMA will not stand by and let Bupa, or any insurer, take this big leap towards US-style managed care.

“The care that Australian patients receive will not be dictated by a big multinational with a plan for vertical integration.”

Bupa has and will continue to work to remove (or reduce) out-of-pocket costs for its customers, while at the same time tackling unnecessary waste in the system which is one of the many factors driving up private health insurance premiums.

If you’d like to watch Dr Dwayne Crombie response:

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_video link=”https://youtu.be/gANQV-ET8Ls “][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]It will be interesting to see if the Government’s forthcoming private health reforms deliver the much-needed transparency for consumers regarding the myriad of confusing private health insurance products and transparency around out of pocket costs associated with doctors services and private hospitals.[/vc_column_text][/vc_column][/vc_row]

Getting the Best Value for your Buck

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[vc_row][vc_column][vc_column_text]Oxford-based, Professor Muir Gray of the Nuffield Department of Primary Care Health Services, describes the genesis of this movement in the United Kingdom as occurring in the aftermath of the 2008 Global Financial Crisis. The fiscal constraints on healthcare spending over previous decades that had spawned evidence-based decision making, such as the Cochrane collaboration, health technology assessment and quality improvement, were no longer adequate. The pressure on the system forced a new approach to maximising the value generated from the available, and often diminishing, resources.

An example of this approach in action is the recent National Institute for Health and Care Excellence (NICE) Guidance that recommends stopping the annual cystoscopy used to monitor bladder cancer patients for disease recurrence. The rationale being that patients will return if/when they experience symptoms, and there is no evidence on a population level that annual monitoring saves lives. Many other interventions that could be reduced without adversely impacting population health have been identified as part of a Choosing Wisely campaign. This same initiative was launched locally in 2016 as Choosing Wisely Australia and is being led by Australia’s medical colleges, societies and associations.  [/vc_column_text][vc_single_image image=”1653″ img_size=”full” alignment=”center”][vc_separator][vc_column_text]Value-based healthcare can be formally defined as a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Less formally, the intent is to ‘achieve the best outcomes, do it with minimal cost and do not sacrifice quality’. The policy has now reached our national agenda with the recently published Australian Healthcare and Hospitals Association Blueprint for a post-2020 National Health Agreement titled ‘Strategies for outcomes-focused and value-based healthcare’. They advocate a whole of Government approach to primary prevention; the availability and utilisation of real-time, linked data; and most contentiously, the establishment of an independent national health authority distinct from the Commonwealth, and state and territory health departments, reporting directly to COAG, to support integration of health services at a regional level, and all within a 2-year time-frame!

In 2015, Anthony Scott, a NHMRC Principal Research Fellow based at the University of Melbourne, considered options for introducing value-based healthcare concepts into Medicare. Achieving value for money is difficult as the market for healthcare is unique: patients do not know the value of the care they receive; Governments become involved to address market failures and ensure equity of access; and resources are frequently misallocated. Scott considers best practice Medicare rebates for specialists; pay-for-performance for GPs and hospitals; re-assessing which items are included in the Medicare Benefits Scheme (MBS) and value-based payments for public and private hospitals. He concludes that re-aligning financial incentives targeted at health care providers is likely to be more effective than adjusting patient co-payments (perhaps a nod to the $7 debacle), and although changes to improve quality are possible, they will have little impact on slowing overall expenditure growth.

One primary care initiative currently being rolled out around Australia are Health Care Homes. These provide co-ordinated care for people with chronic conditions with the value-based payments different from a fee-for-service or capitated approach in which providers are paid based on the amount of healthcare services they deliver. Bundled payments are provided monthly depending upon the level of complexity of each patient’s condition (categorised by tiers).[/vc_column_text][vc_single_image image=”1657″ img_size=”full”][vc_separator][vc_column_text]The Medical Technology Association of Australia (MTAA) have organised a full-day Value-based Healthcare Summit to be held in Sydney on April 24. Value-based healthcare will be discussed in the Australian context from a variety of perspectives including the capture of real-world data to assess value; measuring Patient-Reported Outcome Measures (PROMs); the International Consortium for Health Outcomes Measurement (ICHOM) standards; and value-based healthcare in the public & private sector.[/vc_column_text][/vc_column][/vc_row]

Catheter Ablation Saves Life: Time to Act

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The industry body said calls made last year by Hearts4Heart, the peak patient group for AF that released a White Paper in Parliament House calling for an end to the political wrangling that leaves thousands of Australians languishing on public hospital waitlists for this lifechanging treatment.

Currently privately insured patients are generally not eligible for this treatment because the Prostheses List (PL) does not require reimbursement of non-implantable devices by private health insurers.

The MTAA called on the private health insurance industry to support this life saving and cost-effective treatment to be listed on the PL.

In October last year, MTAA signed a four-year Agreement with the Commonwealth that will deliver $1.1 billion in benefit reductions paid by private health insurers for medical devices. One of the key reforms in the Agreement is to review ways of listing non-implantable medical devices like catheter ablation for atrial fibrillation.

The industry believes the PL has not kept pace with advances in medical technology resulting in devices like catheter ablation not being eligible for listing because they are not permanently implanted in the body.

AF is a major public health issue affecting around 460,000 Australians, with up to 30% remaining undiagnosed. Further, it is also associated with a 5 to 7-fold increase in the risk of stroke and a 3-fold increase in the risk of heart failure.[1]

Today, AF is considered a major cause of stroke in Australia (6,000 strokes annually), heart failure and hospitalisation (more than 60,000 hospitalisations annually), with direct annual healthcare costs of approximately $1.63 billion.[2]

Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia said:

“This report supports our calls for non-implantable devices like catheter ablation being fast-tracked to the Prostheses List.

“The medical device sector has played its part in reducing healthcare costs by helping to deliver the lowest private health insurance premium increase in 17 years.

“But the current Prostheses List while successful in supporting choice and containing costs has not been updated to reflect advances in technology and models of care.

“The Prostheses List is a benefit to private health insurance members that ensures no out of pocket costs for medical devices.

“We believe access to a full range of medical technology is the most valuable component of a private health insurance policy and enables the medical device industry to do what it does best – assist patients lead healthier and more productive lives.”

[1] Ball J, Thompson DR, Ski CF et al. Estimating the current and future prevalence of atrial fibrillation in the Australian adult population. Med J Aust 2015; 202:32–35. Kirchhof P, Benussi S, Kotecha D, et al. 2016 ESC Guidelines for the management of atrial fibrillation developed in collaboration with EACTS. Eur Heart J 2016; 37: 2893–62.

[2] PricewaterhouseCoopers. Update: The economic cost of atrial fibrillation in Australia. 2017.

Private Health Premiums to Rise Another $200 in 2018

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The Agreement signed in October 2017 will save private health insurers $1.1 billion in payments for medical devices over the next four years.

The industry association said it welcomed additional powers to the Private Health Insurance Ombudsman (PHIO) to conduct audits of private health insurers. This is a result of MTAA’s calls for such audits and will ensure private health insurers meet their obligations, including passing on every dollar of the $1.1 billion in saving for medical devices.

However, these cuts are significant and will impact on jobs and investment in the medical technology industry.

Despite the premium average due to increase by 3.95% – double the inflation rate – private health insurance companies will be slugging its 13.5 million customers with an additional $200 increase on a family policy come 1 April.

MTAA said it predicted this increase back in November 2017

At a time when the private health insurance sector showed a record $1.39 billion in net profit across the industry, an increase of 11.55% from the previous year.

Surely, there is scope to pass some of that back to customers through reduced premiums, rather than seeking a $200 premium increase.

The MTAA argues that the increasing profits of private health insurers would indicate they should do some belt tightening of their own to keep premium growth at the current inflation rate of 1.9%.

Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia said:

“Today’s announcement delivers the lowest premium change in 17 years, which can be attributed to the $1.1 billion in savings from the medical device industry.

“MTAA strongly supports the need for a healthy and viable private health insurance sector in Australia.

“But we’ve always maintained that given we represent 10% of private health insurers overall costs a reduction in costs for medical technology would only ever result in a modest reduction in premium increases.

“Unfortunately, it seems the private health insurance industry is asking others to reduce their costs to fund a reduction in premium growth but are reluctant to look to their own books for savings.

“Further, the private health insurance industry should embrace an expansion of the Prostheses List and enable faster access to private market as this will benefit patients and greatly increase the value proposition to its 13.5 million customers.”

Private Health Insurance claims on Medical Device Pricing Debunked

Posted on | by pulseline

[vc_row][vc_column][vc_column_text]The analysis shows a difference between public and private pricing of medical devices of $305.7 million. The MTAA says this is considerably less than the entirely misleading fake claim of $800 million made by the taxpayer subsidised private health insurance industry.

It shows there is a total differential of 15.3% between public pricing and private pricing of medical devices.

There are many factors which influence the costs of prostheses between the two markets including:

  • In the public sector, prostheses are mostly purchased through tendering arrangements with a focus on bulk purchasing and limited prostheses that enables lower costs and lower pricing;
  • Private hospital purchasing is generally based on a single purchase at a time based on surgeon preference;
  • The level of regulatory hurdles in the private sector delays market entry which comes at a significant cost to the medical device industry given the relatively short life cycle of devices due to the high rate of incremental innovation; and
  • The level of technical manufacturer support required is significantly higher in the private market for certain products, for example for cardiac devices. In the private health services, this support is largely provided by the medical device companies while in public health services these activities are delivered by public hospitals.

The PL contributes significantly to the key value propositions of private health insurance (PHI) for consumers over the public hospital sector — choice of medical device.

The PL represents only 14% of PHI expenditure for hospital cover policies compared to hospital benefits which comprise 70% of the costs and medical service benefits which comprise 16% of these costs.

The growth in the average PL benefit has fallen by 20% in real terms since March 2007. This means patients are getting at least 20% better value from the PL than they were 10 years ago.

Meanwhile, PHI premiums have increased on average by 54.6% since 2009, with more increases to come according to PHI CEOs which will only further increase their profits.

Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia said:

“MTAA and its members recognise the importance of PL reform and increased transparency but it needs to be based on facts and not fiction when it comes to evidence.

“This analysis represents almost 80% of the PL expenditure and is the most comprehensive and robust data set that exist incorporating 6958 of the 10454 products on the PL.

“The PHI industry is the only industry in Australia that receives over $6 billion in taxpayer funded subsidies every year, and guaranteed price increases above inflation every year.

“We saw evidence to a recent Senate Committee where a major PHI player confirmed that its return on equity was 29% which is nearly double that of the banks. Yet apparently, the prostheses list is the problem?

“Patients should not have healthcare options available to them curtailed in the name of taxpayer subsidised profits.

“MTAA is working with Government to deliver reforms which improve patients access to the best medical devices in the private system.”

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MedTech Industry pleased by skilled VISA changes

Posted on | by pulseline

The Medical Technology Association of Australia (MTAA) said it was pleased with today’s announcement by Immigration Minister, Peter Dutton MP, to reinstate key medical technology (MedTech) occupations back on the temporary and permanent skilled visas list effective from 1 July 2017.

MTAA member companies employ thousands of Australian workers and strongly support a skilled visa system that compliments the Australian workforce and adds additional skills, capacity and attractiveness to invest in the Australian industry.

The MedTech sector has been identified by the Government as a growth industry, to build the Australian economy in the post-mining boom era.

However, the Australian MedTech sector is part of the larger global eco-system, with companies benefiting from drawing on highly skilled overseas workforce critical to growing the capability of the sector.

Just as Australian MedTech talent will travel overseas to build on their own experience by exposure to larger and more innovative centres, many will ultimately return to Australia.

The MTAA’s own research showed the industry in Australia employs over 19,000 high skill workers, across 500 companies, the majority of which are small to medium enterprises (SME).

Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia said:

“We’re pleased by the Minister’s decision to reinstate key MedTech occupations back on the skilled visa categories.”

“It shows the Government is listening to our industry that worked collaboratively with the entire medical technologies, biotechnologies and pharmaceuticals sector to highlight the impact the original decision would have had on our member companies.”

“We are particularly pleased by the decision to restore a pathway to permanent residency for 457 visas on the Medium and Long-term Strategic Skills List.”