Medical device pricing budget announcement

Medical device pricing budget announcement

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Statement from Teachers Health CEO, Mr Brad Joyce

We welcome the Federal Government’s budget announcement last night regarding reform of medical device pricing in Australia.

The Government is investing $22 million over four years to reduce the cost of medical devices, with the aim of improving affordability of private health insurance for Australians.

It’s a great outcome for Australian households and for Teachers Health members. As a not-for-profit health fund, we are committed to passing on any genuine savings that we are able to realise from these pricing reforms to our members.  

Australians pay some of the highest prices in the world for medical devices. A recent Members Health Fund Alliance investigation found Australians are paying up to $4,200 more for the same medical devices as patients in France.

The excessive costs health funds pay for devices such as hip replacements and pacemakers are a key driver of premium increases.

In the 2020 financial year, Teachers Health paid $66 million in benefits for medical devices, amounting to 11 per cent of the total benefits paid by the fund in that year.

Changes to medical device pricing will not affect the quality or accessibility of devices that doctors can recommend. The main impact will be on the medical device industry, namely the reduction of the exorbitant profits they’re currently making.

Health funds and peak industry bodies - Members Health Fund Alliance and Private Healthcare Australia - have been lobbying for a fairer pricing system that will positively impact health fund members.

Yesterday’s announcement is a step in the right direction, and we await further detail on what the rollout of these reforms looks like. In reality, to ensure any of these genuine savings can be factored into future price increases, we would require these measures to be implemented by August this year.