Health insurance in Australia: High cost of medical devices and procedures pushing up health premiums

Replacement knees and hips procedures and pacemakers in Australia cost three times as much as they do in Canada and Britain. Now the country’s private health insurance industry has blamed increasing health premiums on this high cost of procedures and devices.

Private Healthcare Australia head, Rachel David, asked the Turnbull government to reform the Prostheses List by the end of 2016 so that premium can be lowered from 2017. The list is used to regulate how much health funds pay for human tissues, prosthetics and device implants.

The Federal Government fixed the prices health funds pay for common medical devices in 2006. The private health industry has now called on the government to reform the pricing system. As per David, prices of medical devices are now set at very high levels compared to world standards.

The private health industry wants to work with the government on reference pricing so that the costs of benefits can be brought down to match other hospital prices Dow Under. There is pervasive concern among patients regarding the rising premiums. More than 12 million Australians have private insurance.

“That's one of the main reasons why we're urging the Government to make this change, because we will pass on any savings made by funds from prosthesis reforms into a reduction on the premium increase,” David told the ABC.

According to The Australian, on average, a heart defibrillator costs $5,315 in Britain but costs a whopping $67,795 in Australia’s private system. A knee replacement in Canada costs $7,589 but in Australia people have to shell out $23,203. In Canada, a hip replacement surgery costs $8,604, whereas in Australia, the same costs $27,432 in Australia.

“We are at world-high prices for hips and knees at the moment,’’ she said. “For an immediate fix to help keep our health system ­sustainable, Prostheses List reform is a no-brainer,” David added.