The medical technology sector has raised concerns over the potential unintended consequences of Prostheses List (PL) reforms that could see “important distinctions” abolished, risking less access to the latest IOL innovations and other technology.
But private health insurers believe the changes would still leave room for manufacturers to compete and introduce features that enhance their technology, while reducing the “inflated prices” Australians pay for prostheses.
The PL – introduced and reviewed multiple times since 1985 – is the way private hospitals, insurers and device companies know what benefits are payable for listed items, with ophthalmology accounting for around 5% overall. The Australian Government has invested $22 million over four years for reforms, which it hopes will push PL benefits closer to prices paid in the public system.
A key component is ‘regrouping’ PL items to better align devices with similar intended use or health outcomes. The government said this is about restructuring the PL to “build in a clinical logic”.
External independent consultant Hereco has developed, in collaboration with panels of specialist clinicians, the proposed regrouping structure, which could see 10 ophthalmology sub-categories become seven, 25 groups reduced to 13, 19 subgroups become 13, and 51 unique suffix combinations removed, resulting in 69% fewer groupings.
Suffixes, which are currently used to identify specific product attributes in ophthalmology, include violet-blue light filters, aberration technology and pre-loaded delivery devices, among other features. Meanwhile, viscoelastic and surgical dyes – which many feared would be completely removed to be funded through agreements between hospitals and health insurers – appear set to remain on the PL.
The Department of Health told Insight it did not intend to remove items from the PL and where suffixes were concerned, they would remain included in a different structure, with no impact on out-of-pocket costs.
But Medical Technology Association of Australia (MTAA) CEO Mr Ian Burgess said distinct groupings on the PL were required for important innovations to be recognised and paid for separately to technologies that are different, older, and potentially less beneficial to patients.
“Groups and suffixes were a good way to recognise and account for those differences even if some refinement is needed. If important distinctions are abolished, then benefit levels will be reduced to the lowest common denominator, making it harder for companies to introduce and sustain innovation in the private system,” he said.
“If negative changes are made to the PL and patient access and doctor choice are not protected, this will devalue health insurance and result in increased pressures on our public health system.”
The government said consultation was being carried out with a Clinical Implementation Reference Group (CIRG), with stakeholder feedback for ophthalmic regrouping changes due mid-March.
Private Healthcare Australia (PHA) director of policy and research Mr Ben Harris said the organisation had confidence in the CIRG. He said Australians pay up to five times as much for some IOLs than in European markets, with the “supernormal” price of PL items a main contributor to rising premiums. (MTAA says rising costs are due to increased healthcare demands).
“For every dollar we are sending to a large multinational for a prosthesis is a dollar less we can provide to a hospital or doctor,” he said.
“The fundamental question is, do extra features provide benefit to the patient and are they already in the price of the device? Regrouping of items will be focused on the consumer and there will be competition for where various products can demonstrate their features are good for the consumer and are easier to use. The inflated prices we pay in Australia will provide room for companies to partake in that competition.”
The government said the CIRG would ensure there were no unforeseen clinical implications resulting from regrouping.
“Once finalised, the regrouping of the PL will undergo further review by the Independent Hospital Pricing Authority who will set the benefit for each item/group,” a spokesperson said.
“It is important to note the PL is a reimbursement mechanism and products not on the list will continue to be available in the private system. These reforms will not prevent clinicians from choosing the most clinically appropriate device for patients.”
Demands on innovation
Another part of the reforms pertains to overhauling the listing process for devices. The MTAA welcomed the proposed ‘abbreviated pathway’ as a new way “to expedite much-needed technologies to market”, which would relate to Class IIB and below devices (low to medium risk). IOLs usually fall under Class IIB, so highly similar lenses could theoretically not be subject to greater evidence levels and a faster process.
However, where there is some level of innovation, the MedTech industry is concerned about a potentially more involved health technology assessment process that would demand large data sets and complicated modelling more in line with MSAC and PBAC assessments.
SA cataract and refractive surgeon Dr Ben LaHood said Australian access to new ophthalmic products is among the best in the world. He acknowledged the PL was “massive, complex, and a burden to manage” and changes were required.
“But greater scrutiny and requirements for evidence prior to becoming available on the PL could put Australia into a similar situation as the US health system where FDA approval delays products by years and certain products simply are never approved,” he said.
“The flow on effects of this are greater than just Australian patients waiting longer for a certain product. These pipeline delays could lead industry to look elsewhere to launch products and put Australia in the ‘too hard’ basket. Costs of innovative technologies will skyrocket and smaller, innovative companies will be financially blocked from the market.”
Alcon Australia and New Zealand franchise head, surgical and country manager Ms Karen Fowler said the Australian ophthalmic community had raised concerns regarding the proposed reforms in recent months.
“I am aligned and fully support our industry partner, the MTAA’s position that the PL has ensured clinicians and patients have access to a comprehensive range of advanced and clinically effective medical devices,” Fowler said.
“Australian ophthalmic patients deserve the best care possible. The proposed PL reforms may lead to unintended consequences for ophthalmologists by limiting access to future innovation in the surgical eyecare space.”
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