Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

Yesterday I got up to talk to the Private Health Insurance (National Joint Replacement Register Levy) Bill 2009. I was talking about the definition of a joint replacement prosthesis as a prosthesis listed in the Private Health Insurance (Prostheses) Rules which are used for joint replacement, and the provision of a rule-making power for the rate of the National Joint Replacement Register levy.

We are not talking small issues here. Australia’s health system takes up a very significant component of Commonwealth outlays. Total spending is not far off $50 billion. This is a major part of our health system. We are talking about a major, and growing, part of our health care spend. Expenditure on hip and knee prostheses represents around 30 per cent of total expenditure by health insurers on prostheses. Insurers paid over one billion dollars in benefits for prostheses in 2007-08 out of a total $7.4 billion spent on hospital benefits in that year. This means that prostheses expenditure represents around 15 per cent of privately insured hospital benefit outlays in this nation. So it is important to keep a close eye on costs. This is an important area to keep good facts and statistics on so that we can develop new and better products that will give better care and better value to Australians.

The Private Health Insurance (National Joint Replacement Register Levy) Bill 2009 will impose a levy on joint replacement prostheses sponsors in order to fund the National Joint Replacement Register. The register collects information about joint replacement surgeries, such as hip, knee, ankle, shoulder, wrist and spinal disc replacement procedures and reports on the safety and quality of these surgeries and devices used in the surgeries, to ensure patients get the best outcomes.

I am informed that around 70,000 Australians had joint replacement surgery in the last 12 months. That is a huge number. The National Joint Replacement Register estimates that the information it has provided has improved surgical practice and changed the use of particular devices, reducing the number of unnecessary revision surgeries by 1,200 Australians per year. In addition to improved patient outcomes, the NJRR estimates that it has saved the health sector and consumers around $44.6 million—a saving of $44 million, and 1,200 Australians saved from painful, debilitating and costly revisions that second surgery often entails. That is what I would call a very good outcome for the health system and for patients.

You can see just how easily health system costs can blow out. In many countries, such as America, where health systems are in chaos and all about money, where the unfettered market is more important than good health care and good value, nobody notices these cost increases. We do. That is why so many of the world’s health care systems get out of control so quickly with regard to costs.

I am very proud to speak on this bill. It is another measure of the quality, sense and efficiency of the Australian health care system that this government promotes. It might sound a bit callous, but in a sense we are dealing with a product that is similar to a car or washing machine. It would be easy for in-built short life spans to be engineered into these products so that more products can be sold and more services provided. As happens in a number of other areas of commerce, short life cycles can be built into products. We are also saying that we can save significant costs to the system. We want better products that will last longer so that people do not have to go through the trauma of repeated hip replacements every few years. That is basically what this is all about.

This bill is also about making the people who have those commercial interests pay for research costs. It is appropriate that manufacturers and importers of medical devices used in joint replacement surgery now fund the NJRR. The new cost recovery arrangements will be similar to the funding arrangements for the United Kingdom’s National Joint Registry, which is funded through a levy on joint replacement products.

The NJRR provides invaluable post-market surveillance of joint replacement prostheses. This monitoring of the safety and quality of devices provides considerable benefit to the industry by improving consumer confidence in the safety and efficacy of joint replacement devices. Any devices showing high failure rates can be identified quickly and promptly removed from the marketplace. The data produced by the NJRR also assists the industry by informing the development of new prostheses, allowing manufacturers to draw on reliable performance information for existing products and designs.

The introduction of cost recovery arrangements will produce $5 million in budget savings over the next four years. Legislated cost recovery arrangements will ensure the independence of the NJRR as the levy will be mandatory and collected by the government on behalf of that registry. The additional costs will be automatically passed on by device sponsors to private health insurers, resulting in increased premiums because the benefits that private health insurers must pay for particular devices are set under Commonwealth legislation.

Any increase in benefits for joint replacement products will need to be negotiated between sponsors and insurers and then approved by the government through changes to the prostheses list, and that is a good thing. We are allowing the private sector to play a role in our healthcare system, but we are keeping a very close eye on it. We are making sure they provide real value. I think that is very important.

This is a very good Labor bill, a bill built on Labor tradition. We are happy to see enterprise and the private sector operating in the healthcare system, but we want value for our money and we will intervene to get it. It is about making our great Australian healthcare system even better. I commend the bill to the House.

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