Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to 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.

Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Private Health Insurance (National Joint Replacement Register Levy) Bill 2009. This bill creates a new act, the Private Health Insurance (National Joint Replacement Register Levy) Act 2009, for the purpose of establishing the national joint replacement register levy, for funding the National Joint Replacement Registry, the NJRR.

The NJRR was established by the Australian Orthopaedic Association in 1998. It collects data on the implantation of prosthetic joint replacement devices and reports revision rates, complications and other outcomes. The NJRR also monitors mortality rates. Its purpose is to define, improve and maintain the quality of care of patients receiving joint replacement surgery. The information collected provides an accurate measure of the success or otherwise of a procedure. This information is then used to inform surgeons, other healthcare professionals, governments, sponsors of joint replacement products and patients. The NJRR provides post-market surveillance of joint replacement prostheses, and 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 market. This is good news for recipients.

The data produced by the registry also assists the industry by informing of the development of new prostheses, allowing manufacturers to draw on reliable performance information for existing products and designs. The cost recovery arrangements contained in the bill will ensure continuing funding for the registry, while preserving the independence of the registry. As levies will be imposed under legislation and collected by the government on behalf of the registry, there will be no possibility of funding being withdrawn from the registry by medical devices sponsors. Sections 1 and 2 of the bill will commence on the day on which the act receives royal assent. Sections 3 to 9 of the bill will commence on 1 July 2009 or on the date of royal assent, whichever occurs later.

The bill will enable the costs of operating the NJRR to be recovered by means of a levy imposed on each joint replacement prostheses sponsor, on each day specified in the Private Health Insurance (National Joint Replacement Register Levy) Rules as a national joint replacement register levy day, and on each day, if any, determined by the Minister for Health and Ageing, by legislative instrument, as a supplementary national joint replacement register levy day. There can be no more than four levy days in a financial year and the minister cannot specify more than two supplementary levy days in a financial year.

A person is a joint replacement prosthesis sponsor if a joint replacement prosthesis is currently listed in the Private Health Insurance (Prostheses) Rules—commonly referred to as the Commonwealth Prostheses List—either as a result of an application made by the person under section 72-10(2) of the Private Health Insurance Act 2007 or as listed in accordance with section 12 of the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007, and the person was the sponsor of that prosthesis for the purposes of the National Health Act 1953. Sponsors will be levied according to the number of joint replacement prostheses they sponsor, and the levies will be used to fund the operation costs of the registry. The bill does provide that there may be different rates set for different kinds of joint replacement prostheses, that the rate may be set at zero and that there will be a maximum rate of $5,000.

There are a wide range of prosthetic devices used in joint replacement surgery, as we know. These correspond to a great variation in benefits for different kinds of joint replacement prostheses listed on the Commonwealth Prostheses List. Benefits for some joint replacement prosthetic devices are set at less than $50, while others receive benefits as high as $67,000 per product. The Private Health Insurance (National Joint Replacement Register Levy) Rules may specify that different kinds of joint replacement prostheses may have different levies. Given the variation in benefits for different kinds of joint replacement prostheses, a maximum rate of levy of $5,000 for a financial year is considered reasonable.

Continued social integration for aged people is an important issue for their physical and mental health and general wellbeing. Unfortunately, several factors make it difficult for the elderly to achieve that goal, namely health problems, loneliness, changes in the social network structure and, importantly, mobility. In order to successfully integrate into the community the elderly need formal and informal support  by way of family care, but they also need to consider themselves as the principal architect of their own care, wellbeing and development. It has been well demonstrated that physical mobility, particularly outside the home, favours the maintenance of activities representing for the elderly a vital condition for their social integration. A high level of activity has been shown to be positive for successful ageing, health status and everyday wellbeing. Therefore, a better description of the elderly people’s daily activity patterns, referring to either necessary or leisure activities, is important for a better understanding of how older people remain integrated in the community.

A considerable amount of research has focused on the advantages of maintaining an individual’s independence at home for as long as possible and the impact of physical mobility as a means to achieve social integration. This is a major issue, considering the fact that about 30 per cent of the overall activities of the elderly take place in the community. Mobility of the elderly is not only desirable for their social connectedness but also contributes significantly to their quality of life. To a large extent a socially integrated older person is mobile, autonomous, part of a social network and engaged in meaningful social activities. One of the most relevant instrumental activities in daily life for maintaining independence and reinforcing self-identity is the ability to either drive a car or catch public transport, which represents independence and convenience and further symbolises autonomy and freedom.

A community organisation in my home town of Gladstone, called the Gladstone Aquatic Therapy Association, helps many aged people who have had joint replacements. The Gladstone Aquatic Therapy Association was formed by a small group of volunteers in 1989 to meet community demand for water therapy following construction of a heated, enclosed purpose-built pool in the city. In 1994 the organisation became incorporated and was awarded recurrent Home and Community Care Program funding, allowing the group to greatly expand their consumer case load, appoint staff to administer the service and coordinate the volunteer program. In 2009 we now see the service accommodating between 90 and 100 frail aged and children with a disability, at any given time. Gladstone Aquatic Therapy Service provides aquatic therapy classes and water exercise to the frail aged and adults and children with a disability. The association is full of wonderful community minded people who do a fantastic job for our community of Gladstone and surrounding districts.

One of the Gladstone Aquatic Therapy Association outcomes is to foster consumer independence and health maintenance. They have personal care assistants who hold aged-care certificates and coordinate the volunteer personal care assistants. The association provide a supervised aqua program to both the elderly and people with a disability to help those people improve their mobility, confidence, lifestyle, socialisation and health. They assist the frail aged, and younger and older people with moderate to severe or profound disabilities, from Miriam Vale to the south, Ambrose to the north, Many Peaks to the west, and the towns of Boyne Island, Tannum Sands, Calliope and Gladstone, which fall in between. The association assist people with arthritis, acquired brain injury, muscular dystrophy, multiple sclerosis, paraplegia and quadriplegia, those with a profound or multiple disabilities and those who have had a stroke, hip or knee replacement or some other form of serious injury. The Gladstone Aquatic Therapy Association are to be commended for their efforts. The consumer’s health, wellbeing and independence is optimised, allowing people to live, to as great a degree as possible, independently and in the local community. I commend this bill to the House.

Mark Butler (Port Adelaide, Australian Labor Party, Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I thank members for their contributions on this bill. I particularly thank the member for Flynn for his recent comments showing the level of understanding he has of the contribution the joint replacement register program makes to his community in northern Queensland. We also thank the opposition for their support for this bill, as we understand it—though the shadow minister spent most of his speech making fairly gratuitous remarks completely unrelated to this bill, which does him no service at all. The one issue the shadow minister did address that related to this bill did so in a tangential way, and that is the issue of consultation. I understand that the Department of Health and Ageing will be discussing the implementation of this program in the bill with stakeholders.

The Private Health Insurance (National Joint Replacement Register Levy) Bill 2009 will impose a levy on the sponsors of joint replacement prostheses in order to fund the National Joint Replacement Registry. A joint replacement prosthesis is a prosthesis that is listed on the Commonwealth Prostheses List and used in joint replacement surgery. The person who made the application to have the joint replacement prosthesis included on the list will be the sponsor for the purposes of the new levy. The registry 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 procedures and of devices used in the operations.

The work of the registry is critical to improving health outcomes for many Australians, as has been outlined by the members who have contributed to this debate. The registry provides improved patient outcomes, and it is estimated that, due to reductions in the level of hip and knee revision procedures while the registry has been operating—a decade or so—the registry has saved the health sector and consumers around $44.6 million. The registry provides data indicating which devices are linked to higher revision rates, which helps orthopaedic surgeons to select better-performing prostheses.

Taxpayers have met the operating costs of the registry for over 10 years, which are now around $1.6 million a year. It is appropriate that these costs are now recovered from industry, which derives considerable benefit from the registry. The registry provides invaluable post-market surveillance of joint replacement prostheses and also assists the industry by informing the development of new prostheses. The proposed arrangement will preserve the independence of the registry. There will be no possibility of funding being withdrawn from the registry by medical devices sponsors who are not happy with its findings. The introduction of cost-recovery arrangements will also produce $5 million in budget savings over four years. Legislated cost-recovery arrangements will ensure continuing and stable funding for the critical work of the registry and ensure that it can continue to provide data to improve patient outcomes.

Sponsors will be levied according to the number of joint replacement prostheses they sponsor, and the levies will only be used to fund the operating costs of the registry. The bill provides that there may be different rates of levy for one or more kinds of joint replacement prostheses, the levy rate may be set at zero, and there will be a maximum levy rate of $5,000 per listing per year. This range of levies is appropriate, as there are a very wide range of products included in the registry, from screws and bolts that are priced at less than $50 each to specialised knee replacement systems, which can have prices of more than $67,000. The government will determine the amount of levies through rules made under the legislation following consultation with the registry and the medical devices industry.

Question agreed to.

Bill read a second time.