Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

As Chair of the Community Affairs References Committee, I present the report on price regulation associated with the Prostheses List Framework together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I would like to commence by saying thank you to the secretariat for the enormous amount of work that they have put into this report and the report on medical complaints. We tabled our medical complaints committee report yesterday. We did not get a chance to take note, because we were very rushed. I want to make sure that they are acknowledged for the enormous amount of work that they have put in. We did two reports at once, and they have done an excellent job.

People might think, 'What were you inquiring into the price regulation associated with the Prostheses List Framework for?' People may think, 'Isn't this a fairly boring topic. Why would you want to be doing that?' In fact, this is a very important topic. There are over 10,000 devices on the Prostheses List, commonly called the PL. The problem is that we have seen an escalation in prices and the cost of prostheses. With the rising cost of private health premiums, the concern is that the prostheses are, in fact, adding a lot to those costs and contributing to the increase in private health premiums.

It is interesting to note that prostheses processes cost more in private hospitals than they do in public hospitals. Not only that, but it is an extremely complex process. The prices are set in a complex process. I have to say that, during the inquiry, there was a sort of three-way pointing about who is responsible for the increase in prices, why we cannot find out the prices and why we cannot find out how the process operates. I think it is very fair to say that there is a lack of transparency around the pricing process and the cost process. It is very clear to the committee that action needs to be taken to reduce prosthesis costs as soon as possible. In fact, that is one of our recommendations—we need to do that

We have made 16 recommendations. They go to issues around costs. They go to issues around the process. They go to the number of prostheses on the list. As I said, there are over 10,000. They go to how the benefit price is paid. At the moment, with respect to the costs between the private hospitals and the public hospitals, the hospitals can negotiate. Our recommendations go to transparency in the process. They go to the collection of data. All of these are really important issues if we are going to address this matter. They also go to advice from PLAC, which is the Prostheses List Advisory Committee, which has a very important role to play in the setting of cost benefits.

We have to be careful. It is very simple to say, 'We've got to reduce the prices of prostheses,' but we also need to make sure that, for example—as the evidence was presented to us—Australian manufacturers are not disadvantaged by that. We have some very innovative manufacturers and prosthesis device developers in Australia, so we need to make sure we are looking after those local manufacturers. To be clear, the list can only include implantable devices. But we now have technology developing where there are non-implantable devices that people are arguing should either be on the list or be included in this process as well. We also have implantable devices that dissolve. How do we address those particular issues? I am trying to paint the very complex picture of what is going on, but that should not deter taking action to address the issues that we have canvassed in our report.

As I said, we have made 16 recommendations, which I urge the government to act on. The committee recommends that the nature and cost of services associated with the medical device on the Prostheses List be disclosed separately to the cost of the device. We could not even get down to that level of information. A number of times we were told, 'We can't tell you that information, because it's commercial in-confidence,' which also makes it even harder to get to the bottom of the transparency in the process.

It also came up, as I was alluding to before, that the private health insurers point to the manufacturers, and the manufacturers point to the private hospitals. Relationships are negotiated for the bulk purchase of devices between hospitals and device manufacturers; again, we in the committee could not get to the bottom of the detail of that. But it is a very important issue, which is why we spent quite a bit of time in the report talking about transparency in pricing.

I also touched previously on the issue of data. There needs to be better data collection. The committee recommends that where the Commonwealth decides that a prostheses registry is needed, the parliament should ensure that the registry is legislated for and collection of data is made compulsory. We also recommend that the government legislate for the compulsory provision of private hospital and day surgery data to the Independent Hospital Pricing Authority, in order for the government to get the reform process in place. We also note that there is some reform process underway, but we have made the point that there is clearly need for an expansion of that reform process. As I said, we need to be taking action to reduce the cost of prostheses as soon as possible. It is very clear that can happen. It is very clear that the benefits-setting model, which is being looked at, needs to continue to be looked at. We have also recommended that the 25 per cent market share rule, which was brought up to the committee, is addressed also. I commend the report to the House.

I would also like to thank my colleagues on the committee because this is, as I said, an extremely complex issue when you are trying to come to the bottom of this list. I urge the government to have a look at this because it is a very serious issue and it is only going to get worse if we do not address it. I commend the report to the House.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

I remind senators that at 4 pm we will go to the disallowance motion and then we will come back to these documents, so let us see how far we get.

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I will be very brief. I think Senator Siewert as chair of the committee covered nearly everything that I think was of note in the committee report. I, too, want to put on record my thanks to the secretariat, who have been under great strain trying to deliver on the demands of each of the members of the committee and dealing with huge amounts of evidence. I echo Senator Siewert's comments there: we place on record our thanks for their work and their professionalism.

As Senator Siewert said, it is an exceptionally complex issue and I am not sure that I understand it any better than at the beginning, but we were able to tease out a great deal of information pointing to areas that we as a committee felt needed improvement. They relate to transparency, they relate to accountability and, of course, as the committee found, they relate to affordability and the differences in prices between public and private hospitals.

The point made by Senator Siewert that we need to bear in mind, with whatever action the government takes in response to this inquiry and its recommendations, is that we must ensure that the Australian manufacturers are not unfairly dealt with because they are smaller entities. They are not of the same size as many of the multinationals. There is a lot of innovation that takes place here in Australia, and I want to make sure that, moving forward, whatever we do in terms of a government response actually looks after those interests and ensures that we keep that innovation onshore, here in Australia. To that end, of course, the response needs to be evidence based. Any way of dealing with the high cost of implantable prostheses needs to be based on strong evidence. We cannot just have a blunt-instrument approach. We need to do it in a way that ensures we are dealing with the problems.

Across the board, though—and I again echo what Senator Siewert said—there was consensus on the report. Everyone wanted to end up at the same spot, and that was to ensure that there is fairness in pricing and that we do not unduly impact on Australian manufacturers. I, too, commend the report to the chamber. I seek leave to continue my remarks.

Leave granted; debate adjourned.