Anne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | Link to this | Hansard source

Today I rise to speak on these three bills before the Senate that relate to the Prostheses List and private health insurance. This is the first step in the legislative process. These are the most comprehensive reforms to the Prostheses List that have ever been undertaken. These reforms come after more than four years of detailed work and collaboration by a number of people in the medical technology community with the former department and the former government. Stakeholders—MTAA, the Australian Medical Association, the Australian Private Hospitals Association, Catholic Health Australia and the Consumer Health Forum—have all been engaged in this years-long process to get us where we are today to ensure that this reform package both helps private health insurers remain sustainable and protects patient access and doctor choice to this very important part of our medical sector—that is, the Prostheses List. Getting these reforms right is really important. That's why I make a particular point of thanking all of those people who have been involved in getting this debate to where it is to enable the start of the legislative process.

We know that medical devices and medical technology have had a major impact across the health sector. There has been a 30 per cent decline in annual mortality rates in the last 20 years, an overall increase in life expectancy of 4.1 years, and a 56 per cent reduction in the number of hospital days per capita. This is extraordinary. These statistics are not just numbers; they actually relate to fathers, husbands, wives, children, friends and loved ones.

It's really important that we pass this legislation as the process has been undertaken in great faith. These bills present the first tranche of the legislative changes required to actually implement a coalition 2021-22 budget measure—modernising and improving the private health insurance Prostheses List. It has been hard-fought. The coalition are absolutely happy to support the process and the progression of these bills because they do do some very important things.

In saying that, whilst the importance of this legislation cannot be overstated, there are some real concerns about the fact that so much of the information that is needed to underpin the moving forward of this particular initiative is completely absent and nobody has any line of sight whatsoever. This sector has no line of sight, this Senate has no line of sight, certainly the opposition has no line of sight and, in a funny way, I'm actually quite concerned that those opposite don't have any line of sight because we have no information whatsoever. However, these three bills seek to do some reasonably sensible things. They ensure the ability to better define products that will be eligible to be on the list, they define the register levy and allow it to be implemented, and they better define the cost recovery framework that sits here.

The coalition government is really pleased to be able to stand here today and talk about these bills, because I think our track record demonstrates that we have a really, really strong record when it comes to strengthening private health insurance in this country. We believe that it is a fundamental part of Australia's health system. When we left government, private health insurance membership was at an all-time high, with more than 14 million Australians being covered. Our reforms included the 2022 premium charge, which was the lowest increase in premiums in more than 21 years and the eighth successive decline in premium charges since the last year that Labor was in government in 2013. We also increased investment in the patient rebate for private health insurance from $5.4 billion in 2012-13 to $6.9 billion in 2022-23. We also implemented the new easy-to-understand gold, silver, bronze and basics classifications for private health, standard clinical definitions and better access to mental health services which, sadly, we've seen this government start to unwind.

We know intrinsically that Labor governments are not great supporters of the private health insurance sector in this country, but I would encourage you to make sure that, when voting on these bills, we actually do support a very strong private health insurance sector because that is what makes our overall health sector so strong in Australia. We are the envy of the world because we've got the right balance between the private sector and the public sector so that we are able to offer that choice and control to Australian consumers when they are patients so that they can access the broadest range of choice in health care of just about anywhere in the world. But, as I mentioned a minute ago, the greatest problem with this legislation is the lack of transparency around the detail that sits behind it. There are certain key elements which aren't enabled by this bill and which we have no information on. Once again, we have a Labor government coming in here and rushing in legislation when they haven't actually done the work that sits behind it. The question has got to be: is this government incompetent or are they trying to hide something from Australian consumers by refusing to provide the information that would set the minds of most of us at rest, if we knew what was sitting behind this?

There are a number of key areas of great concern that I particularly want to raise here today and put on the record. First of all, the cost recovery framework regulations and rules haven't even been out for consultation yet, and yet we are seeking to put in place the mechanism for cost recovery with this legislation. Another example is the definition of a medical device. In terms of the guidelines, we need to know what will be included in future on the Prostheses List. We know that this legislation enables the process by which, going forward, many items that are currently on the Prostheses List will be removed, so we need to know what will be included in the future. As an example, an insulin pump would not necessarily be categorised as an implantable device, but obviously it's a very, very important device for those people with diabetes. So we need to know where that particular product will be going to the future.

Another area of great concern is that all, in relation to all of the items that have been removed from the Prostheses List by this streamlining—often described as 'non-implantables'—the minister has made a verbal statement that he is going to mandate the requirement for those particular items to be included in general use to enable them to continue to be part of the refunding from the private health insurers. We have a promise of inclusion, but at this stage we still do not know what that is going to look like. IHACPA, the pricing authority, is out consulting as we speak. It hasn't reported yet; it doesn't have to report until after the likely passing of this legislation today. So we don't know how that bundling is going to occur. I think we've got a reasonable idea that the Department of Health and IHACPA have a preferred model for care, for this bundling. It appears they have a preference for bundling by facility type, but we know that the sector knows that it is a much more targeted way to make sure that we have got the correct kind of refunding and cost mechanisms in place for bundling if they are done through a procedure bundling exercise instead of facility type.

The minister said he's going to mandate the requirement for the cost inclusion of these items in general use for two years. The question then is: what happens after two years? Is the expectation that we're just going to set everybody against each other while they go and fight it out as to who is going to pay for these particular items that have been removed from the Prostheses List by this particular legislative framework?

But one of the greatest concerns before us at the moment is around the time lines of the requirement for this bundling to come into effect. Industry have been categoric in saying they do not believe they will be in a position to implement these changes on 1 July 2023, which is the intention of this government. Once again, we have seen the rushing of a piece of legislation, to tick and flick something they said they were going to do, with no regard to the implications of those time frames on the people required to implement them. Most particularly, I don't think there has been any regard taken for the implications on patients, and the outcomes for patients and our overall health system, of the intention to push forward with this on 1 July.

We now know that the minister is intending to speak to the IT vendors, who are the ones who will have to put this in place sometime between now and 1 July. Surely, Minister; surely, government; surely, health department; you should have had these things worked out before you came in here and asked this parliament to vote on something with no detail whatsoever and with huge concerns being raised by the sector that these details need to be known so they can understand whether they can meet the requirements that some of this legislation is intending to mandate. We've seen it before. We saw it with the aged-care bills, and now we're seeing it here with these healthcare bills. As I said, most particularly, we want to make sure that the implementation of this time frame does not have the catastrophic impacts on patients it could potentially have if it's forced through without any regard for what happens on the ground, what happens in the hospital and what happens to the patients.

I'll be asking some of these questions because I believe the Greens are intending to take this bill into committee. There are some questions the government needs to answer here. First of all, the government needs to guarantee that, with the mechanisms we don't know about yet, the detail that sits behind this legislation that is only going to be under an instrument that can't even be disallowed—can you guarantee there will be no changes to surgeries that different hospitals are able to afford to deliver to their patients? Can you assure this chamber these changes are not going to have negative impacts on the ability for a hospital to provide a particular process or procedure as it currently is now? I will ask you a specific question—and I'd really like an answer to this, government: can you guarantee, as an example, that bariatric procedures will remain a cost-effective procedure for private hospitals to continue to provide to their patients, following the changes in terms of the implementation and the categorisation of both the cost framework and the bundling procedures? Will we just see many of the procedures that are currently being undertaken in public hospitals and private hospitals shoved into the public system because private hospitals will no longer be able to afford to provide these procedures? These are questions we need to have answered. We should have had these questions answered before we were asked to come in here and vote on this particular bill.

Despite the fact that so many people in the sector have put so much time and effort into this reform process, we stand here today with so many unanswered questions that you should have been able to answer. You should have put the work in in relation to these uncertainties that the industry and the wider private health sector continue to raise about this proposed legislation. As I said, the industry have particular concerns that the enabling legislation will proceed without the critical details that they need to know to make sure that this is in the best interests of the patients that they serve.

The legislation is currently to be undertaken between March and May. We're standing here at the beginning of March trying to push this through this place. Why are you rushing this legislation through, when you could have waited and allowed it to go through in a timely manner to ensure that no unintended consequences fall out of this rushed process? Why is it that you as a government continue to refuse to give us any oversight of the subordinate legislation that sits underneath this really important legislation? It might be all fine, but how would we know, because, once again, your idea of transparency is not to tell us anything. Your idea of consultation is to tell us what you're going to do.

I would say to those opposite: the simplest approach to enable these concerns to be allayed across the broader sector would be to delay any further debate on these bills until May or June, after your consultation process has finished and we have confirmed details around the subordinate legislation. Right now, as we're standing here today, it looks as if we are going to make sure that good governance gets put to the bottom of the list, for legislative expediency. I don't think that's a very good way for us to be managing what is an extraordinarily important part of the Australian culture, something that Australians are so very proud of, our world-class health system. Sure, it's got some challenges at the moment, but those challenges will only be made worse by this government refusing to give any detail around what their intention is around the details of this sort of legislation. It has become a habit of this place, a habit of this government. It was elected on a platform of transparency, and I can say to you that, in my experience as the shadow minister for health and aged care, this government has been anything but transparent since it's been here. I have never seen such an opaque government in my entire life.

Jordon Steele-John (WA, Australian Greens) Share this | Link to this | Hansard source

I want to start by indicating that the Australian Greens will be supporting the Private Health Insurance Legislation Amendment (Medical Device and Human Tissue Product List and Cost Recovery) Bill 2022, the Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Bill 2022 and the Private Health Insurance (National Joint Replacement Register Levy) Amendment (Consequential Amendments) Bill 2022. We do so while recognising that private health insurance is out of reach for too many people in Australia, and we acknowledge that the subsidy that this government provides to private health insurance corporations would be better spent and would better achieve health outcomes if we invested that money into the public healthcare system.

As stated in the second reading amendment that I will be moving on behalf of the Australian Greens, those in our Australian community who can afford private health insurance, which is increasing in cost again this year, are experiencing a system which is expensive but which ultimately delivers them faster access to health care. The inherent and growing inequality at the centre of this equation is astounding. We are creeping ever closer to an American-style healthcare system, and the Australian value of getting health care for free when you need it is getting further and further out of reach for so many. We've got to ask ourselves a fundamental question in this debate: why?

I have learnt, in this space, that, when something seems out of place, out of step, in this political building, in the decision-making processes of this place, when the government—whether it's the Liberal government or the Labor government—is making a decision that is fundamentally out of step with the needs of the community or what is in the community's best interests, there is often corporate money involved. And, lo and behold, the decision to not adequately resource our public hospitals, the decision to support an increase in private health insurance fees and the decision not to take immediate action to expand mental healthcare services to bring them under Medicare could, I believe, be firmly put down to the over $2 million of income the major parties received from private health insurers and pharmaceutical companies in the 2021-22 financial year.

In this current cost-of-living crisis, we need to see more from this government—more in relation to the expansion of public healthcare systems. We need to see changes to the way that our public health system works to meet the community expectation and the community need. What I hear from people across WA is that, instead of their private health insurance fees increasing, they want to see mental and dental health under Medicare.

Let's take a deep dive for a moment into the reality of the current dental health crisis. Only 42 per cent of people between the ages of 25 and 34 have been able to go to the dentist in the last year. We know that people are delaying addressing ongoing dental issues because, instead, they need to do things like pay their rents as they increase, and they simply cannot afford to go to the dentist to get that urgent dental work done. Of those who can afford to make it to the dentist, nearly a quarter are not able to afford fully treating the problem.

In 2019, there were 70,000 hospitalisations from dental conditions that could have been avoided. They could have been avoided. These are people that ended up in hospital when there would have been no reason for them to be there if they had simply been able to receive dental treatment earlier. Nearly 9,000 of those cases were in my state of Western Australia. On average, an Australian will spend $326 in out-of-pocket dental costs per year, nearly seven times what the government pays on average, per capita, in terms of subsidies to dental health care. These stats are a snapshot of why I dearly wish that the parliament was working on a bill to pass dental care into Medicare today.

As for mental health care, we have, again, a familiar story. People are unable to get the mental health supports that they need right now. Services are not available locally. There are very long waiting lists, or there are simply closed books. And, if you can get onto somebody's books, if you can get in to see someone, cost is then an additional barrier.

What does Labor do in response to this reality, the crisis of mental health care in this country, particularly in the aftermath of one of the worst periods of crisis in this country that we have seen in many years in relation to the healthcare system? It has pushed incredible weight upon people's mental health. The reality is that, for young people in Australia, there is an absolute and total mental health care crisis in this country. It is unparalleled in its history.

So what does Labor do in response to this absolute reality? They have stopped the 20 subsidies in the Better Access healthcare scheme, and they have wound them back to 10. Let me say that again. In the face of a mental health care crisis overwhelmingly falling on the shoulders of young people, this Labor government has decided to wind back the 20-session subsidy under the Better Access scheme to 10 sessions. It is absolutely unbelievable. The reason they've given for this disgraceful decision is some mumblings about capacity in the system. They've referenced reports and reviews, even though those reports and reviews do not, in fact, recommend rolling back the 20 sessions; they recommended the augmentation of the system. So, in the face of these reports and realities, and endless submissions from mental-health-care peak groups, this government rolled back those subsidies and blamed it on capacity. And when anyone calls them out on the absolute nonsense of that—the disconnected, illogical nature of looking at massive unmet need in the system and responding by constraining access—this government looks you in the face and says: 'Well, we've got to balance the budget; we've got to make sure the books add up,' while, at the same time, they give a quarter of a trillion dollars to some of the richest people in this country, in the form of the stage 3 tax cuts. It's absolutely disgusting! In no other area of Australian public policy would it be acceptable to respond to an increase in need by constraining access and then claiming that you're doing the right thing by the community that is demonstrating that increased need.

Addressing the cost-of-living barriers is exactly what this government should be doing, by expanding the system so that people can get what they need, when they need it, where they are, without that being determined by them having to choose—having the luxury of choosing!—between health care or mental health care and paying their rent. These are basic expectations of the Australian community.

Australians should not have to rely on private health insurance to get timely access to health care. It is time to prioritise public health care and to get dental and mental health into Medicare, where they have always belonged. And it is time to get this done now. This is what Australia needs. This is what the Greens will continue to work on, until people are able to access this relief and until these goals are achieved.

In closing, I move the second reading amendment standing on the Notice Paper in my name:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) the Australian Government has announced that, on average, private health insurance premiums will increase in April 2023 by 2.9%,

(ii) the Australian community is relying on private health insurance policies to avoid delays in the public system, which is underfunded and in crisis,

(iii) the major parties received nearly $2 million from private health insurers and pharmaceutical companies in their party annual returns for the 2021-22 financial year,

(iv) the community perceives a link between donations to political parties and their policy priorities; and

(b) is of the opinion that the Australian community should not have to rely on private health insurance to access health care in a timely manner".

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Before I deal with some of the details of the Private Health Insurance Legislation Amendment (Medical Device and Human Tissue Product List and Cost Recovery) Bill 2022, I would like to counter some of the remarks of Senator Steele-John. I know that, when he comes into this place, he is always sincere, he is always passionate and he believes everything he says in this place—there can be no doubt about that.

But let me say this. The best strength of our healthcare system in Australia, and what makes us different from other countries, is the strength of both our private health system and our public health system. Each buttresses the other. If this country were ever to undermine the strength of our private health system, it would be a disaster—an absolute disaster for those who need to access the public health system.

Let me give you one example from my home state of Queensland which I think summarises the position extremely well. In 2012, on dental health lists in the public system in Queensland there were 62,513 people. There were more than 62,000 Queenslanders who'd tried to access dental health care in Queensland under the previous Labor government, before the LNP government was elected in 2012. That's 62,513 Queenslanders. Some had been on that waiting list for up to 10 years. In 10 years, they couldn't access the public health system.

The LNP government was elected in 2012. Within two years, how many people were on the public health system waiting list for dental health care? Remember: it was over 62,000. Was it 20,000? No; fewer. Was it 10,000? No; fewer. Was it 500? No; fewer. There were none—none. In two years, that waiting list had been taken from 62,513 to zero. How? By leveraging the private health system—by the government giving people vouchers so they could go and see a private-sector dentist and get their teeth fixed. Within two years no-one was on that dental healthcare waiting list—not a single person. That is the power of having a system which mobilises the private health system. Those who can afford it, such as myself, get private health insurance, and if we don't get it we're punished under our tax system. And that's the way it should be, to make sure that our public health system is there and available for those who are most vulnerable.

In my home state of Queensland, there are 2,354,000 Queenslanders with private health insurance. I say to each and every one of those Queenslanders it would be a disaster, an absolute disaster, if this country adopted the Greens policy. This was their policy, and I've got it here: the Greens policy from the last federal election was to abolish the private health insurance rebate. That was the Greens policy. It would be a disaster. We would see waiting lists far in excess of that 62,513 if we abolished that healthcare rebate.

We all know, and the people in the gallery will know, for friends and family it's nearly their No. 1 priority to make sure they have got their private health insurance coverage. Many pensioners, many people on retirement incomes, scrimp and save to make sure they have got that private health insurance, and they deserve a rebate. They deserve to be rewarded by that insurance rebate, and those of us in higher income brackets deserve to be punished if we don't have private health insurance. That is how we get the best outcomes in our healthcare system—the public system working together with the private system. It will be a disaster for the people of this country if we ever change that system and rely simply on a public healthcare system, which is what the Greens are advocating.

That is what they're advocating. It will be a disaster for the most vulnerable of Australians, and I will certainly make sure, up to the next election, that people who voted Green at the last federal election in my home state of Queensland—in the seats of Ryan, Brisbane and Griffith—know that the Greens policy is to abolish the amount you get back for getting private health insurance coverage. I will make sure that every one of those of voters knows that the Greens are coming after their private health insurance rebate. The Greens don't believe in the private health system. They're coming after your private health insurance rebate. I will make sure I remind those Queenslanders every day between now and the next federal election that the Greens are coming after their private health insurance rebate, because I think it would be a disaster for the health system in this country if the Greens were successful in what is clearly, patently, an ideological obsession against private providers of anything. It's an ideological obsession which would be a disaster for the most vulnerable in our community.

Having made those introductory comments, I'll move now to some of the particulars of the legislation in this case. The coalition, of course, supports this legislation. It reflects much of the work that was done by the coalition government. This is an example of an orderly transition in our democratic government, with policies which were introduced by a prior government being continued under the next government where they're in the best interests of the Australian people. It is something we should acknowledge.

There are concerns, however, with respect to the lack of detail in the legislation. As senators know, I have a particular concern, wherever it applies, when there isn't sufficient detail in the legislation to understand how a system is going to work in practice. On this occasion, there are a number of areas where the legislation is lacking, and we haven't seen all the regulations and delegated legislation which actually put the meat on the bones in terms of a lot of this legislation and how it will operate in practice.

There are some significant issues which are going to be dealt with in regulations that we haven't seen yet, and, as we all know, the devil is often in the detail. These are some of the issues: eligibility criteria with respect to the crucial health items that fall within this legislation, listing pathways, specifications for the calculations of cost recovery, regrouping and payments for removal items et cetera. Bear in mind that, with respect to this legislation, those who are providing private health insurance, private health coverage and these sorts of services and items in the Australian community were given less than one week to consider the draft legislation—less than one week. We need to do better than that, surely.

The concern I have is that when legislation is introduced in a rush there are always unintended consequences. The devil is always in the detail. There are fundamental concerns about the process with respect to this legislation and how it's made its way into the Senate. The bills provide little detail about the extent or specificity of the powers to be implemented through unsighted subordinate legislative instruments and mechanisms. We just don't know the powers that underlie this legislation. Who's going to exercise those powers? What are going to be the ramifications of those powers? It's also done in regulation, which means this chamber has less opportunity to oversee that legislation and to assert our will and our concerns through disallowance procedures.

Our opposition shadow minister, the Hon. Senator Anne Ruston, raised specific concerns and asked a particular question. I'll put that particular question here again today: are there going to be any changes to the ability of private health hospitals, private institutions, to provide particular surgeries and undertake particular procedures? Let me put it this way: will a private hospital undertaking a type of surgery today be able to do it tomorrow, once the regulations come into effect? Now, that's a pretty basic question. What is going to be the impact of the regulations on private hospitals in terms of the surgery they can undertake? Are they going to be prevented, through the operation of the regulations, from doing a procedure tomorrow that they can do today? That's the sort of detail we should have as we're discussing this legislation.

But, because so much of the detail—and this happens again and again in this place—is going be buried in regulations, senators from all jurisdictions, all the states and the territories, aren't going to have the ability, transparency and visibility to identify particular concerns for their constituents. The system shouldn't work that way. We should have that visibility and transparency so we can raise legitimate concerns with respect to how this legislation is going to work in practice. But at the moment we just don't have that visibility, and I think the government should reflect on that. It is simply not good enough.

It is not good enough for draft legislation to be released by the government of the day—and I don't care of which political persuasion—and for key stakeholders to only have one week to actually give feedback on that draft legislation. If there are unintended consequences, as invariably there are—no-one's perfect—then the only way we can introduce in this place legislation which is effective, which is efficient and which protects the interests of all Australians is to have a genuine consultation process with respect to the draft legislation so that we can get the views of those who know the most about how legislation like this applies in practice. This chamber and the Australian people have been denied this opportunity because this legislation has been so rushed.

In this legislation, we can also see one of my key bugbears in this place. We have subordinate legislation which is going to be introduced, potentially, and there are questions over whether or not that subordinate legislation is going to be subject to disallowance. This is, again, unacceptable from my perspective. Any subordinate legislation and any regulations which are going to impact rights, liberties, freedoms and opportunities, which are going to have any negative impact on Australians and their interests, should be subject to disallowance in this place. They should be subject to any of us as senators introducing a vote, saying, 'This isn't good enough,' and prosecuting our arguments on the floor of this chamber and trying to persuade a majority of our colleagues to our view. We should have the opportunity to have that debate with respect to regulations that can have such a serious impact on the lives of Australians.

With that, I certainly do support the intent behind this legislation. I do have material concerns with respect to how that intent is going to be translated into the regulations, because those regulations could have a material impact on Australians seeking particular surgery in the private health sphere. We need to have detail with respect to that.

In conclusion, the strength of our health system is built on two foundations: the strength of our private health system and the strength of our public health system. We get the best health outcomes for all Australians when we have both a strong private health system and a strong public health system. I say to those Queenslanders who voted Green at the last federal election, 'We will be reminding you, between now and the next election, that the Greens are coming after your private health insurance rebate.' That will be a disaster for many thousands of people. Over two million Queenslanders have private health insurance. In my view it will also be a disaster for our public health system because a successful Australian health system depends on a strong private system and a strong public system.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I rise to offer a brief contribution on these health bills and on the topic of private health insurance more generally. As Senator Scarr has pointed out, we do have a health system that is a mix of public and private health care. Our tax system actively incentivises many Australians to hold private health insurance. In fact, from the most recent statistics that I can see, well over half of us now have private health insurance. That number has been growing since the pandemic. People obviously value their health and they are taking up private health insurance.

Given these incentives and the potential extra tax for not having private health insurance, I feel that we as a parliament have a duty to ensure that the system is working efficiently and is delivering the care that Australians need. The system clearly has its challenges. A range of commentators have expressed various views, but it's really important that we remember this is affecting the lives of Australians. People feel the effects when the system, whether it is private or public, doesn't work for them. This is something I hear a lot about from my community here in the ACT. People are frustrated with what they see at times as a lack of value. I'll give you one example.

I recently heard from a gentleman living in the south of Canberra. He had been to have a treatment at a prosthodontist. It cost him $1,500. He was reimbursed just $57 by his fund, despite having paid, he estimates, around $47,000 in premiums over the last 15 years. I don't claim to know the specifics of this case and the level of coverage he had, but it's hard to see that this gentleman received value for his investment in this specific interaction. For the last 15 years he has been paying over $3,000 and is out of pocket $1,400 for a procedure.

Each year the ACCC delivers to the Senate a report highlighting some of the key trends in private health insurance. I thought I would highlight some of the figures that stood out to me in their 2020-21 report. The average gap expense for hospital treatment increased by 9.5 per cent on the previous year. It has increased by 23 per cent over the last five years. Private health insurance management costs have increased by eight per cent, or about $200 million. That's an extra $200 million in salaries, management costs and bonuses. At the same time, the number of exclusionary policies grew by 150,000 policies or around 4.6 per cent. According to the ACCC, this is part of a long-term trend which has seen the number of policies with exclusions grow from 28.7 per cent in 2012 to 61.3 per cent today, which is likely a function of people cancelling top cover and opting for low-cost, basic policies to avoid the added tax expenses. However, in some good news, the industry appears to be making good on their promise not to profit from the pandemic and has reported returning a total of $2.1 billion to consumers up to 30 June last year.

It's also worth noting that premium increases have generally been lower over the past couple of years—certainly lower than inflation. However, the cost of living is really hurting Australians at the moment, and every percentage point matters. From the insights delivered by the ACCC, it's clear that the system is just not working as hard as it can for patients. It can work harder. That brings me to these prostheses benefits that are the topic of the bills before us today. I've spent a number of weeks delving into this legislation and some of the complexities. I can report that it is, indeed, a complex area of policy. It's a system that seems to be quite precariously balancing a number of interests.

Last year, the government entered into a four-year agreement with the medical technology industry to drive savings on prostheses benefits. Prostheses benefits will now reduce over the next four years and will be aligned with public sector prices. However, the prices won't be able to fall below a seven per cent floor; they will have to be seven per cent higher than in the public system. It should be noted that the ACCC has raised some concerns with these arrangements in their report:

While the ACCC welcomes efforts to reduce the underlying cost of prostheses, the ACCC notes that the MoU's floor on prostheses benefit reductions is likely to have some distortionary impacts on prices for medical devices in private healthcare.

I understand this is a complex system and there are many different factors to take into account. In some instances, it's very hard to compare what's happening in the public system with the private system. But, putting that aside, these savings that have been committed to—around $900 million, almost a billion dollars of savings on the table over the next four years from the medical technology industry—should be delivered to consumers.

I have drafted an amendment that would mean that there is an update to the longstanding OPD where the ACCC reports into private health. It would simply look at how much of these savings are being realised from this agreement, and how much of them are being passed on to consumers, which is something that I think this parliament has a duty to do. When these sorts of savings are put on the table for consumers, we can put processes in place that actually check on them and make sure that they are flowing. We can't have a system where large deals are agreed to by government and then have no scrutiny. There really is no point in having this generous offer of almost a billion dollars over four years and it not flowing to consumers. People who are paying their premiums every month for themselves, their partner or for their whole family deserve to see a share of that almost $1 billion in savings. I have circulated an amendment. I believe it is a very minor one; it is simply adding a little bit more scrutiny. I would hope that the Senate will support it. I do not see a good reason not to support transparency measures, given this generous deal that we've seen that is going to deliver these savings.

I'd also like, just finally, to raise some concerns around the lack of visibility of the delegated legislation. Senator Scarr has also raised this. As a new parliamentarian, I've been pretty shocked, frankly, at how much is done by delegated legislation from ministers. I understand that's how it's done, but there should be scrutiny of that. Ideally we'd have the ability to debate it and potentially amend it here in the Senate, but, if there are bills that simply allow delegated legislation, I really believe that there should be visibility over that delegated legislation so we can have a look at it and have the debate in this context, rather than having to try and use what is the very blunt instrument of disallowance. For me, the first option is certainly preferable. Being on the Standing Committee for the Scrutiny of Delegated Legislation, I really would echo Senator Scarr's concerns around non-disallowable instruments. Parliamentarians are elected by their electorate, or by their state or territory, to scrutinise legislation, and to have a system where there are a whole range of things that are non-disallowable doesn't make sense to me. To me, it doesn't pass the pub test when it comes to politicians being elected to represent the people that vote for them.

I support this legislation. I foreshadow that I will be moving a second reading amendment, which I commend to the Senate. I really believe that it would add a layer of scrutiny without slowing up or affecting what is proposed at all.

Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I thank the senators for their contributions to the debate on these private health insurance amendment bills. This package of bills supports the implementation of a 2021-22 budget measure, modernising and improving the private health insurance Prostheses List. As other senators have observed, it arises after an extended period of consideration and reform.

These bills represent the first tranche of legislative change required to fully implement measures that will support modernising and improving the private health insurance Prostheses List. The first bill is the Private Health Insurance Legislation Amendment (Medical Device and Human Tissue Product List and Cost Recovery) Bill 2022. This bill inserts definitions of medical devices and human tissue products into the legislation, which will better define the kinds of products that, along with additional criteria contained in the legislative instrument, will be considered eligible for set benefits from private health insurers. The bill also provides for the renamed Private Health Insurance (Medical Devices and Human Tissue Products) Rules. This new name is reflective of the modernised and amended scope of the legislation. The bill also updates the cost recovery arrangements to support predictable and sustainable fee-for-service arrangements.

The second bill is the Private Health Insurance (Prostheses Application and Listing Fees) Amendment (Cost Recovery) Bill 2022. This bill provides for levies payable by medical technology sponsors for the listing of medical devices and human tissue products. These levies are essential as they allow the department to administer the listings in a financially sustainable and appropriate manner.

The third bill is the Private Health Insurance (National Joint Replacement Register Levy) Amendment (Consequential Amendments) Bill 2022, which is machinery in nature only and does not change any current requirements or obligations.

These bills will modernise and improve administrative processes and cost recovery arrangements. They are long-awaited improvements that will assist in keeping downward pressure on private health insurance premiums by reducing the costs associated with medical devices and human tissue products.

I note the report from the Senate Standing Committee for the Scrutiny of Bills, and the government has circulated an amendment for the committee stage which goes to that. We would expect to speak to that in the committee stag I note, too, the second reading amendments that have been moved and foreshadowed during the course of the debate. The government is not supportive of these amendments.

I want to particularly speak to second reading amendment 1826. We are aware that some stakeholders report practices between hospitals and sponsors that may constitute anticompetitive behaviour. These are usually investigated by the ACCC, supported by a body of evidence that can support the claims. The ACCC establishes an annual program of work, and any inquiry into the Prostheses List would be subject to the priorities of the ACCC. Given that such an inquiry would take some time to establish and report following a reference from the Treasurer, the government is committed to shorter-term reforms that will make a significant impact. A key component of the Prostheses List reform is the development of a new compliance framework. This will include standard regulatory regime provisions for effective monitoring, investigation, referral and enforcement. Essential to the compliance framework is the ability to gather information from stakeholders and to share information with relevant regulators on matters of noncompliance, and the ACCC and the TGA are key regulators for referring matters of noncompliance.

The government is working to introduce legislation in the spring sittings to establish the compliance framework for safeguarding the Prostheses List. In the meantime, a number of existing laws continue to apply to Prostheses List stakeholders. These include: the Therapeutic Goods Act 1989, which regulates the supply and advertising of therapeutic goods, including medical devices; the Australian Consumer Law, which deals with misleading or deceptive conduct in trade and commerce; and the Criminal Code, which deals with providing false or misleading information to Commonwealth entities. We consider these mechanisms appropriate while the broader reforms are being rolled out.

In relation to the motion circulated and moved by Senator Steele-John: all Australians deserve access to affordable treatment and medical devices to stay healthy and to live full and productive lives. Private health insurance works with our public healthcare system to offer Australians more choice in health services and encourages those Australians who can afford to do so to contribute to the cost of their own health care, taking some of the pressure off public hospital systems and waiting lists. More than half the Australian population—about 14½ million people—have private health insurance. Australians, it seems, want to exercise choice about their health care. Private health insurers must ensure their members are getting value for money. When costs rise, they want to know higher premiums are contributing to system-wide improvements like higher wages for nurses and other health workers. As I indicated, all Australians deserve access to affordable treatment and the devices they need to stay healthy and to live full and productive lives.

In closing, I again thank senators for their contributions and for the courteous spirit in which the debate took place. I commend the bill to the Senate.

(Quorum formed)

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the second reading amendment moved by Senator Steele-John be agreed to.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I move:

At the end of the motion, add "and that the order of the Senate of 25 March 1999, relating to an order for the production of periodic reports by the Australian Competition and Consumer Commission on private health insurance, be varied as follows:

(1) There be laid on the table as soon as practicable after the end of each period of 12 months ending on or after 30 June 2023, a report by the Australian Competition and Consumer Commission containing an assessment of any anticompetitive or other practices by health funds or providers which reduce the extent of health cover for consumers and increase their out-of-pocket medical and other expenses.

(2) Each report must also include:

(a) an assessment of the savings on prostheses that are being achieved through the operation of the Memorandum of Understanding for the policy parameters of the Prostheses List Reforms between the Minister for Health and Aged Care and the Medical Technology Association of Australia, signed on 14 March 2022; and

(b) an assessment of the extent to which these savings are being passed onto consumers by private health insurers.".

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the second reading amendment moved by Senator Pocock be agreed to.