AMA submission to the Department of Health consultation in relation to options for reforms and improvements to the Prostheses List

The AMA understands the need to ensure that private health insurance (PHI) is viable moving forward and hence the need to reform the current settings. We have contributed and, at times, lead the debate on possible mechanisms of reform to ensure that Australia’s private health sector is sustainable and thrives into the future. The AMA recognises the need to address the full range of policy settings and levers to improve the position of PHI and this includes the need to reduce costs to insurers, especially where they do not support quality clinical outcomes.  

The AMA supports the need to reform the Protheses List, to deliver not just efficiencies in price, but to improve the evidence supporting prostheses use and therefore the clinical effectiveness of practice. Medical practitioners have been the leaders in generating this evidence base. It was the Australian Orthopaedic Association that established the National Joint Replacement Registry (AOANJRR), which next year will have been operating nationally for 20 years collecting information on hip, knee, shoulder, elbow, wrist, ankle and spinal disc replacement from all hospitals in Australia undertaking joint replacement surgery. This registry has saved the health system hundreds of millions of dollars by providing information on the performance of prostheses to clinicians and therefore driving change in utilisation. 

While the AMA understands that need for comprehensive reform of the Prostheses List, we strongly oppose the introduction of a Diagnostic Related Group (DRG) funding model. We support a sensible reform discussion that focuses on fixing known problems with the Prostheses List. Our position is based on the following non-negotiable principles: 

• clinical choice by the medical practitioner;  

• access to a range of prosthetic items to suit patients’ needs; and  

• no out of pocket costs for a prosthetic item, regardless of its expense. 

The choice of prosthesis system should not be based on what costs the least to Government in terms of administrative support – this is a false and dangerous logic. The AMA would like to highlight that investment in a quality system delivers quality outcomes – outcomes for patients, outcomes for providers and outcomes for governments, both in terms of the health of Australians but also in ensuring expenditure is maintained at affordable levels.