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Changes to the Prostheses List and the risks associated with AR-DRGs
The Prostheses List, the list of medical devices such as hips and knees, pacemakers and heart valves, and ophthalmic lenses, for which insurers are required to pay a benefit when a policy holder has the relevant coverage, is changing.
The Federal Department of Health has begun informing stakeholders that they will propose the Government consider Australian revised – diagnostic reference groups (AR-DRGs) as the new model for the purchasing and reimbursement of medical devices. Private health insurers have put pressure on the Department to shift to AR-DRGs despite the Prostheses List amounting to just under 10 per cent of their benefit costs. Device prices are continuing to fall according to the latest data provided by the APRA, resulting on private health insurers paying less for medical devices over the last 12 months. In fact, some medical devices have their prices drop by over 30 per cent!
AR-DRGs benefit insurers by saving them money, while also transferring all risks associated with the case-mix away from insurers and onto hospitals. In a recent address to the MedTech industry’s annual conference Ben Harris, the policy director for Private Healthcare Australia (the insurer lobby group) admitted “there are players who would lose out from a move to DRGs”.
This might seem like an argument between insurers, medical device companies, and the department of health, but a shift to AR-DRGs would have real ramifications for Surgeons and Hospitals. AR-DRGs will group patients with similar diagnoses requiring similar hospital services together. Meaning multiple procedures will grouped into a single averaged AR-DRG price. This will see hospitals only receive enough money to cover an average medical device, leaving private patients, who have paid thousands to receive superior products, with standard products.
Surgeons conducting a procedure in which a patient needs a device that costs more than the average price (such as a revision or complex procedure) could be placed under enormous pressure to cut the cost of their procedure by using an inferior, cheaper device or to shift their patient onto the public system.
The Hon. Greg Hunt MP, Minister for Health has not yet approved the departments preferred move to an AR-DRG system saying he is still in information gathering mode. Now is the time for stakeholders, like yourself to speak up and have your opinion in this shift heard.
(Article submitted by Medical Technology Association of Australia)
RACS attends Medical Society of Papua New Guinea Medical Symposium
Our Global Health team attended the Medical Society of Papua New Guinea’s 55th Medical Symposium in Port Moresby this month, hosted by the University of Papua New Guinea (PNG). The theme of the meeting was Health Education.
The meeting was an excellent showcase of the clinical leadership which already exists and is flourishing in PNG. The future is bright with the next generation of specialists coming through, with many Fellows and RACS Global Health volunteers alike supporting continuing professional development in the country as part of RACS’ commitment to Global Health.
The surgical community in PNG has held a long-standing relationship with RACS. RACS Global Health manages the Australian Government funded PNG Clinical Support Program, which sits under the PNGAusPartnership investment in health.