Private Health Insurance (National Joint Replacement Register Levy) Bill 2009
Friday, 26 June 2009 05:34
Mr Speaker, I’d like to take this opportunity to talk about the Private Health Insurance (National Joint Replacement Register Levy) Bill 2009, and to make some comments about our health system generally.
Mr. Speaker, this Bill is another example of the strength of Australia’s health care system.
I will speak about the technical side of this Bill in detail in a minute Mr Speaker, but it is important first to set the context.
As we all know, due to the foresight and wisdom of previous Labor Governments, dating back to the Whitlam era and beyond, Australia has a health system that is the envy of the world.
Representatives from countries around the world are regularly visiting Australia and asking us the question; What is your secret? How do you deliver such a quality system for such a cost?
The answer, I believe, is two-fold.
First of all guarantee a universal standard of health care through Medicare.
The great principle achieved by successive Labor Government’s, and now so popular amongst the Australian public that it can only be undermined by stealth by those on the other side, Mr Speaker.
But the second principle, the second part of the secret of the success of Australia’s health care system is our vigilance on costs and constant refinement of the system to ensure it is always delivering good value.
That’s of course what we are doing today with this Bill Mr. Speaker.
The refinements we are putting through in this Bill are all about keeping costs down, and improving our research and evidence base for care, and the products we use for care.
Mr. Speaker, whilst universal health care is the major principle of our health care system, we do, of course, have a mixed or balanced system.
An important part of our health care system is the private health insurance component.
That’s what we are looking at today.
This is another example of how Labor is running a very tight and controlled ship in relation to Australia’s health care system.
Unlike the Opposition, we don’t believe in just letting the market rip.
We don’t want an out of control market in our health system like the one that has brought the international economy to its knees.
We don’t want a health care market that is allowed to operate unfettered with a focus only on profits rather than efficient health care.
So we are doing a bit of intervening in the market Mr Speaker.
We are intervening in the health care market to ensure Australian get good health care, and good value health care.
Mr Speaker, the National Joint Replacement Register Levy (or NJRRL as I will call it) 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 health outcomes.
This is about intervening to ensure evidence-based health decisions, and a transparent health system.
What the Bill will do is this.
It will :
• Impose a levy on sponsors for joint replacement prostheses to recover the costs of the NJRR;
• Define a sponsor as a person who has a joint replacement prosthesis or prostheses listed in the Private Health Insurance (Prostheses) Rules, or a person who was a sponsor immediately before the commencement of the Private Health Insurance Act 2007, of a prosthesis currently listed in the Private Health Insurance (Prostheses) Rules in accordance with the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007;
• Define a joint replacement prosthesis as a prosthesis listed in the Private Health Insurance (Prostheses) Rules and which is used for joint replacement; and
• Provide a rule-making power for the rate of the national joint replacement register levy.
Mr. Speaker, we are not talking small biccies 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.
What we are talking about here is a major, and growing, part of our health spend.
Expenditure on hip and knee prostheses represents around 30% 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% of privately insured hospital benefit outlays.
So this is an important area 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.
Mr Speaker, 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 Registry.
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 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. A phenomenal number.
The NJRR estimates that the information it has provided has improved surgical practice and changed 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 Mr Speaker.
And 1,200 Australians saved from painful, debilitating and costly revisions.
That’s what I would call a good outcome.
You can see just how easily health system costs blow out.
In many countries, such as America, where health systems are in chaos and all about who can make the most money, where the unfettered market is more important than good health care and good value care, nobody notices these costs and the cost increases.
That’s why so many of the world’s health care systems get out of control so quickly Mr. Speaker.
So I am very proud to speak on this Bill.
It is another measure of the quality and the sense and efficiency of the Australian health care system.
It might sound a bit callous Mr. Speaker 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 engineered into these products so that more products could be sold, and more services provided.
Just like what happens in a number of other areas of commerce.
But what we are saying here is no, Mr. Speaker.
We are saying no to in-built short life expectancy of products.
We want products that will last longer.
We want better products that last longer so people don’t have to go through the trauma of hip replacements every few years.
That’s basically what this is all about.
Mr Speaker, this Bill is also about making those people pay for research costs that have the commercial interest.
It is appropriate that manufacturers and importers of medical devices used in joint replacement surgery now fund the costs of 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, 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.
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 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 the NJRR.
The additional costs will not be able to 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.
All good Mr. Speaker.
We are allowing the private sector to play a role in our health care system, but we are keeping a very close eye on it.
We are making sure they provide value.
So that is it Mr Speaker.
It’s a good Bill.
It is a Bill in a Labor tradition.
We are happy to see enterprise and the private sector operating.
But we want value.
And we will intervene to get it.
It’s about making a great Australian health care system even better.
I thank you Mr Speaker and commend the Bill to the house.
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