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I WOULD like to respond to the article published by MJA InSight on 29 October 2018 titled “Knee, hip replacements: the impact of private health insurance changes”, authored by Mr Ian Burgess, Chief Executive Officer of the Medical Technology Association of Australia (MTAA).
The reforms to private health insurance are designed to make products simpler and more affordable for Australians and do not limit an insurer from providing cover for the treatment of any condition in any policy. For the first time, insurers will be required to classify their hospital treatment products as Gold, Silver, Bronze or Basic and apply standard clinical categories across all policies. This classification will provide consumers with clearer information on the services covered or excluded by their policy and make it easier to compare different health insurance products. This approach will improve transparency and help consumers to make more informed decisions on whether their current level of cover is suitable or a different cover better suits their needs.
The reforms were informed by extensive consideration by the Private Health Ministerial Advisory Committee and a broader extensive consultation process. The Committee’s membership includes the Australian Medical Association, the Royal Australasian College of Surgeons, MTAA, consumers, private hospitals and insurers. Extensive consultations on the clinical categories with clinicians and medical colleges were key to determining the final arrangements. Professor Nicholas Talley AC was engaged to undertake an independent clinical review of the allocation of Medicare Benefits Schedule items to the clinical categories.
The Gold, Silver, Bronze and Basic product tiers have been designed to ensure that there are mandatory minimum product standards across product tiers. The minimum coverage requirements for the product tiers have been formulated to provide a progression of service coverage across products in a way that generally reflects the existing product market and which balances service coverage with premium affordability. Importantly, insurers will not be prevented from providing cover for any clinical category in any of the product tiers.
The introduction of “plus” categories reflects that many existing lower and mid-level products already provide cover above the proposed minimum requirements. Under the reforms, insurers will not be required to remove cover for additional clinical categories that are currently covered in their lower and mid-level products. If insurers currently provide cover in their entry or mid-level products for treatments that require a medical device (eg, pain management or joint replacements), they will continue to be able to do so. The product tiers establish minimum requirements, and insurers will continue to be able to offer cover above the minimum.
Contrary to the MJA InSight article, the final framework for the product tiers established the pain management category, which will be a minimum requirement for the Bronze product tier and above. Cover for pain management that requires a device or prosthesis will be a minimum requirement for Gold products. The product tiers and standard clinical categories can be found on the Department of Health’s website.
Mr Burgess contends that an assumption of the modelling regarding insurer profit levels is an objective of the reforms. This is incorrect and misrepresents both the modelling and the reform package.
It is also untrue that the reforms will result in an adverse impact on the public health system. This assertion appears to be based on a misunderstanding of the intent and design of the reforms, which is to increase transparency and affordability. I am also concerned with the assertion that the reforms will result in an increase in inappropriate use of opioids. I am conscious of the growing opioid issues internationally and in Australia, and action is being taken to reduce the harms associated with opioid dependence, including overdose fatalities.
The article’s suggestion to mandate coverage for expensive medical devices in the Bronze or Silver product tiers would likely result in increased premiums for these products and reduce their affordability. I note that the reforms have been welcomed by a number of sector bodies, including Pain Australia, the Australian Pain Society and the Faculty of Pain Medicine within the Australian and New Zealand College of Anaesthetists.
Professor Brendan Murphy is Chief Medical Officer with the Department of Health.
The statements or opinions expressed in this article reflect the views of the authors and do not represent the official policy of the AMA, the MJA or MJA InSight unless that is so stated.