Mr Drummond urged the government to take urgent action on the issue, telling The Age and The Sydney Morning Herald after the meeting: “We’ve raised the issue with the government, with the Department [of Health], and I think the department and the government are looking into it … we need that to be expedited because it is putting pressure on the system.
“Our issue is not the price reductions, although we do think more needs to be done on the price because the device prices in Australia remain very elevated compared to the same device pricing in the public system and other international jurisdictions. Our issue is more around why, in a flat environment, volumes continue to go up, and that makes it harder from an affordability point of view.”
If patients in the private health system paid the same for prostheses as those in the public system, it would save $500 million, he told shareholders.
He said agreed savings on prostheses through previous government reforms had not been materialised due to an unexpected increase in volume.
“The latest data from APRA, published in August, shows total prostheses benefits paid by insurers were down $13 million in 2019, not the expected $193 million,” he said.
“This is curious, as the increase in volume was not a result of an increase in the number of people insured or an increase in surgical volumes.”
Mr Drummond’s comments follow the peak health insurance lobby group, Private Healthcare Australia (PHA), noting the amount its members pay for common prostheses is often two or three times higher than in comparable countries, and they could save at least $700 million a year if prices here were brought into line with an international benchmark.
Mr Drummond refused to disclose what Medibank had submitted as their proposed annual premium increase to Health Minister Greg Hunt for approval.
Medibank’s remuneration report, which gave Mr Drummond a pay packet of $2.78 million, received a 20 per cent protest vote. Medibank’s shares rose 0.64 per cent to $3.16 at market close.