Health Minister Greg Hunt under pressure to tackle insurer costs

Reporting a 9 per cent drop in first-half profit this week, Medibank Private chief executive Craig Drummond said the use of prostheses was rising five times faster than hospital admissions. Low-cost devices were being replaced with more expensive or lower-quality items than those used in the public system, he said.


Medibank has submitted its claims data to the government in the hope it will spur intervention.

Health insurers last year accused medical device manufacturers of deliberately driving up sales of surgical kit like skin glues, sponges and temporary tubes to offset revenue lost under a 2017 deal with the minister to cut the price of hip, knee, lens and cardiac implants.

Their complaints sparked a Health Department review of the “general miscellaneous” category of the federal government’s “prostheses list”, which sets how much health funds must pay for more than 10,000 medical devices.

A spokesman for Mr Hunt said the government’s reforms had reduced the cost of prostheses to private health insurers by up to 20 per cent for some classes of medical devices.


Medical Technology Association of Australia chief executive Ian Burgess said manufacturers had delivered $400 million of savings under its previous deal with Mr Hunt, with more to flow from this month under the next stage of the agreement.

“Medibank’s management seems to routinely fail to understand that timely access to the best and latest medical devices is exactly why their customers put up with years of premium pain,” Mr Burgess said.

The minister will make a decision about the prostheses review after receiving advice from the independent Prostheses List Advisory Committee. Submissions to the review close on March 2.

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