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Thursday, 28 May 2009
Page: 4700

Ms ROXON (Minister for Health and Ageing) (10:00 AM) —I move:

That this bill be now read a second time.

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 procedures and devices used in the operations.

The work of the registry is critical to improving health outcomes for many Australians. Around 70,000 people had joint replacement surgery in the last 12 months.

The registry estimates that the information it has provided has improved surgical practice, reducing the number of unnecessary revision surgeries by 1,200 Australians per year.

In addition to improved patient outcomes, the registry estimates that it has saved the health sector and consumers around $44.6 million, based on reductions in the level of hip and knee revision procedures while the registry has been operating.

The average costs for revision procedures are much higher than for standard joint replacements, and the registry helps in minimising revisions by collecting data indicating which devices are linked to higher revision rates. This assists orthopaedic surgeons in selecting better performing prostheses.

Expenditure on hip and knee prostheses represents around 30 per cent of total expenditure by health insurers on prostheses. Insurers paid over $1 billion 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 per cent of privately insured hospital benefit outlays.

The registry assists in ensuring this funding, and public hospital expenditure, is directed to better performing products with lower revision rates.

Taxpayers have met the operating costs of the registry for over 10 years, which are now around $1.6 million a year.

It is appropriate that manufacturers and importers of medical devices used in joint replacement surgery now fund the costs of the registry. 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 Australian registry 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 registry 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 also produce $5 million in budget savings over four years.

Legislated cost recovery arrangements will ensure continuing and stable funding for the critical work of the registry and ensure that it can continue to provide data to improve patient outcomes.

The proposed arrangement will preserve the independence of the registry. As levies will be imposed under legislation, and collected by the government on behalf of the registry, there will be no possibility of funding being withdrawn from the registry by medical devices sponsors who are not happy with its findings.

Joint Replacement Prostheses Sponsors

The bill imposes a levy on sponsors of joint replacement prostheses. A joint replacement prosthesis is a prosthesis that is listed on the Commonwealth Prostheses List and which is used in joint replacement surgery. The person who made the application to have the joint replacement prosthesis listed on the Prostheses List will be the sponsor for the purposes of the new levy.

The levy

The bill requires the levy to be paid on days to be specified in the Private Health Insurance (National Joint Replacement Register Levy) Rules and on additional days, if any, determined by the minister.

The bill restricts the numbers of times a levy can be imposed to a maximum of six levies in any financial year.

Sponsors will be levied on each day specified in the rules, to be known as national joint replacement register levy days. A maximum of four levy days per financial year is permitted by this method.

Also, the minister can determine supplementary levy days. A maximum of two supplementary levy days per financial year is permitted.

Sponsors will be levied according to the number of joint replacement prostheses they sponsor, and the levies will only be used to fund the operating costs of the registry. The bill provides that there may be different rates of levy for one or more kinds of joint replacement prostheses, that the levy rate may be set at zero and that there will be a maximum levy rate of $5,000 per listing. This range of levies is appropriate, as there is a very wide range of products included in the registry, from screws and bolts that have prices of less than $50 each to specialised knee replacement systems, which can have prices of more than $67,000.

The government will determine the amount of levies through rules made under the legislation following consultation with the registry and the medical devices industry. I commend the bill to the House.

Debate (on motion by Mr Billson) adjourned.