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Thursday, 17 September 2009
Page: 9887


Ms ROXON (Minister for Health and Ageing) (9:17 AM) —I move:

That this bill be now read a second time.

The Private Health Insurance Legislation Amendment Bill (No. 2) 2009 will amend the Private Health Insurance Act 2007.

The bill provides for amendments to the act to allow for conditional listing of prostheses on the Commonwealth Prostheses List (“the List”), and allow the Minister for Health and Ageing to make Private Health Insurance (Prostheses) Rules to specify criteria for listing prostheses on the List.

These changes will commence on royal assent.

Conditional listing

Under the act it is currently unclear whether a prosthesis can be conditionally listed where the prosthesis is provided in circumstances where a Medicare benefit is payable.

Effectively this means that a surgically implanted device can be listed for general use, or not listed at all.

This is problematic because there are circumstances in which a device would be beneficial for some conditions or clinical circumstances, but where it would not be recommended or cost effective for general use.

For example, a sponsor has recently applied to list a device that is life-saving, but where it is not cost-effective to grant an unconditional listing of this device. An unconditional listing of the device would require private health insurers to pay benefits for that device regardless of the clinical circumstances in which the product is used.

The amendments proposed in the bill would enable the device to be listed on a conditional basis, ensuring patients have access to life-saving treatments in a way that controls the additional costs to private health insurance.

With further developments in medical technology there is likely to be a greater need for listing devices on a conditional basis in the future.

Criteria for listing devices

A number of prostheses on the List have recently been identified as not meeting the current criteria for listing as a prosthesis, for example, insulin infusion pumps.

An insulin pump is a small, computerised device that delivers insulin constantly under the skin through a plastic tube, removing the need for regular insulin injections. The pump is programmed to give small background doses of insulin continuously throughout the day and night depending on the individual’s needs.

The rising incidence of type 1 diabetes in children underlines the importance of the Rudd government’s decision to subsidise the cost of insulin pumps.

According to the Australian Institute of Health and Welfare (AIHW), the incidence of new cases of type 1 diabetes in children is rising at around three per cent a year. There were more than 6,000 new cases in children aged zero—14 years between 2000 and 2006, which equates to more than two new cases each day.

The Government now provides a means-tested subsidy of up to $2,500 for insulin pumps for people with type 1 diabetes under the age of 18. Pumps reduce the need for parental supervision in looking after a child with type 1 diabetes. They allow the child to participate in normal activities like school, sport and social functions with less constant monitoring.

The insulin pump subsidy complements other government measures assisting people with diabetes. Government funding committed to support people with diabetes is substantial. Last financial year, government expenditure on diabetic products supplied through the National Diabetes Services Scheme exceeded $126 million and expenditure on medicines for diabetes through the Pharmaceutical Benefits Scheme, such as insulin, exceeded $300 million.

The government is now taking action to ensure privately insured people continue to have access to insulin pumps.

Insulin pumps do not meet the normal criteria for listing of a prostheses on the Commonwealth Prostheses List, which contains private health insurance benefits for medical devices. This is because insulin pumps are not surgically implanted.

However, there is clear evidence that insulin pump therapy significantly reduces severe hypoglycaemic episodes and provides major improvements in the control of blood glucose. Effective diabetes control reduces health complications such as kidney failure, amputation, damage to the eyes and vascular problems. Given the prevalence of diabetes, preventing avoidable hospitalisations for these complications makes good business sense for insurers.

Access to insulin pumps also offers the best health outcomes and quality of life for many people living with diabetes.

I have asked the Prostheses and Devices Committee to develop a new part to the Prostheses List so that health insurers continue to fund insulin pumps and other devices for their members that are clinically effective and cost effective.

This new part of the Prostheses List will include certain devices that are not surgically implanted but have an internal part that is integral to their effectiveness and designed to combat a pathological process or modulate a physiological process, or surgically implanted devices that monitor a pathological or physiological process.

The amendments proposed in this bill will allow the government to make rules setting out the criteria for listing on this new part of the Prostheses List, based on the recommendations of the Prostheses and Devices Committee.

This will ensure clarity and consistency in the treatment of applications for listing on the new part, and ensure costs to private health insurance are controlled.

Products will only be listed where they are clinically effective, cost effective, provide significant health benefits to patients and can prevent the need for expensive downstream medical costs.

The new criteria will not override any of the current legislative criteria for listing. For example, a device must still be provided to a person as part of an episode of hospital or hospital-substitute treatment.

Accordingly, you can see that these changes will deliver significant benefits to consumers and to those who are privately insured seeking to use these and other devices. I commend the bill to the House.

Debate (on motion by Mr Lindsay) adjourned.