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Wednesday, 28 October 2009
Page: 11384


Mr DUTTON (10:29 AM) —The Private Health Insurance Legislation Amendment Bill (No. 2) 2009 will amend the Private Health Insurance Act 2007 to allow the minister to conditionally list prostheses on the Commonwealth prostheses list and to allow for the creation of rules for listing criteria.

The Private Health Insurance Act requires private health insurers to pay benefits for prostheses for hospital treatment or hospital substitute treatment that is eligible for a Medicare rebate. Currently more than 9,500 prostheses are listed. Prostheses are listed on the advice of the Prostheses and Devices Committee according to mandatory and non-mandatory criteria. The mandatory criteria include: the prostheses must be registered on the Australian Register of Therapeutic Goods; the prostheses must be provided to a person as part of an episode of hospital treatment or hospital substitute treatment; and a Medicare benefit must be payable for the service associated with the prostheses.

As stated, there are also non-mandatory criteria. A non-mandatory criterion states that a listed prosthesis should be surgically implanted in the patient and be purposely designed in order to replace an anatomical body part, combat a pathological process or modulate a physiological process. As highlighted in the minister’s second reading speech, the bill will have particular relevance for insulin pumps. Whilst insulin pumps are currently listed, there has been some ambiguity concerning their status due to the fact that they are not surgically implanted and do not require hospital admission. Insulin pumps may not be surgically implanted but they do replicate the function of pancreatic cells, which produce insulin, and accordingly they may be considered a prosthetic. Insulin pumps provide improved glucose stability and assist in reducing the risk of the complications from diabetes, such as retinal eye disease, nerve disease and kidney disease.

Type 1 diabetes currently affects 140,000 Australian children and adults. All stakeholders would recognise the importance of removing the ambiguity surrounding insulin pumps on the list, and the coalition supports such a move. There have been important initiatives over a number of years now to improve access to appropriate medical services and products for people with diabetes. This is particularly important given Australia has one of the highest incidences of type 1 diabetes, currently the sixth highest incidence globally. The coalition government provided $442 million between 2000-01 and 2005-06 for Diabetes Australia and the National Diabetes Service Scheme. The National Diabetes Service Scheme enables people with diabetes to access subsidies for essential products such as syringes, insulin infusion pump consumables and diagnostic products. The coalition government committed a further $667 million for the period beyond 2006-07.

The current minister made reference to other measures being provided for people with diabetes in her second reading speech. Most notably, the minister mentioned the government subsidy for insulin pumps. The subsidy the minister referred to provides $2,500 for people with type 1 diabetes under the age of 18. Access to the subsidy is also means-tested. However, this subsidy has not been delivered as promised. The minister claimed that the subsidy would benefit nearly 700 children and young adults in a press release of 2 July 2008. Only families with incomes less than $60,000 are eligible for the full subsidy of $2,500. The government budgeted $1 million for the program in 2008-09; however, in Senate estimates it was stated that only $419,000 had been claimed. As of this month, I am advised that only 38 insulin pumps out of the anticipated 700 have been provided to eligible applicants.

The Juvenile Diabetes Research Foundation has been very effective in managing the scheme and communicating with families and health professionals and has successfully generated a high level of interest in the scheme. There have been over 500 enquiries and 164 applications, but uptake has continued to remain very low. With the existing means-testing thresholds, eligible families have been left with too great a co-payment. The co-payment on an average pump costing $7,500 is $5,000 for families earning less than $60,000 per annum. With this bill removing any ambiguity of the status of insulin pumps on the prostheses list, there is a clear incentive for families to take out private health insurance and claim reimbursement after the waiting period if they are in a position to do so, rather than incur the $5,000 co-payment.

The coalition supports the provisions of this bill affecting insulin pumps. However, it seems contradictory for the minister to be prosecuting an ideological crusade against private health insurance whilst expecting insurers to cover for the underperformance of government programs, especially when 75 per cent of new pumps are already purchased through private health insurance. With respect to the conditional-listing component of the bill, there is an argument that certain devices which may not otherwise have been listed should be listed for limited interventions which are shown to be clinically appropriate and cost effective. There is a clear benefit to patients to have access to life-saving devices without blowing out costs to private health insurance.

How conditional listing is implemented in practice may nevertheless prove problematic without careful consideration. Unfortunately, this bill and the minister’s speech provide very little detail as to the process for conditional listing and the conditions which may be imposed. Without sufficient detail, concerns may arise that ministerial power to impose conditions may be too great and curtail clinical decision making of surgeons. Will conditional listing just be imposed on certain types of surgery or will it extend to where surgery is provided, who provides it or to whom it is provided? As stated, there is a compelling argument for conditional listing, but the government needs to provide greater detail regarding the process of imposing conditions to alleviate such concerns. Similarly, without sufficient detail regarding the conditional listing process there is a risk that interest groups will intensively lobby for prostheses which have failed to meet listing criteria and whose clinical effectiveness and cost-effectiveness may be doubtful.

The Health Technology Assessment Review is due to report in late 2009. The scope of the review includes ‘listing of prostheses for private health insurance coverage, as currently informed by the Prostheses and Devices Committee’. It would have been more prudent, in my view, for the minister to have waited for the release of the recommendations of this review before progressing with conditional listing. Waiting for its release may have alleviated the aforementioned concerns regarding ministerial power under this bill for the conditional listing process.

Whilst the coalition do not object to the intentions of this bill, we have concerns about the lack of consultation undertaken, the lack of detail provided in relation to the conditional listing process and the adverse consequences that may result from any rushed implementation. On that basis, we provide support to the bill. We do have a number of concerns, which we hope the government may be able to turn their minds to.

In closing, I acknowledge the wonderful work of many people in this parliament, on both sides of the House, in providing their support to the sufferers of type 1 diabetes. In particular, some of the young children who come to Parliament House on a yearly basis are afforded a very warm reception, and rightly so. The involvement of some of my colleagues has been nothing short of outstanding. Mr Deputy Speaker Washer, your involvement in the health area has been quite amazing. It is appropriate that Judi Moylan is in the chamber today. People right across the country have acclaimed the work that she has done for sufferers of diabetes over a very long period. The passion that she brings to the debate has resulted in better outcomes for sufferers of diabetes, in particular type 1. Long may she continue to do that work for the betterment of sufferers in this country.