Ensuring lower surgery costs and continued access to healthcare through general use items

Department of Health

The Albanese Government is taking steps to ensure the cost of essential surgical items don’t rise, stopping those costs being passed on to patients and hospitals.

In 2021, the former government committed to remove general use items from the list of medical products, devices and prostheses that private health insurers must pay. The change was scheduled to come into effect on 1 July 2024.

General use items cover a wide range of items commonly used in surgeries, like staples, sutures, and glues. Reforms to reduce the prices of general use items have already been estimated to save over $78 million dollars, putting downward pressure on private health insurance premiums.

The removal of these items from the Prescribed List raised questions over whether those costs would now be carried by patients with private insurance through higher out-of-pocket fees, or private hospitals.

Private hospitals are an important part of the Australian health system, and an important partner for public health service providers, covering more than 40 per cent of all hospital admissions and delivering more than 70 per cent of elective surgeries.

The COVID pandemic disrupted their normal functioning and caused the volume of elective surgeries in private hospitals to fall. Data from the Australian Bureau of Statistics shows profit margins fell from 9.6% in 2017-18 to just 1% in 2021-22, with 7 in 10 private hospitals making a loss that year.

More than 15 million Australians hold private health insurance. To prevent the risk of placing further pressure on household budgets or private hospital balance sheets at this time of heightened cost pressures, general use items will no longer be removed from the Prescribed List on 1 July.

This change is supported by private hospital operators and the Australian Medical Association, as well as some private health insurers.

Organisations that currently supply similar medical devices can apply for equivalent general use items to be included on the Prescribed List from 1 November 2024.

Quotes attributable to Minister Butler:

“The Government has listened to the concerns about the pressure removing general use items would have caused and decided that this achieves the best outcome for patients.

“To maintain access to quality healthcare and to provide certainty to private hospitals and patients, the cost of these common surgery items will continue to be funded through the Prescribed List.”

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