General Use Item decision welcomed by private hospitals

Australian Private Hospitals Association (APHA)

The private hospital sector has welcomed Health Minister Mark Butler’s decision to retain General Use Items (GUIs) on the Prescribed List of Medical Devices and Human Tissue Products which he announced today.

Australian Private Hospitals Association (APHA) CEO Michael Roff said the GUIs were scheduled to be removed from the on 1 July this year, which would have added additional and unnecessary financial pressure on the sector.

“Removal would have been a little over eight weeks from now, which means guaranteed funding levels for these items would have disappeared.

Mr Roff said removing GUIs would have made some surgeries untenable for many private hospitals.

“Procedures like bariatric surgery, knee replacements, and cardiothoracic surgery would have been at risk in the private sector, potentially leading to increased demand on overstretched public hospitals.

“The health insurance sector had not been able to devise a sustainable funding model for GUIs, which would have left private hospitals managing increased costs at a time they could least afford it.

“Despite a range of proposals from different health insurance companies, none offered a viable alternative funding model with all of them shifting financial risk onto private hospitals. Potentially, this could have added $250 million in costs to the private hospital sector,” he said.

Health insurers have already achieved significant savings on these items as they have been subject to full public sector reference pricing. This has contributed to an industry-wide profit of $2 billion for health insurance companies.

“While private hospitals have been facing significant financial pressures, with services and in some cases entire facilities closing, health insurance companies have enjoyed a period of super profits.

“APHA has been advocating GUIs should remain on the PL for many years, we were successfully able to have removal deferred for 12 months last July when the timeframe for implementation was unreasonable. Now the Minister has recognised that pushing on with removing these items from the list would cause unnecessary additional financial stress to the private hospital sector.

“We are grateful the Minister has listened to our representations and reversed a decision that would have added to the financial pressure on private hospitals,” he said.

/Public Release.