MTAA KEY POLICIES FOR 2013 ELECTION. 1 February Improving reimbursement of medical technologies by private health insurance

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1 MTAA KEY POLICIES FOR 2013 ELECTION 1 February Improving reimbursement of medical technologies by private health insurance Medical technology is not funded by the Commonwealth Government in the same way as medicines. Medicines are listed on the Pharmaceutical Benefits Scheme after assessment by the Pharmaceutical Benefits Advisory Committee and agreement by the Government to fund a new medicine. Medical technologies are reimbursed in the private health system by the private health insurers at a level of benefit recommended to the Government by the Prostheses List Advisory Committee. The Government retains an interest in the reimbursement of medical technology in the private health system because of the private health insurance rebate. In general a benefit will only be paid for an item listed on the Prostheses List (PL). The PL uses an outmoded definition of permanently implantable to determine eligibility for coverage. Occasional exceptions are covered by ex gratia payments by private health insurance funds to members. Including non implantable medical devices under the managed system for reimbursement for private patients will make payment of a benefit for these items transparent and predictable. At present, payment is subject to decision at an individual level by a health insurance fund. While the PL treats the reimbursement of implantable devices efficiently, there is uncertainty and inefficiency in the way non implantable devices are managed. Current structure of the PL hinders the introduction of more efficient and effective technologies because of the current outdated definition of a prosthesis. A more flexible approach would replace older technologies with more efficient solutions that can provide high quality patient outcomes. The criteria for listing medical technologies on the PL should be expanded to include nonimplantable single use medical technology in the following circumstances: o when compared to alternative treatments, the medical technology is assessed as clinically effective; and o the cost of the product is relative to its clinical effectiveness; and o it is used to prevent a more invasive product or treatment; or o it is likely to avoid the patient requiring a more expensive product or treatment. Healthcare funding arrangements for new technology not covered by the PL can vary between individual hospitals and individual health funds, depending on their contractual, policy and commercial considerations. A private insurer can have different funding approaches for the same procedure, with the benefit paid to members depending on the hospital in which the procedure is conducted. These arrangements are not particularly transparent and not easily understood by health fund members. Implement a mechanism for regular review of benefit levels with the objective of avoiding patient co payments. 1

2 Improve the responsiveness of the Medical Services Advisory Committee (MSAC) processes when considering applications for new Medicare Benefits Schedule item numbers a mandatory prerequisite for listing on the PL. Issue: 2. Reforms to regulation of medical devices The Australian regulatory system achieves a safe, practical balance between appropriate pre market requirements and patient access. It does this by applying appropriate benchmarks against global standards. It is a transparent, efficient approach that avoids the duplication and inefficiencies that would be the inevitable result of imposing unique Australian regulatory requirements. Given that all medical devices are regulated by the Therapeutic Goods Administration (TGA), this balance is essential in ensuring that Australian patients have timely access to safe and efficacious products. Additional TGA assessment should not be required for regulated products. However, we believe the capacity of the TGA to undertake regulation could be strengthened by broadening the range of assessment bodies that are available to Australian manufacturers. Australian manufacturers require a certificate of origin to enter many overseas markets. Reliance on the TGA, alone, adds significantly to the cost and time delay in bringing these products to market. Focus on improving post market surveillance through better access to reporting of adverse events by healthcare professionals and consumers. Provide for use of clinical quality registers for high priority, high risk medical devices. Registers should have well understood objectives, good governance, appropriate industry involvement in management of the registry, shared funding across stakeholder groups, and be cost free to patients. MTAA supports the operating principles for clinical quality registers published by the Australian Commission on Safety and Quality in Health Care. Third party conformity assessment. Auditing of compliance should be opened to other competent organisations with the TGA to act as auditor to ensure the assessment bodies meet appropriate standards. This would remove a major barrier to Australian manufacturers but still maintain the integrity of the Australian regulatory system. It would also provide additional expertise for assessment of increasingly complex products. Australia New Zealand Therapeutic Products Agency (ANZTPA) supported, provided there is no additional cost burden on industry. 2

3 3. Public hospital reforms National activity based funding arrangements were introduced on 1 July They provide for Federal Government funding at the average price for all hospital services. There is no provision for the introduction of new technologies under the current arrangements that is devolved to the States and only Victoria directly provides funding to assess new technologies. A long term strategy is needed for progressive refinement of public hospital patient classification systems to guarantee continuous classification development and real time reimbursement. Further, there is no incentive built in to the current pricing framework to encourage best practice pricing, something that would stimulate public hospitals to improve compliance with safety and quality measures. National activity based funding reforms. MTAA supports the initial phase but is concerned by gaps in the arrangements (eg. MTAA proposes national leadership and a mechanism to enable managed introduction of new medical technologies with uniformity of process between States. This could be developed by collaboration at the national level with sharing of clinical evaluation of new technologies). Establish and implement regular updates of classification systems for public hospital services to enable ongoing clinical currency, and faster uptake of innovative and cost effective technologies. Support the introduction of best practice pricing to drive compliance with agreed safety and quality measures that will improve patient outcomes and reduce avoidable errors. Best practice should ensure the right care for the right patient in the right location. Support the broad definition of hospital services as it ensures treatment outside the hospital setting (eg. hospital in the home). This addresses a perverse incentive that drives patients to hospital for treatment. Public health procurement processes can be reformed through national leadership to achieve Australia wide consistency in process, tendering, contracting, and increased utilisation of e procurement. 3

4 4. Improving support for patients in the community There is significant cost effectiveness in keeping people out of hospitals and aged care facilities, and properly cared for in their own homes and communities. Many newer medical devices are wireless enabled to support monitoring of the patient s condition. With implantable devices, the device itself can be monitored remotely. There are clear efficiencies in adopting this technology in Australia. However, there is no reimbursement for the healthcare provider to take up remote monitoring. That acts as a disincentive. Research data strongly support the benefits of remote monitoring because it can ensure more timely intervention and avoid hospitalisation. Reimbursement can be structured so that there is no incremental cost to Medicare. There are many medical products that support better healthcare for patients with chronic disease outside the hospital setting. If these devices were made more accessible via a modest subsidy and in a consistent way, they would support patients remaining in their homes, outside a hospital or aged care facility. The benefits to the patients, community and health budget would be significant. At present, some of these products are supplied by State governments, some by Federal government but across the System, there is considerable inconsistency in these arrangements. Telemonitoring and telehealth: o Need broad based and comprehensive telehealth policy underpinned by existing strong evidence of improved patient outcomes. In particular, telemonitoring and telehealth can deliver better healthcare for patients in regional and remote areas, or housebound in cities. o Introduce reimbursement for remote monitoring of implantable devices on a cost neutral basis with capitated fee, so as not to increase overall cost to Medicare. o Introduce reimbursement for remote monitoring of vital signs, making use of care packages to incorporate both the capital equipment and ongoing monitoring costs. Essential Care List: o Establish a subsidised list of cost effective and clinically effective medical products that support improved health management in the home setting. o Access to subsidised products is subject to healthcare professional assessment and is means tested. o Merge existing State and Federal schemes into one comprehensive scheme for subacute products, access to which is not dependent on where the patient lives. 4

5 5. Development of a sustainable medical technology industry Australia has many of the essential foundations to develop a strong medical technology industry with highly skilled manufacturing capability that could produce products for the domestic market and for export. The attributes required to feed industry development include strong health and medical research capability, a sound public health system, graduate schools in biomedical engineering, manufacturing capability in parallel industries such as automotive parts manufacturing, existing world leading companies in the sector, and access to growing markets in our region. Federal leadership is needed to steer development of an action plan for growth of a medical technology industry and to identify areas where government intervention would deliver superior results. Health purchasing is a significant contributor to economic activity in Australia. At present there is no linkage between health purchasing and support for industry development. That could be achieved in several ways: commitment to clinical trials in the public hospital system, commitment to purchase clinically effective products which are the result of publicly funded research and development, providing opportunities for companies to develop specific products in response to identified health needs. Industry development: o Establish an industry action plan to develop the medical technology industry with contributions from industry, universities, research bodies, government (including the regulator), and funders to work on a series of policies that together generate growth (eg. skills transfer, industry/research hubs, seed funding for early stage companies). Integration between health and industry development: o Put in place mechanisms to drive product and company development through identification of health needs with a challenge to companies to develop products that meet those needs. o Commitment that the health system will adopt clinically effective products that have been developed as result of public R&D funding. o Establish innovation hubs and identify innovations within the health system that can be commercialised. A percentage of returns should be reinvested in seed funding for new ventures. 5

6 SECONDARY POLICIES Issue: 6. Industry codes of practice and application to non members of associations Existing codes of practice are self regulatory under the ACCC framework for industry codes. However sponsoring industry associations can only mandate compliance by their members (through a membership constitution) which means that non members avoid compliance requirements. This leads to inequality in the market when non member companies behave contrary to the code of practice and which denigrates all companies in the industry. The medical technology industry was part of a working group that recommended mechanisms to address this inequality in the therapeutic industries and we would like to see those recommendations implemented. Industry self regulation, provided it is robust and transparent, is preferable to government imposed regulation through vehicles such as a Sunshine Act equivalent which imposes considerable compliance cost on the industry. Ultimately, those additional costs are passed through to the health sector. Working group on promotion of therapeutic products report: o Implement recommendations to drive compliance by non member companies. This should include a requirement that every company registering a therapeutic product on ARTG nominates the relevant industry code to which it will adhere. o Member and non member companies can then be equally subject to compliance, monitoring and complaints processes contained in the industry code. Reinforce value of self regulatory code rather than move to Sunshine Act legal compliance with its additional costs 6

7 7. Needlestick and sharps safety in the healthcare workplace Occupational exposure to bloodborne pathogens from needlestick and sharps injuries create a significant risk in the healthcare workplace and prevention should be addressed at a national level with appropriate regulation. Regulations should be aimed at creating a safer working environment for healthcare workers and ancillary workers. This can be achieved through a combination of education on working safely with sharps devices, mechanisms for reporting needlestick or sharps injuries so that data can be captured on prevalence, and on transition to safety engineered medical devices to the point where such devices become mandatory. Safety engineered medical devices have been specifically designed to address the risk of needlestick and sharps injury. Mandatory use of safety engineered medical devices (SEMDs) is a workplace health and safety issue and should be addressed through national code/regulations under consideration by Safe Work Australia. SEMDs include needles for skin injection, devices used for intravenous cannulation, needles for blood collection, safety scalpels, blunt suture needles and the like. Where medical devices are designed to ensure a safer working environment, or safer outcomes for a patient, the default position should be that a safety device is preferred to a device that does not provide the same level of protection. Other examples include devices that provide safe medication delivery. 7