Senate Community Affairs Legislation Committee, , 1:08:41 to 1:25:48
Officials provide updates on the private health insurance premium round and the reclassification of intraocular therapeutic injections under the MBS.
Topics: Health, Procurement
Speakers: Hon Anne Ruston, Duncan Mcintyre, Hon Jenny McAllister, Speaker 16, Speaker 6, Blair Comley PSM, Penny Shakespeare, Speaker 15
>> great thank you Mr. McCabe. Um in terms of private health insurance uh can we move on to that? Um I just um would like to know when the private health insurance un changes
>> You're talking about the the premium round.
>> Yep.
Thank you, Senator. followed by private health strategy division. Um the premium round is proceeding submissions received in the leading to Christmas. Um the minister has then written back to those insurers where he isn't satisfied that their application would pass the public interest test and those resubmissions and reevaluation processes are ongoing.
>> Totally. Thank you. Um so do you have any idea of when it's going to be announced for this year? last year. I think it was on the 26th of February. We're getting pretty close to that date. Um you maybe minister, are you expecting the announcement um in in a similar time
>> Uh I'm not in a position to provide information about the timing of the announcement, Senator.
>> Um or maybe Mr. McBride, do you would you be in a position to be able to make sure the minister had the necessary information in order for him to make a decision within that time frame?
>> We're hopeful that will be the case.
>> Senator I think it is important to note here this is a process that involves twoing and throwing with the insurance >> even if we've provided information there may be a need to have other rounds with private insurers to get to the right outcome
>> but I'm just trying to ascertain that that you think that you're on track in terms of the processes that you control understanding that they need to be finalized and the minute needs to be just understanding whether we're going to see a um an early announcement um do you have any preliminary indications as to whether the premium will be higher rise will be higher this year than it was last year?
>> Not in a position to comment on that.
you minister are you aware whether the minister or or your government is concerned that private health is becoming unaffordable um for
Uh Senator, I think it can be it's very obvious that our focus as a government is on affordable health care for all Australians. Uh that focus extends to all aspects of the minister's responsibilities.
>> Okay. So what I'm sort of trying to understand is you know is there a prioritization to ensure this is that that we have a ongoing public private um health system in this country is that is acknowledged of importance to your government.
>> Uh Senator I think you can see in the work that Minister Butler's been doing um the areas of focus for him in this policy area. Um so you know for example for the first time the government has released a ministerial statement of expectations uh to the private health insurers for the the premium round uh that calls for efforts for those insurers to work to support the viability of private hospitals promote equitable funding outcomes across the sector. uh the minister uh can speak for himself but I think the government is is working in a very focused way uh within this sector and more broadly across the entire health the health health sector.
>> Okay. So the private health system is a
>> Senator Ruston that statement contradicts the evidence I have just provided to you which speaks about the areas of priority for the minister.
Um could I ask you about the um intravitrial eye injections um MBS >> what's the status in relation to, um, the reclassification of, I think it's item number 42738, the intraocular therapeutic injections from type B to type C. Um it was extended was supposed to change on the 1st of July 25 and it was had a 12 month deferral to 1 July 2026. Um is the government still committed to the reclassification of this item number?
>> Senator I think um in December when we last spoke about this we were consulting um and seeking feedback from a range of stakeholders. We have now um concluded that um that consultation. We received a very wide ranging set of feedback around the proposals um on that matter and and we've put advice to government and government will need to make a decision.
>> Okay. So as we're sitting here today, we have no sort of understanding or any idea of whether maybe minister, do you have any idea as to whether um this particular um procedure is going to have its classification changed on the 1 of July?
>> Uh I don't have anything to add to the advice the officials provided.
>> Okay. So um in in part of your consultation, um Mr. McCabe, did you um do a a thorough analysis of the the change in the out-of- pocket costs for patients who previously obviously had had this procedure conducted in an environment that would allow them to have claimed it on their private health and now no longer will sorry as of the 1st of July will now no longer be able to. What what sort of change in out-of- pocket costs did you determine that this would have on people who had to receive
we looked at this was acknowledging the concerns about out of pocket costs. Uh we sought views from the sector around the change um allowing those procedures to occur out of hospital versus the benefit of having it occurring in hospital and we got a range of submissions uh talking about the um positives and negatives in terms of
>> I'm talking just specifically about the costs. So, I mean, can you like can you break down for me um the cost of an IVI procedure under type B and type C in terms of the cost of it and who pays what? Because it'd be I mean the the the bottom line here is the change this change is probably not going to have much impact on the cost to the government. Maybe have a little but a very minimal impact on the cost to government. It's likely to have a major major impact to the out-of- pocket costs of the people who are receiving the treatment. I'm just keen to understand if you've done an analysis of what the change will mean to the out-of- pocket costs of the people who need these injections simply to see. Have you done that? >> Senator Nigel Murray, assistant secretary, medical benefits and digital health division. Um what the way this works is that at the moment there are patients who if they have the service in hospital they will get private health insurance. >> Yeah I understand that. I completely understand that. I'm just wondering if you have you that what the costing that's associated. I I absolutely understand the difference between the two and and the like. I'm just understanding what the cost implications
and how their private health insurance just going to make is that >> the change only affects those patients who don't have a clinical need to have the service in hospital. If there is a clinical need for the service in continue as today and there will be no have the service in hospital and if they have it out of hospital would incur some additional out-of- pocket cost but I can't give you a specific figure on that because we vary by individual
>> and how many people are in the small >> How many people um received this
>> I don't have those specific numbers. Broadly though, the MBS task force who looked at this some years ago found that about 13% of people were receiving services out of hospital when only about 3% needed services in hospital. But I don't have precise numbers. I can take that on notice if you like.
>> I mean, I'd be interested to know what your small group is um in terms of who's likely to be impacted by increased out of pocket cost.
>> Well, it's that 13 to 3% sort of deviation. down to 10% of the total population receiving those eye injections.
>> So I mean I'd just like to know the number of >> I'd have to take that number. Um because you know if there was one thing that I have received emails from from constituents in the last year in the health space specifically it is this one. So unless every single one of those this is not a small group by any means um of people um and from the information that they are providing us the out-of pocket costs are likely to go from somewhere from $80 to in excess of $250 every sort of six weeks that they have to have these injections. And I don't think it takes a rocket scientist to realize that the impact of that is likely either one of two things. We're going to have them everyone's just going to turn up in the public system and and have to line up at public health clinics to get these injections um which I don't know whether the public system is isn't able to to be able to deliver it or people will go without them and go blind. So I'd be keen to understand when you think that a decision is likely to make about this and also what the small group of people are because that is not my experience from the amount of people that have been contacting me. if you could come back to me because this is obviously critical and we can't wait till the next estimates to deal with this because there are a lot of people out there that would like some more certainty but understand you're only doing your job. Um thank you. Can I just um ask about the um PBS in investment? in um in a in Med news publication um and the latest reports um and there's sort of some data between the financial year 23 24 and 2425 and there seems to be some sort of discrepancy in in the data that's being reported but I'm just keen to understand can the department confirm that net PBS expenditure in 2425 was $200 million less than it was in
>> Senator, we just we'll just look for I've seen this.
>> Senator, our net expenditure figure for 2023 24 was uh 12 bill671
>> 12 bill6
71 million million >> and then for 2425 just check I've got the right year uh 12 billion 558 million I'm sorry I've got just at that level
>> okay so that's about 120 million
>> so the source of that is the PBS expenditure and prescriptions report
this the the the data that we've got that we've seen in menus suggests it's 200 but you're saying it's 120 or there abouts reduction. So does the department consider net PBS expenditure to be gross expenditure minus rebates? Is that how it's calculated?
>> Uh Senator uh yes that's broadly correct. So there's um a variety of sources of revenue that uh come from uh uh from rebates through uh various kinds of agreements that we have with uh sponsoring pharmaceutical firms. Um and those um uh offset the the cost of medicines. >> Uh of course the PBS is a demand driven program rather than one that has expenditure targets. Yes. >> Um and so these numbers reflect um patterns of use and vary from time to
time. I'd contest it's not exactly a demand-driven system given all the other levers that are put into it. But nonetheless, I understand when you turn up to the doctor or turn up to the pharmacist, that's how it appears to the the consumer. But in terms of the payments and rebates and the like, that's not how it works. But nonetheless, so gross expenditure minus rebates, we've seen $120 million less expended in this financial year than last financial year. So you dispute the figures that are in med news.
>> I'm sorry, Senator, we haven't seen those figures in Meduse. >> Okay. >> I'm not sure what the source is. So we'd need to look at them, check them, and
work out from a different source. >> But nonetheless, you you can see that there has been a reduction in PBS expenditure between 23 24 and 24 25. Sen
Senator, you would be aware that there are a range of mechanisms within the PBS to ensure that it uh um maintains its cost effectiveness and in particular there are a range of uh ways in which um pharmaceutical sponsoring firms reduce their prices over time to reflect competitive markets and the move from various medicines from on to off patent and all of those things interact to give us the total expenditure. Um we are certainly keen to contain the cost of the PBS uh to ensure that taxpayers continue to get good value for um the money that we spend on medicines. Um and that gives us the ability to continue to list new and innovative medicines to treat emerging um conditions for which there are therapies.
>> We also we also as a from a department not read a lot into one yearby-year number. Obviously there's the factors that Mr. McIntyre is talking about. We also get significant new listings coming from time to time and in fact in recent times some of these have been very substantial expenditures and there is a number in the pipeline that would be quite significant. So we would certainly look at a longer time series for those sorts of things.