Human " Spare Parts " !

In the medical world they are known as " Prostheses " and that covers the wide range of items used to repair the human body.   Everything from screws and plates needed to hold broken bones back together to hip and knee replacements which keep the elderly mobile.  Items big and small, including Insulin pumps to keep diabetics alive, stents to keep blood flowing in faulty hearts and even the tiny lenses that save cataract patients from blindness.

In our curios medical system there is no charge for any of these " human spare parts "  in the public hospital system, but there are limitations, and there are differences in what is available between the public and the private hospital systems.   When a manufacturer comes up with a new prosthesis  it is first subjected to an efficiency test and then the Health Minister negotiates a price the public system will pay - when it gets approval to go on the PBS listing.   Often, it will go to tender if there is a hassle over it's price structure.

Because the private hospital system is served by eighteen entirely different medical insurers it would be unusual for a tender to apply to spare parts pricing, and they represent 14.3% of the premiums pie we pay for medical insurance - and that represents an annual bill of $ 1.9 billion.  It is not unusual for the private patient to find a huge surcharge tacked onto his or her hospital bill - with this relating to the prosthesis used.

As any car owner knows, buying spares in the car parts jungle involves a vast price discrepancy between makes and models.   Often precisely the same headlight that fits different cars will come at a huge price difference just because each car manufacturer embosses it with their brand and sees fit to price accordingly.    Very often, that same unbranded item is available at a mere fraction of the branded cost.

The public hospital system offers surgeons a much smaller choice of prostheses whereas the private hospitals offer a wider range, but with newer and improved models not yet approved in the public sector - at a higher price.  That is often the reason people give for having private health insurance - the option of choice of surgeon and the hope of access to the latest development in the world of medical innovation.

The fact that patients in the private system are paying up to seventy percent more for some prostheses than the cost billed to the government in the public system is of concern to the Health Minister.   It illustrates the difference in negotiating a common price when one system is entirely in government hands and the other is fragmented between eighteen different health insurers who have patients attending a range of many private hospitals under the legal jurisdiction of the various states and territories.

It will be possible to negotiate a better deal - if all the parties refrain from squabbling and agree to appoint a mutual body to act as the conduit between prosthesis manufacturers and the entire private insurance and hospital systems - and the states reach accord on where their laws interact in the medical arena.

Common interest makes this essential.  The wider the cost gap between the public and the private hospital systems the more people opt out of paying for health insurance, and our ever increasing aged population is the main user of prostheses.   A seventy percent price differential is simply not sustainable !