Patient outcomes and access to innovative ophthalmic devices are at risk as the Government begins implementing a series of reforms to the Prostheses List (PL) this month, according to leaders among Australian ophthalmologists.
The reforms, following a number of reviews that commenced in 2017, will remove a number of products currently funded by private health insurers for use in surgery. While the Government’s aim is to put downward pressure on private health insurance premiums for consumers, eye surgeons have stated that the changes will reduce their clinical freedom to choose the best technology for each patient’s needs. Privately insured patients will no longer have guaranteed access to the best medical technology without paying out-of-pocket costs, and furthermore, without private insurer funding, we can expect to see fewer innovative medical technologies introduced to Australia.
The reforms are expected to take four years to complete, and will involve an ongoing review of products for potential reclassification and removal from the list. But the eye health sector still has time to take notice and advocate to protect the PL by lobbying relevant politicians.
WHAT IS THE PROSTHESES LIST?
The PL is a group of products that must be implanted or remain within the body, as well as products that have a therapeutic purpose. To be listed on the PL, a product must meet a set of eligibility criteria including evidence of comparative safety, effectiveness and cost-effectiveness. The PL Advisory Committee sets a minimum reimbursement price (benefit level) for the product that must be paid by health funds to hospitals/clinics, with no out-of-pocket cost to the patient. The benefit level set for reimbursement is not necessarily the same as the purchase price paid by the hospitals or clinics.
generally, reviews and reforms are a critical part of ensuring products are safe and effective, and this includes being cost effective
From the top: Drs Nitin Verma, Peter Sumich, Kerrie Meades, Rick Wolfe, Abi Tenen, Ben LaHood, Erwin Groeneveld, Andrew Apel, and Geoffrey Painter.
PRIVATE INSURERS ADVOCATING FOR CHANGE
Private insurers have been advocating for PL reforms, claiming that prices reimbursed to private hospitals/clinics for products listed on the PL are much higher than in the public sector. Indeed, the Independent Hospital Pricing Authority’s December 2019 report Prostheses Costs in the Private and Public Sector estimated a gap of 130% in the financial year of 2017-18.
Additionally, private insurers have argued that many items listed on the PL should be reclassified and/or removed, because they do not meet the criteria for listing, or are better characterised as ‘consumables’; and that several PL items (mostly ‘consumables’) are inappropriately over-used e.g. viscoelastics (OVDs).
Among 400 items to initially be removed from the PL, effective 1 March 2022, are several topical skin, tissue and surgical adhesives along with applicators. Also slated for removal, perhaps later in the year, are intraocular fluids, haemostatic devices, and closure devices, and then there is the potential removal of state-of-the-art intraocular lenses in the future. All of these changes have Australian ophthalmologists concerned, as expressed by a panel of nine experts at an advisory board meeting initiated by Alcon in November.
Karen Fowler, the Cluster Franchise Head and Country Manager at Alcon for Australia & New Zealand, said the meeting was convened to discuss the reforms and understand the potential long-term impacts on ophthalmologists and their patients. Alcon also sought to understand what role industry could take to ensure the interests of patients and ophthalmologists are adequately represented when it comes to future access to innovative technologies.
OPHTHALMOLOGISTS VOICE SERIOUS CONCERNS
The advisory board meeting brought Drs Nitin Verma, Abi Tenen, Peter Sumich, Ben LaHood, Erwin Groeneveld, Rick Wolfe, Kerrie Meades, Andrew Apel, and Geoffrey Painter together with Karen Fowler and Robyn Chu from Alcon, and Matthew Versi from the Medical Technology Association of Australia (MTAA).
While acknowledging that “generally, reviews and reforms are a critical part of ensuring products are safe and effective, and this includes being cost effective,” Dr Verma, and colleagues were united in expressing their concern over the immediate reforms to be implemented and the prospect of further reforms in the coming four years.
Speaking as president of the Royal Australian and New Zealand College of Ophthalmologists (RANZCO), Dr Verma said the College is concerned and seeks to ensure any items removed from the PL include a plan for funding.
“As it stands, the Department expects that private health insurers and hospitals will negotiate funding of the removed items from the Prostheses List, particularly viscoelastics and intraocular dyes and ocular fluids. This poses a key risk to clinician service delivery. Clinicians may lose autonomy because private health insurers are essentially choosing what type of viscoelastic/dye/fluid can be used based on their price; potentially resulting in additional costs in patient care and treatment,” said Dr Verma.
“This proposed change in funding structures may result in supposed preferential treatment of patients based on their hospital arrangement with insurers. Suppose patients from the same fund are having their surgery at different private hospitals by the same surgeon. Their treatment would be based on the arrangement that is in place between the private hospital and the insurer. This could greatly disadvantage smaller private hospitals and patients having surgery at smaller hospitals.
“Further, the cost to patients will be negotiated between private insurers and hospitals. This raises significant concerns around equity of access, especially for patients who will struggle to fund the cost of their own treatment.”
Dr Wolfe agrees. “Were the Prostheses List review simply a negotiation between health insurance and suppliers, it would have little impact on surgeons and maybe some benefit to patients. After all, we expect insurers to negotiate the best deal they can on behalf of their customers. Affordable health insurance is vital. The problem is that this time the proposals for reform, and their possible consequences, might seriously impact patient care.”
LIMITING SURGICAL CHOICE
While the changes will primarily impact topical skin and tissue adhesives, in the future they could also impact glaucoma devices, intraocular lenses, capsular tension rings, eyelid weights/prostheses, lacrimal drainage devices, orbital prostheses, retinal detachment prostheses (buckles, heavy liquids, gasses and oils) and artificial iris.
Dr Meades explained that many of these devices have a niche position in difficult cases that require specialised pieces of equipment:
- The removal of Vision Blue makes difficult cataract surgery with dense cataracts and corneal pathology more difficult, increasing complication rates,
- Viscoelastic (OVD) has revolutionised cataract surgery, protecting the corneal endothelium and radically improving corneal transparency after intraocular surgery, particularly in difficult cases,
- Glaucoma devices have directed glaucoma management away from compliance, allowing elderly patients to be less dependent on drops and the costs associated with this,
- Capsular tension rings are essential in difficult surgery, when zonules need to be supported, and
- Retinal detachment surgery has gone from very limited visual outcomes to much improved prognosis, due to devices such as scleral buckles, heavy liquids, gases and oils.
Service delivery, and therefore patient outcomes, will be affected, according to Dr Verma. “Like all surgeons, I select the prostheses I use based on what I believe is the best ‘fit’ for the patient. This decision is often via consultation with the patient, and is made considering their clinical history, as well as their general health, their work, and their lifestyle. Having a range of prostheses is the key to ensuring best patient outcomes. Another key factor is cost.
“Specifically, the College has opposed the reclassification of intraocular dyes and ophthalmology microcatheters (MIGS) as accessories. The reclassification means these devices may not be separately funded through the PL, but instead their cost will be bundled into the cost of the device they are intended to be used with. This has implications for equity of access for patients, especially those without private health insurance. In the case of viscolelastics, intraocular fluids and dyes, the choice for which fluid/dye/viscoelastic is used with each implantable device is unique to a patient’s clinical picture. Intraocular fluids and dyes cannot be bundled with a particular prosthesis as an accessory because the surgeon needs to be able to choose which fluids/dyes to use to safely and effectively implant the prosthesis depending on the specific clinical scenario. The choice of an intraocular lens and the intraocular fluids for a particular eye are usually independent and should not be bundled together.
“Ultimately, service delivery will be impacted by the proposed removal of items from the list. These devices are necessary for clinical use. Therefore, it is important to maintain devices on the list so that they are readily available when clinically indicated,” Dr Verma said.
Having worked in both Australia and New Zealand, Dr Ben LaHood said he can appreciate how this change will impact patient options and decision making. “Australia currently allows insured patients to have the most appropriate IOL technology for their eyes. In New Zealand, I felt like a salesman where, after explaining to a patient that they needed cataract surgery, I had to explain that if they wanted anything other than a basic non-toric IOL, they would have to pay out-of-pocket despite their insurance. This was not just for multifocal IOLs, but even for the simplest toric IOL treatment of their astigmatism, which Australian patients currently can just take for granted. Ultimately this means that patients make decisions based on their financial abilities rather than taking a once-in-a-lifetime opportunity to correct their vision optimally. That can be so disappointing for everyone involved,” said Dr LaHood.
ROLLING BACK THE CLOCK ON INNOVATION
Dr LaHood said the potential for removal from the PL, of state-of-the-art devices such as toric and extended depth of focus intraocular lenses, and minimally invasive surgical devices for glaucoma, will roll back the clock on innovation.
“Australian ophthalmologists are world leaders in accessing and providing their patients with the latest technologies. We are often ahead of European and Asian markets,” he said. “A lot of us stopped attending major American meetings such as ASCRS (American Society of Cataract and Refractive Surgeons) as regulations on their available technologies put them so far behind the rest of the world that discussions were of little interest. It would be such a shame for Australians if our market was to be put into the same slow lane as the USA.”
Ultimately, service delivery will be impacted by the proposed removal of items from the list
Dr Abi Tenen said surgeons fear that if the reforms succeed in limiting access to a wide variety of premium surgical products, such as presbyopia correcting IOLs, they won’t have the ability to offer tailored surgical solutions for patients with specific needs.
“Right now, Australia is a leader in terms of being able to offer our patients options that surgeons in many other countries don’t have access to. For example, we may use an extended depth of focus implant to give a patient with forme fruste keratoconus a good range of post-op uncorrected vision. We don’t take a ‘one size fits all’ approach and that affords us the ability to achieve outstanding outcomes. We shouldn’t take that for granted because if options suddenly disappear, we may be back to where we were years, if not decades, ago and that would be a disaster.”
Dr Wolfe agrees. “If these intraocular lenses are no longer funded – a real possibility – we will have to tell patients that the excellent uncorrected visual acuity previously available to others, is no longer available to them on insurance. Good uncorrected visual acuity is a real quality of life issue and indeed health issue. With no co-payment option they will have to go outside their insurance at great expense. It will more bring into question the value of insurance than the tiny reduction of increased premiums that would result.”
Looking to the future, where innovative products may no longer be funded by private health insurers, Dr Tenen said, “If products on the Prosthesis List are limited, industry won’t have the impetus to innovate and continue supplying us with constantly improving products, let alone new technologies. Ophthalmic surgery is highly dependent on refined technologies and I’d be surprised if the intricacies of what we do are appreciated by those making decisions regarding health insurance reforms.”
Access to innovation could also be stymied by a proposed reform to the way in which new devices are assessed and approved in Australia, as Dr Erwin Groeneveld explained.
“A new evaluation and approval process is proposed following registration by the Therapeutic Goods Administration (TGA). This may slow the adoption of new technologies by mandating independent assessment of quality, efficacy and durability before items can be added to the reimbursement schedule.
“Device assessments will take up to two years, and this will be overseen by the Medical Services Advisory Committee (MSAC). Evaluations are expected to be independent and rigorous; to protect the public. This means that the industry may need to pay for more research and development costs on shore before products or new devices can be listed in Australia.
“A potential consequence is that products will cost more or that health fund executives might manipulate the regulatory process to reduce choice; thereby driving higher profits.”
Indeed, Dr Sumich referred to MSAC as “the place where devices are sent to die over several years of red tape and delays”.
AFFECTING AFFORDABILITY
Ultimately, Dr Meades says, it’s patients who will lose out – both in terms of healthcare and cost. She expects the costs of any items removed from the PL will have to be covered as consumables by the private health hospitals or day surgeries and will be passed on to consumers.
“Potentially, they could be covered by the health funds, but more likely, it will be passed onto the patient as increased out-of-pocket expenses. This is already an area of dissatisfaction for patients and will potentially deter them from joining a private health fund (PHI). The premise that reducing the items on the PL or decreasing the amount paid for these items may reduce private health insurance premiums or stop them going up at the present rate is false, as these items are essential in many situations. Increasing out-of-pocket costs will have the opposite effect.”
…we need to ensure the review does not limit health professionals in using prostheses that are the best ‘fit’ for patients… and that do not place undue financial strain on the patient or the healthcare system
Additionally, Dr Meades said rising costs will dissuade uninsured patients from having surgery at a private facility, placing increased pressure on the public hospital waiting lists.
“In regional Australia, where we have limited resources, long public waiting lists and delayed surgery, this will be a disaster… It does seem an inhuman way to practise, with patients struggling to maintain independence (e.g. by restoring vision to retain their drivers licence etc.) at a time in their lives when financial considerations are limited,” she said.
Dr Tenen suggests a solution that will require a fundamental shift in values.
“While it’s clear that insurance can’t keep up with rising costs associated with developing surgical products, it would be sensible to look for a solution that both preserves the viability of the insurers and the access to optimal technologies.
“There seems to be a reluctance for insurers to increase costs to its customers, however it’s false economy if outcomes are compromised and then the patient requires further work done to achieve what could have been well achieved the first time!
“Perhaps a system of co-payment could be introduced so that if, for example, a patient wishes to claim cataract surgery with their insurer they would be covered for the service but if they elect to have a specific sub-specialised IOL, an appropriate out-of-pocket cost would apply. I think we need a cultural shift in our thinking: if we want to maintain premium surgical services and products, then perhaps we need to accept that there may be a premium cost associated with that. Blocking the technologies in order to maintain a ‘no-out-of- pocket’ scheme is only going to result in lesser outcomes and is counter-productive.”
WHAT’S TO BE DONE?
The Australian Society of Ophthalmologists’ position is that any changes to day surgery funding should be a wholesale reform of the entire funding package, not just an isolated punitive defunding of prostheses. However, this will take time, energy and perseverance.
“The private insurers have found sympathetic ears and some fertile soil in the Department of Health, which is away from the public eye and runs beyond the immediate political horizon,” said Dr Sumich.
“In the current proposed Prostheses List reforms, the PHI has cherry picked and contextually massaged a narrative that device makers are the root of all evil: ‘If only the big, bad device makers could be tamed, then health insurance would become affordable’.
“In reality, this is just the latest attempt of the PHI to carve out costs and increase profits while reducing the funding envelope for hospital providers.
“I have discussed the likelihood of patients losing access to innovative IOLs/MIGs etc. with the Health Minister, Greg Hunt, who has indicated that patient choice and quality of outcomes will always come first in any decision making,” said Dr Sumich. “However, the PHI, with endless resources to lobby and promote, have embedded their narrative into some senior health department figures who will outlast the current Health Minister and so this battle will continue for some time. There will be no positives to come from the current Prosthesis List reforms unless the entire funding apparatus of hospitals is included. This would ensure the continued survival of health infrastructure resources.
“Health insurance will continue to devolve while the current ‘for profit’ system is in place. It is simply not possible to continue squeezing patients, doctors and hospitals, without loss of some quality of the insurance products. The health insurers know this, and thus the recent discussions they have been having with United States insurers, who are schooling the PHI in the ways of managed care. NIB recently joined with Cigna Health Corp to form Honeysuckle Health, which would act as a health contract purchaser. Following a short sharp ASO led campaign named ‘Send the Eagle Home’, there was enough community concern to recognise the danger and the subsequent ACCC ruling significantly clipped the wings of the American Eagle. Honeysuckle is now confined to contracting only for NIB members and not the whole PHI as had been proposed. It was a significant win for ASO and proves yet again that when people find out what the PHI are up to they usually don’t like it.”
Unfortunately, as Dr Groeneveld explains, “Making profits for shareholders is the primary objective of publicly listed health insurers, unlike health benefits or mutual funds which, in the past, existed to provide benefits to members.”
“It is proposed, by interested parties and consumer advocates, that the private health insurers should themselves be held to account by an independent regulatory body. This body would oversee health funds and be mandated to protect choice and preserve value in private health insurance coverage,” Dr Groeneveld said.
At RANZCO, Dr Verma says continued engagement with the Department is critical to ensuring the reform outcomes do not exacerbate inequity.
“Of course, there are no easy answers. Closing the pricing gap between public and private hospital pricing should not be the basis for reform. There are multiple reasons for the observed pricing disparity. Prostheses List reform is better directed at providing privately insured patients with access to beneficial and cost-effective medical devices used in a medical procedure as part of an acute hospital or hospital-substitute care episode. Failing that, the Department should be involved in the negotiations between private insurers and hospitals on continued funding of removed items from the Prostheses List to ensure that patients are no worse off,” said Dr Verma.
“The increasing cost of prostheses warrants reviews and updating of the PL to optimise value for all stakeholders, including patients. We can advocate for our patients, but the onus is on the Department to ensure that intended cost savings are not achieved at the cost of best patient outcomes.”
He concluded, “Australia is blessed with an excellent healthcare system, and this is by design; conscious decisions made by health professionals and government. The detail is important though, and we need to ensure the review does not limit health professionals in using prostheses that are the best ‘fit’ for patients, resulting in best patient outcomes and that do not place undue financial strain on the patient or the healthcare system. As with everything in life, it is a balancing act and getting the finer details right is critical.”
To find out more, visit: health.gov.au/health-topics/private-health-insurance/private-health-insurance-reforms. To have your say email: [email protected].
