Private health cost to fall Premiums could drop by $150 after pricing review

analysis of public and private hospital data by the independent Hospital Pricing Authority, confirmed the Government was forcing health funds to pay too much for the devices.

A Senate inquiry report next week is also expected to reveal health fund members are overpaying for the devices causing their premiums to be pushed up.

The Government sets the price health funds pay for medical devices and the funds have been arguing they are available for much less in public hospitals and overseas.

Health insurers have calculated Australians using private hospitals are paying $900 million a year too much for medical devices.

An analysis conducted for the private health insurance industry found a pacemaker that cost $13,520 in Australia was just $5840 in Japan.

A hip replacement part sold in Australia for $5150 costs just $1225 in France, and a cardiac stent that is priced at $3450 here costs just $655 in Italy.

Public hospitals in Australia can buy the same medical devices used in private hospitals at half the price, the funds say.

The analysis found the inflated medical device prices added an average 4.5 per cent to health fund premiums.

The hospitals pay much lower prices for the devices than the government set price.

They get to keep the profit they make under this system, which has deterred companies making cheaper devices from competing in Australia.

In 2016 Ms Ley made tiny cuts to device prices ahead of the April 2017 health fund premium rises. But funds were furious she did not go further.

Hirmaa, the peak body organisation for 21 not-for-profit, member owned and community-based private health funds, has welcomed the review.

“The inflated prices being charged by device manufacturers is reprehensible and completely unjustifiable,” Hirmaa chief Matthew Koce said.