Proposed prostheses List reforms: What do they mean for ophthalmologists? (dummy 2)

Introduction

More than 450,000 Australians aged 50 years and over suffer from visual impairment, which imposes a substantial burden on patients and the healthcare system in terms of reduced quality of life, productivity losses, reliance on vision aids and modifications, and increased long term health expenditure. 1

Due to the increasing prevalence of visual impairment and the ageing population in Australia, a growing number of patients are receiving ophthalmic prostheses, accessed either through the publicly funded health system, or through the national Prostheses List (PL), with private health insurance (PHI) providers paying a rebate. 1

The Prostheses List

The PL comprises a group of medical devices, including ophthalmic lenses, which private insurers are required to fund for eligible policyholders under the Private Health Insurance Act 2007. PL listings are based on a set of eligibility criteria, including robust evidence of comparative safety, effectiveness and cost-effectiveness. 2

This list offers a range of benefits to Australian patients in the private sector, including protecting access to the devices best suited to a patient’s individual needs, as determined in consultation with their surgeon. 3

Access to a choice of safe and effective ophthalmic devices through the PL, including premium and innovative devices, leads to enhanced patient outcomes, shorter waiting times for surgery, and long-term healthcare savings through spectacle independence, reduced rates of falls, and improved overall wellbeing. 1, 4 In terms of government and societal benefits, the PL also reduces the financial burden of ophthalmic surgeries and other costs. 1

As such, the PL is a valuable asset, providing substantial health and economic benefits to both patients and the government, and supports the value proposition of PHI in Australia. 1

Outline of proposed PL reforms

The need for health care reforms is widely acknowledged, as Australia attempts to manage tight healthcare budgets while delivering optimal care in an ageing population.

The PL reform proposal was developed after extensive review of the existing list, through consultation between the Medical Technology Association of Australia (MTAA) and the Australian Government, who invited public consultation. 5 In the 2021-22 Federal Budget, the government committed $22 million to overhaul the PL and its arrangements. 6 A Prostheses List Reform Taskforce was officially established on 1 July 2021, with the responsibility of instigating and implementing PL reforms progressively over the next four years. Changes are expected to come into effect on 1 July 2022. 6

The proposed PL reforms seek to change the way prostheses are covered by insurers, and involve several main initiatives ( Table 1 ). The first key initiative is to close the gap between the PL benefit and the public sector price. The second includes significant revisions to the way products are classified, which raises concerns about the impact on future access to innovative products in the private sector through the PL. 6

Essentially, the outcome may result in increased health funds profits, but with a narrower range of product choices for clinicians and patients.

More detailed information on the proposed PL reforms can be found on the government website: https://www.health.gov.au/healthtopics/private-health-insurance the-prostheses-list/prostheses-list-reforms-and-reviews

Expert Opinion: Proposed PL reforms and their potential consequences

In November 2021, a group of nine Australian ophthalmology experts convened for a virtual forum to discuss the proposed PL reforms. 4 The forum sought to clarify the potential implications of the reforms for clinicians and patients. The Panel also discussed the potential effects of the reforms on participation in PHI, and made recommendations about how the ophthalmic medical device industry could support efforts to increase awareness and work toward solutions that would not compromise patient care.

Implications of reforms

Consistent with the views of the MTAA, 1 the Expert Panel believes that the proposed reforms could have significant long-term implications for ophthalmologists and patients, as well as for the medical device industry. 4

Device innovation and availability Australia prides itself as fertile ground for industry investment in, and early adoption of new technologies – sometimes before they become available in USA. Ophthalmologists who have embraced technological advances, particularly in refractive surgery and laser cataract surgery, look forward to a further medical technology revolution within the next decade. It is imperative that Australia keeps abreast of these developments with timely approval of new technologies. 4

Unfortunately, the financial implications of the PL reforms may impact future industry decisions. Lower rebates could reduce the ability of the medical device industry to develop innovative products and participate in the Australian market, reducing the availability of novel technologies and the opportunity for spectacle independence for patients. Reduced revenue may also limit the ability of smaller niche technology providers to bring new products to market. 1

Device choice and patient outcomes The Panel also expressed unanimous concern that important questions around the quality of care offered to patients are becoming buried under the weight of economic debate, complex lists and definitions of what constitutes a prosthesis. 4

While acknowledging that the government cannot continue to pay for all options, there is concern that reducing rebates for ophthalmic devices on the PL could ultimately reduce the range of options clinicians can offer their patients – potentially reducing the quality of care in Australia. Generally, lenses on the PL are premium items, offering an increased level of functionality. Achieving an optimal visual outcome is the key goal of cataract surgery, and outcomes may be adversely affected as access to new technologies diminishes. 4

In addition, poorer long-term outcomes due to lack of access to premium devices may be associated with an increase in overall long-term healthcare burden. For example, approximately 85% of patients who receive premium ophthalmic devices achieve spectacle independence, compared with only 10% of those who receive monofocal devices. 1 Considering the savings from spectacles alone, premium lenses are estimated to achieve overall cost savings within 3 years. 1 Reducing access to premium lenses without regard for long-term healthcare costs could be considered ‘myopic’.

Furthermore, many suppliers of ophthalmic devices offer specialised ancillary services to support clinicians in optimising their use. A reduction in rebates could reduce the ability of the industry to provide these services, which could lead to less optimal postsurgical outcomes. 1

Private health insurance participation Financial savings for the government can be made by shifting patients from the public to the private sector, where the overall cost of surgery is substantially lower. The purported intention of the proposed PL reforms is to reduce prosthesis expenditure for PHI providers, with an anticipated flow-on effect of reduced premiums for patients, increasing PHI coverage and affordability. 1 However, this is not necessarily the case. Demand for PHI has been shown to be relatively inelastic regardless of rebate levels. 1

Goals to increase PHI participation through reduced prosthesis expenditure need to be balanced against the need for patients to have choices in terms of their healthcare provider, technologies and procedures that best suit their individual needs. If privately insured patients are faced with reduced choice or access – for example, being unable to access a toric or multifocal lens at no additional cost – it may have the reverse effect and become a key driver for individuals to opt out of PHI. Patients are likely to continue to participate in PHI only if private insurance represents clear value. 4

Similarly, hospitals and clinicians with the ability to do so, may treat a higher proportion of patients via public pathways if the incentive to treat them privately is reduced. 1

Co-payment option

In an era where new and more advanced technologies are available, there are significant questions around the mandate in Australia for no out-of-pocket costs to patients. In the current climate, this system may no longer be sustainable.

It has been suggested that a more equitable structure could involve a patient co-payment in both the public and private setting, similar to New Zealand, if patients want the most advanced technology. In general, people value things they must pay for.

Taking action

The MTAA has developed a targeted campaign (“Protect Patient Choice”) to make politicians aware their constituents may potentially lose access to advanced devices if the PL reforms go ahead. More information is available on the campaign website ( www.protectpatientchoice.org.au ).

In its current state, the PL is a valuable asset, providing substantial health and economic benefits to both Australian patients and the government. The Expert Panel agrees with the general consensus that any reforms to the PL must focus squarely on the needs of individual patients, including preserving access to the most clinically appropriate care. 3

The 2022 Federal election represents an opportunity for ophthalmologists, industry and patients to lobby members of Parliament regarding the implications of the reforms. Key opinion leaders and industry leaders are looking into gathering relevant local data to support the best outcome from the reforms, and ensure the future viability of the PL. 4

To make sure clinicians and patients retain access to premium devices in the private system, the Panel hopes that the ophthalmology community will unite in advocating for changes that will not only be of benefit to the health funds, but more importantly to Australian patients in the long term.