Australians pursuing treatment for pain should seek independent information about the risks and benefits of spinal cord stimulators because they often do more harm than good.

CEO of Private Healthcare Australia Dr Rachel David said a survey of consumers published today by Pain Australia should be interpreted with extreme caution because it was commissioned and fully funded by the Neuromodulation Society of Australia – a group representing the providers of spinal cord stimulators.

The ‘Pain Australia Spinal Cord Stimulator Implants Consumer Experience Report’ details the experiences of 73 people who have received spinal cord stimulators, of which 63 were selected by doctors who make a living from implanting the devices. The other 10 people responded to a social media call for participants.

“This is not medical research. It is a small carefully selected sample of patient stories designed to spruik the continual use of expensive spinal cord stimulators which are known to cause more pain and suffering for a large proportion of the people who receive them,’ Dr David said.

“If you are considering spinal cord stimulation, it is not a magic bullet. Talk to your GP about respected Cochrane Reviews that summarise legitimate research about it.”

“This is a billion-dollar industry that some doctors and medical technology companies profit from, so any consumer research funded by that industry must be heavily scrutinised.”

Spinal cord stimulators* are devices surgically inserted into a person’s back to send low levels of electricity directly into the spine to attempt to relieve pain. Australian health insurance data shows 1351 spinal cord stimulator procedures were done in Australia over the past year and that 27 per cent of people required revision surgery due to complications. The average cost of the procedure is $58,377.

“PHA is disappointed that Pain Australia has put its name to a report that was commissioned, funded and designed by people with a vested interest in selling these devices and procedures to people living with chronic pain,” Dr David said.

“Consumer research is critical to improve healthcare, but this survey is marketing in disguise. We agree with Pain Australia that more needs to be done to address pain in the community. However, bad science such as this is a barrier to developing better options for the millions of Australians living with chronic pain.”

*Spinal cord stimulation is also sometimes referred to as neuromodulation.

The post Consumers urged to be cautious about spinal cord stimulators for pain first appeared on Private Healthcare Australia (PHA).

Vaping caused serious health problems for 178 people requiring hospital treatment in recent years, including two people who died, and a toddler who was accidentally poisoned.

The latest data from Private Healthcare Australia – the peak body for health insurers – reveals seven children aged under 15 were hospitalised due to a vaping related disorder or injury since 2020, including a two-year-old. Another 19 young people aged 15 – 24 required hospital treatment connected to vaping. The average time spent in hospital was 5.6 days.

CEO of Private Healthcare Australia Dr Rachel David said the data was likely to be the ‘tip of the iceberg’ because it only included people who used their health insurance for their hospital treatment.

“This is more evidence of the dangerous, addictive threat vaping poses to Australians of all ages, including young people who may not realise they’re gambling with their health,” she said.

“E-cigarettes or vapes might smell sweet and look benign, but research shows they contain up to 200 chemicals including weed killer and paint stripper. We also know that many of the products claiming to be nicotine-free contain the addictive drug.”

The data shows about one in 10 hospital admissions were for people with mental illnesses, addiction or behavioural disorders, and around one in four people had either a respiratory condition such as asthma, or a heart condition such as high blood pressure. Of all 178 people, 59% were female and 41% male.

Dr David commended the Albanese Government for taking a strong stand against vaping and said its ban on the importation of disposable single use vapes starting this week, 1 January 2024, was a great start.

“Health funds want to protect Australians from the preventable damage vaping causes. We do not want another generation developing nicotine addiction and heart and lung problems like we saw with tobacco. Health funds will continue to work with the Albanese Government on its efforts to eliminate vaping in 2024,” she said.

The hospital admissions cost health funds $1.23 million, with the median claim costing $1,960. One in five hospital admissions were classified as ‘high-cost claims’ exceeding $10,000. Forty per cent of the hospital admissions were in New South Wales, followed by 28% in Queensland, 23% in Victoria, and 3% in both Western Australia and South Australia.

The post Vaping lands 178 people in hospital including children first appeared on Private Healthcare Australia (PHA).

Australia needs tougher laws to protect consumers from unexpected bills in the private health system, where 60 percent of all elective surgical procedures occur, the peak body for private health funds say.

Private Healthcare Australia (PHA) is calling on the Albanese Government to ensure consumers are not held liable for any costs that are not disclosed up-front before their medical treatment, with civil and criminal penalties for breaches.

The call comes as new data shows the median out-of-pocket cost for Australians having common procedures funded by their health insurance have increased up to 300 percent over the past five years. The biggest increases have occurred in hospital fees for heart angiogram procedures and gastroscopies (investigations of the upper digestive tract) where the median out-of-pocket fee has surged from $50 in 2017-18 to $200 in 2022-23.

In a concerning emerging trend, some procedures that previously attracted no out-of-pocket charges have started attracting these costs in recent years. For example, in 2017-18 most procedures had no out-of-pocket fee for cataract surgery or a cystoscopy (an investigation of the bladder). They now attract a $100 and $200 median out-of-pocket fee respectively.

PHA CEO Dr Rachel David said there is currently no way of knowing if these out-of-pocket costs were fully disclosed to consumers before they had their procedures, however anecdotal reports suggest some people are still getting shocked by bills worth hundreds of dollars after their treatment. These bills can come from the hospital, medical specialists, or pathology and diagnostic services they encountered.

“Australia needs to follow international best practice and introduce tough laws to protect consumers from surprise billing for healthcare services. For example, there was bipartisan political support for the ‘No Surprises Act’ in the US, where consumers can confidently proceed with healthcare knowing they won’t get a financial shock at the end,” she said.

“Fifty-five percent of Australians are paying for private health insurance. These people are contributing to their own healthcare and taking pressure off our stressed public hospital system. They should be guaranteed protection from unanticipated costs.”

“Inevitably, some procedures may result in unexpected complications, but a proper informed financial consent process ensures patients are made aware of this possibility prior to surgery.”

“Ideally an up-front quote should be provided which includes all likely out-of-pocket costs from the providers involved in the patient’s care. If we can do it for car and home repairs, there is simply no valid reason why this can’t happen for medical treatment.”

“In the current cost-of-living crisis, we must do everything we can to reduce the cost of medical treatment for Australians who are increasingly relying on private health insurance to get fast access to private healthcare and avoid public hospital waiting lists.”

Most hospitals have entered agreements with health funds to reduce out-of-pocket costs for their customers. Recently, there has been a decline in patients with private health insurance treated in hospitals without an agreement. However, day hospitals are not on average moving with this trend. Day hospitals charge patients significantly higher out-of-pocket hospital fees than other private hospitals.

There are four major types of surprise billing:

• High out-of-pocket charges not disclosed beforehand.
• Split billing where the full cost of the service is not disclosed to various payers including the consumer, their health fund and Medicare.
• Charges that are related to the service but are not described as part of the service. For example, a doctor or hospital seeks to increase their income by charging a “booking” or an “administration” fee.
• Change of scope during service. For example, where a complication in surgery required an unexpected intervention. Appendix provides recent examples.

Private health insurance data on median out-of-pocket fees charged for the most common medical procedures funded by health insurance in private hospitals.

Appendix: Billing behaviour examples

Example one

A surgeon charges a patient $500 out-of-pocket cost for a surgery, payable before the date of surgery. The surgeon then bills $600 for the surgery under a “no gap” agreement with the health fund, where Medicare pays $300 and the health fund pays $300. The patient does not receive another bill as it is handled by the health fund and the hospital.

Both Medicare and the health fund believe the patient has not paid a gap, and Medicare statistics record zero out-of-pocket costs. While government figures the costs of the surgery to be $600, the actual cost is $1100 with a large out-of-pocket payment. Under the proposed changes, this would not be legal and all amounts charged need to be disclosed to each payor.

Example two

A doctor tells the patient they are not charging a gap fee for a procedure and receives a larger rebate from the patient’s health fund. However, the surgical assistant charges a large out-of-pocket cost and splits the extra payment with the primary surgeon. Under the proposed changes, this would not be legal and all amounts received need to be disclosed to each payor.

Example three

A patient receives a bill from a surgical assistant but was not informed that there would be a surgical assistant for the procedure. Under the proposed changes, the patient would not be liable for any out-of-pocket costs for services where the service was predicted.

Example four

During surgery, the doctor discovers another problem which means the operation is much more complex than anticipated. In this instance, the patient is liable for additional costs.

Read PHA’s policy paper Combatting Surprise Billing in Australia here.

The post Health funds call for ‘surprise billing law’ as new data reveals soaring out-of-pocket costs for medical procedures. first appeared on Private Healthcare Australia (PHA).

The introduction of Medicare forty years ago marked a turning point in Australian healthcare. Australia’s dual public-private health system has enabled better access to, and affordability for healthcare for millions of Australians. Supported by a strong private sector, Australia’s health system has delivered world class health outcomes.

Private Healthcare Australia CEO Dr Rachel David said a successful universal health scheme requires a strong and vibrant private scheme to increase funding for healthcare, promote equity, provide choice and ensure that the most vulnerable Australians are able to access care.

Private health insurance was intentionally included in the design of Medicare. Former Health Minister Dr Neal Blewett told Parliament in 1984 that “there will be substantial opportunities for the private funds to supplement the public fund with forms of hospital cover and to provide a wide range of ancillary covers.” Prime Minister Bob Hawke later endorsed the private system as a “fundamental and essential part of our health care system”.

“Millions of Australians have embraced the private system, which complements Medicare as a vital component of Australia’s health system over the past 40 years. It plays an important role for policy holders and the community more broadly, by freeing up the public system for those who need it most.”

Private health insurance membership is at a record high and 14.7 million Australians (55 percent) have some form of health insurance. Private hospitals perform 60 percent of elective surgery in Australia and 55 percent of mental health hospital admissions.

“It is this balance between public and private that has contributed to the success of Medicare. In contrast, the United Kingdom (mostly publicly funded) and United States (mostly privately funded) are at extreme ends of the spectrum and both plagued by ongoing healthcare crises.”

A 2023 review of mortality rates for avoidable or treatable conditions (a key indicator of health system performance) by The Kings Fund ranks Australia the best in the world. The UK and US were the worst performers in a league table with comparable economies.

Forty years on, Australia still has one of the best health systems in the world – but Medicare is due for its mid-life health check. Australia’s healthcare needs and treatment options have changed since the advent of Medicare, and the health system must keep pace.

Australians born in 2024 can expect to live almost a decade longer than those born in 1984. When Medicare was introduced the population’s combined life expectancy was 75 years, in 2024 it’s 84 years.

“The combination of an ageing population, rise in chronic disease, medical workforce challenges, cost of medicines and medical devices, and skyrocketing health inflation has put pressure on our health system.

“The Albanese Government should be applauded for introducing measures to modernise Medicare including urgent care centres, the tripling of the bulk-billing incentive to encourage more free GP services, and the 60-day dispensing rule to reduce the cost of medicines.

“But with health expenditure rising unsustainably and cost of living hitting hard, more needs to be done to reduce unnecessary costs and keep our health sustainable.”

Key areas for reform:

• Stamp out fraud through continuous monitoring of bulk-billing rates and out of pocket costs.
• Increase payments for GPs to include health fund contributions, so GP clinics can expand their services and keep more people out of hospital.
• Incentivise out-of-hospital care options and shorter hospital stays so more people can receive services in the comfort of their homes.
• Eliminate ‘low value care’ such as surgery for chronic back pain, which is rarely required and usually ineffective.
• Implement a national procurement strategy to drive down the cost of generic medical implants and surgical supplies in the private system. Australians are paying the highest prices in the world for medical devices due to an outdated price setting arrangement with multinational medical technology companies.

The post Medicare has served us well but it’s time for a mid-life health check first appeared on Private Healthcare Australia (PHA).

All specialist doctors’ fees should be published on the Government’s Medical Cost Finder website so consumers know who is charging egregiously, the peak body for health funds says.

The Inquiry into Price Gouging and Unfair Pricing Practices report released today by Professor Allan Fels calls for more measures to crack down on egregious billing by medical specialists who can currently charge whatever they like. The report notes that out-of-pocket fees charged by specialists, such as surgeons and cardiologists, increased by more than 50% in real terms from 2012 – 2022.

This confirms Private Healthcare Australia data released last week which shows out-of-pocket costs for common procedures in private hospitals increased up to 300% over the last five years, well above inflation. Patients have also shared stories of paying up to $23,000 out-of-pocket for some operations, and as much as $800 for a surgeon to review them after their operation.

The Fels report says “some of the highest price increases occur in sectors which are characterised by having disproportionate market power, a level of power over their consumers…”. PHA CEO Dr Rachel David said this was especially relevant in healthcare.

“When people receive a serious clinical diagnosis, they are at their most vulnerable. There is a massive information asymmetry between a medical specialist and the average consumer, which can easily be exploited,” she said.

“This is precisely the time patients need access to accurate information about the costs they are facing as part of informed financial consent, preferably with an upfront quote for the services they will likely require. If we can quote for home and car repairs, there is no valid reason why this can’t be done for medical procedures.”

The Commonwealth’s Medical Cost Finder website was designed under the previous Government to give consumers information about typical costs for more than 100 medical procedures, but to date it has failed to deliver.

The previous Government promised consumers would be able to check how much individual doctors charge, to give them choice. Unfortunately, price disclosure by doctors has been voluntary, and despite an extensive campaign, the vast majority of doctors have failed to sign up.

“It’s time for the Government to intervene and publish doctors’ fees. The Government has this data, they are just choosing not to publish it,” said Dr David.

“Consumers and their GP can then make an informed choice about which specialist doctor to choose based on their skills, qualifications, and price.”

In addition, consumers should be told that they can go to any specialist with their GP referral. They do not have to go to the doctor named on their referral if they would prefer someone else.

“Many consumers assume that paying more for treatment guarantees a better outcome. This is rarely the case. In Australia, where medical training is rigorous, most doctors with equivalent qualifications perform at the same level, and paying more does not mean you’re getting ‘the best’,” Dr David said.

PHA also wants the Government to enhance Consumer Law by implementing ‘surprise billing’ legislation. A ‘surprise billing law’ will protect consumers from unexpected bills for healthcare services. This would ensure Australian consumers are not held liable for any costs not disclosed up-front before their medical treatment, with civil and criminal penalties for breaches.

Further, the egregious practice of charging additional fees to bulk billed patients needs urgent investigation. The practice of bulk billing and charging a separate gap for the same service is both prohibited in legislation and illegal as tested in Australian courts ¹, yet it still takes place.

“In the current cost-of-living crisis, there is no justification for powerful vested interests to engage in price gouging. We must do everything we can to reduce inflated out-of-pocket costs associated with medical treatment and ensure Australians have the tools to make informed choices about their healthcare,” Dr David said.

[1] Dalima Pty Limited v Commonwealth of Australia Unreported, NSWSL, No 25304/87, 22 October 1987; Suman Sood v Regina [2006] NSWCCA 114.

Media contact: Jen Eddy, 0439 240 755

The post Price gouging doctors should be named and shamed first appeared on Private Healthcare Australia (PHA).

A report on the front page of ‘The Australian’ newspaper suggesting the health insurance industry is in a ‘war of words with Mark Butler’ and in ‘fear’ about the timing of the premium announcement is false.

The ‘health insurance row’ referred to in the report is a fiction and ‘six of the nation’s largest health funds’ have not commented publicly on the premium setting round as reported. Our industry has not accused the Government of anything as suggested in the header.

The Australian claims to have:

“spoken to six of the nation’s largest funds who say it is the longest wait on a premiums call from a government in 15 years, and they do not have enough time to notify their customers of any price increases if Health Minister Mark Butler does not make a decision this week.”

As the peak body representing 98 per cent of the health insurance industry on membership, Private Healthcare Australia was advised by the six largest funds that this assertion is untrue. ^*

This story is a beat up which will do nothing more than create unnecessary fear among customers. It is an attempt to politicise a detailed financial and bureaucratic process.

Australian health funds will provide customers with timely notification of any increase or adjustment to their private health insurance premium. This is essential to ensure customers can manage their financial planning as cost of living pressures increase.

Health funds have a strong track record when it comes to keeping customers informed of pending changes to policies and premiums, as demonstrated repeatedly during the COVID-19 pandemic.

While health funds generally adjust premiums on 1 April each year, this is not a legislative requirement. This was evident during the pandemic.

Private Healthcare Australia CEO Dr Rachel David said “health funds have been working co-operatively with the Federal Government and sector regulators on premium pricing to ensure the additional burden on consumers is as low as possible given the impact of the cost of living crisis.

“We need to be careful, however, to ensure our health providers are appropriately remunerated for increases in recruitment, power and food because like the rest of the economy, they have been impacted by inflation.

“Premiums increase because the cost of healthcare is increasing. The health system is not immune from inflation. We anticipate from industry data the premium increase will be below CPI,” said Dr David.

* PHA contacted Medibank, Bupa, HCF, HBF nib and Australian Unity. Only Medibank provided a written comment to The Australian which was not reported.

Media contact: Jen Eddy, 0439 240 755

The post Statement from Private Healthcare Australia – PHI Premiums 2024 first appeared on Private Healthcare Australia (PHA).

Australian health funds paid a record $23.6 billion for healthcare in 2023 as claims by health funds members hit a new high, exceeding pre-pandemic levels.

Health fund membership is also at an all-time high with over 14.73 million Australians choosing private health cover. This follows 14 consecutive quarters of membership growth. The pandemic brought home the value of private health insurance for consumers, which is to access surgery at a time of their choosing and inpatient mental healthcare when and where they need it.

APRA’s quarterly report, released today, shows benefits paid by health funds in 2023 totalled $23.6 billion, an increase of 10.2 percent over the previous year. Health funds paid $17.3 billion in hospital benefits, up 11.1 percent on 2022, an increase of $1.73 billion. Extras benefits paid for members totalled $6.16 billion, up 7.6 percent on 2022, or an additional $435 million.

Hospital services totalled 4.92 million, up 9.2 percent on 2022, representing an additional 414,000 hospital episodes. Extras services also hit a record high of 102.4 million for services including dental, optical and physiotherapy, up 6.4 percent on 2022.

Private Healthcare CEO Dr Rachel David said, “Australian health funds are doing everything they can to deliver the best possible value for members at a time when the public hospital system is still struggling to recover from the impact of COVID-19.”

“With health inflation spiralling, and cost-of-living hitting members hard, we therefore need to double down on addressing affordability and stamping out waste. This is critical as claims growth returns to pre-COVID levels.

“The inflated price of generic medical implants and surgical supplies continues to be a challenge. It remains a major factor pushing up costs for heath funds and impacting premium affordability. Furthermore, the number of medical device claims per surgical procedure is continuing to grow disproportionately as a consequence of the sales and marketing activities of the multinational suppliers of these items.

“Health funds paid a record $2.36 billion in medical device benefits in 12 months to December 2023. A four year analysis of APRA data shows the number of medical devices funded by health insurers since the start of the pandemic has surged by 12 percent. This is totally out of proportion to the 2 percent increase in medical services and the 4.7 percent increase in hospital episodes over the four years to December 2023. There is no change in clinical practice that adequately explains this rate of growth.

Australians are paying the highest prices in the world for medical devices – 30 -100 percent more than comparable countries.

“The health sector is not immune to inflation. In addition to the rising costs of health and medical services, like other sectors, health funds are managing increased employee costs, operational and administration expenses, including surging costs for cybersecurity and major IT projects. Management expense ratios for health funds at 10.8 percent compare with 22.6 percent for general insurance.

“Health funds have returned more than $4 billion to members since the start of the pandemic and many funds are still providing cash backs to members as part of their promise not to profit from lower claims during the pandemic. The ACCC confirmed funds were on track to return $4.3 billion to members.

“APRA data shows that health funds on average return 86 cents in every premium dollar back to members in benefits in 2023. In comparison, the general insurance sector on average returned 65 cents in every premium dollar back to members.

“Cost-of-living is hurting, and keeping premiums affordable is a top priority. This requires commitment from regulators and providers to reduce waste in our health system and introduce regulatory changes to increase access to out-of-hospital care and provide flexible, convenient models of care that health fund members expect and deserve,” Dr David said.

Policy measures needed to keep our health system sustainable include:

• Bring the Australian prices of generic medical implants and surgical supplies back in line with global market prices.
• Introduce a Code of Conduct to monitor the sales and marketing activities of big surgical supply companies in Australia, to bring it in line with the pharmaceutical industry.
• Remove low value and harmful medical devices and services from the market as soon as the supporting clinical evidence becomes available.
• Allow health funds to pay for evidence-based out-of-hospital care models provided by all health professional types, in addition to allied health professionals.
• Improve monitoring of out of pocket costs for specialist medical care to enable consumers and their GP to choose an affordable specialist if that is what they want.
• Introduce ‘surprise billing’ legislation with penalties for failure to provide informed financial consent for private medical services.

The post Health funds pay record amount for healthcare in 2023 as member claims exceed pre COVID levels first appeared on Private Healthcare Australia (PHA).

Health fund premiums will rise by an average 3.03% this year, much lower than inflation. Premium increases for other insurance types have surged by up to 16%.

Private Healthcare Australia CEO Dr Rachel David said health funds do not want to increase premiums by a single dollar, given the cost of living crisis, and the need for Australians to continue to get rapid access to healthcare.

Inflation however, is driving up the cost of everything health funds pay for. Over the past twelve months, health inflation rose 5.1%, with medical and hospital services (+6.5%) being the main contributor.

“Health funds are walking a tightrope between keeping premiums as low as possible to maximise access to private health, and providing adequate funding for hospitals and frontline health workers to deliver quality care. Our hospitals need to pay significantly more for staff recruitment, power and food and the funds need to be able to cover these costs. Health funds are also paying more for essential services like cyber security and IT services to support billing and claims.”

The premium rise also follows a 10% jump in health insurance payments for member claims over the past year. The average health insurance premium rise falls well short of other rising household costs including:

• Home and contents, and car insurance – up 16.2%
• Rent – up 7.3%
• Electricity – up 6.9%
• Hairdressing – up 6.4%
• Food and non-alcoholic beverages – up 4.5% (see graph below)

Health insurance continues to provide more value for consumers than any other type of insurance. For every premium dollar paid, 86 cents is returned to members. For general insurance, such as home and contents and car insurance, the return is 65 cents in the premium dollar.

“Australians recognise the value of private health cover. Since COVID, more than one million people have joined a health fund to access quality, timely healthcare, including elective surgery and mental health treatment which can be hard to access in the public health system,” Dr David said.

“Membership is at record levels with 55% of our population covered. That means claims are also increasing. Both hospital and extras claims have skyrocketed in the past year, exceeding pre-pandemic levels.  The latest APRA data shows in the year to December 2023, health funds paid a record $23.6 billion for claims – 10% more than the previous year.”

“Our strong private system is taking pressure off the public system, so public hospitals are free for those who need them most. Health funds are now paying for two thirds of all elective surgery procedures in Australia including over 80% of hip and knee replacements and over 70% of cataract surgery in the private sector. But in the current economy, it is becoming more challenging to keep private hospital care sustainable without increasing premiums.”

“We know Australians are doing it tough and that many of our members are not wealthy. Forty percent have a taxable income of $50,000 per year or less and 10 percent of these people are on the aged pension as their only income. They are choosing to contribute to the cost of their own health care, which in turn takes pressure off our stretched public hospitals.”

“Health funds demonstrated their commitment to members during COVID, promising from the outset to return all funds accumulated during lockdowns. The recent ACCC report to the Senate on private health insurance confirmed this commitment had been met. It noted that give backs will total over $4.3 billion, exceeding assessed permanent claims savings of around $4.1 billion.”

But more can be done to reduce costs for consumers. We need policies to:

• Bring the government-regulated cost of generic medical implants and surgical supplies back in line with global market prices. Australians pay 30 – 100% more than people in New Zealand, the United Kingdom, France, and South Africa for commonly used generic medical devices due to an outdated price setting arrangement with multinational medtech companies.
• Remove low value care and harmful medical devices and services from the market as soon as clinical evidence reveals a problem. For example, surgery for chronic back pain is rarely required and usually ineffective, but it is still being done.
• Permit health funds to pay for evidence-based out-of-hospital models of care. Australia lags comparative health systems in the delivery of out-of-hospital care despite evidence showing it is safe and effective for many treatments and that consumers support it.
• Stamp out fraud through continuous monitoring of bulk billing rates and out-of-pocket fees for GP and specialist medical care.
• Introduce US-style ‘Surprise Billing’ legislation to ensure consumers are not liable for fees they have not agreed to before a procedure. This should include civil and criminal penalties for breaches.

“Now more than ever, with cost-of-living pressure and rising healthcare costs, we need all healthcare stakeholders to pull in the same direction to keep our health system sustainable,” Dr David said.

Media contact: Jen Eddy, 0439 240 755

The post Health funds keep premium rise under inflation but rising costs remain a challenge first appeared on Private Healthcare Australia (PHA).

An investigation by ABC Four Corners into spinal surgery has exposed serious risks to patients and the shocking extent of fraud, waste and abuse in Australia’s ‘back pain industry’.

Private Health Australia (PHA) CEO Dr Rachel David said:

“As a result of the Four Corners expose, PHA will immediately ask payment integrity experts within our health funds to investigate allegations of fraud, waste and abuse in spine surgery for back pain. We expect the Department of Health and Aged Care (DoHAC) will launch its own investigation as a matter of urgency and we’ll be seeking confirmation of this.”

“Four million Australians are living with chronic back pain. Despite evidence spinal fusion is no more effective than non-surgical treatments such as exercise and often results in complications, more and more Australians including the elderly are undergoing this high risk procedure.”

“Low value care is both dangerous for patients and a drain on our health system. Research has repeatedly pointed to spinal fusion procedures as a major culprit. Not only are these interventions often of little or no benefit to the patient presenting with pain, there is a serious problem with fraud, waste, and abuse in this field.”

The ABC investigation cites a new analysis of private health insurance billing records by medical billing expert Dr Margaret Faux, founder of Synapse, and Kirontech, a UK-based software company specialising in detecting fraud, waste and abuse in medical payments systems.

The report assesses payment integrity for spinal surgery billing (spinal fusions and decompressions) in Australia using de-identified data from six private health funds representing 25% of the market (23,000 patients who had undergone spinal surgery between November 2017 and May 2023).

It identifies shocking trends in Australia’s ‘back pain industry’ – billing for services not provided, billing for add-on services not done, admitting patients to intensive care unnecessarily, providing and billing patients for services they don’t need and are potentially harmful.

Surgeons were billing for implausibly short periods of time – three surgeries in 30 minutes – which suggest the surgeries billed were not performed. One anaesthetist claimed a 14-hour anaesthetic time for a spinal decompression and fusion, while others involved in the same surgery claimed the procedure lasted less than an hour.

“Australian health funds are required by law to pay claims Medicare has paid and are therefore reliant on government to prevent fraud, waste and abuse. The Government’s own review into Medicare Compliance and Integrity found that Medicare is haemorrhaging billions of dollars a year in waste.”

“Eliminating low value care such as fusion surgery for chronic back pain which is rarely required and usually ineffective, will allow health funds to pass on savings to consumers via lower premiums and divert funding to treatments that have actually been proven to work for back pain.”

“With cost of living escalating and pressure increasing on family and government budgets, it is crucial the government and payors work together as a matter of urgency to restore trust in our medical payments system.”

“Every dollar should be spent ensuring high quality health outcomes for Australians, not squandered through fraud, waste or abuse of the system”.

Media contact: Jen Eddy, 0439 240 755

The post Fraud, waste and abuse rife in Australia’s ‘back pain industry’ first appeared on Private Healthcare Australia (PHA).

Private Healthcare Australia (PHA) is calling for the immediate recall and suspension of spinal cord stimulators to protect public safety, pending an investigation by the Therapeutic Goods Administration.

This follows revelations by ABC Four Corners that spinal cord stimulation, also known is neuromodulation, is no better than a placebo and is causing severe harm to patients with chronic back pain.

The Department of Health has the capacity to suspend or cancel registration of medical devices from the Australian Register of Therapeutic Goods under s41KA of the Therapeutic Goods Act 1989, if ‘there is a potential risk of death, serious illness or serious injury’.

The Four Corners investigation exposed the dangers to patients from this expensive, high-risk procedure and the appalling rate of fraud, waste and abuse in Australia’s ‘back pain industry’.

Spinal cord stimulators are devices implanted into the back during surgery to send low levels of electricity directly into the spine in an attempt to achieve pain relief. People with chronic back pain pay on average $58,000 for the surgery, which has no sustained benefit that outweigh the costs and risks, according to two respected Cochrane Reviews.

PHA has submitted data from 5,852 patients over a 10-year period to 2021 for academic review. This found 27% required surgical reintervention within one year and 41% within three years. This compares with a three year revision rate of 2.7% for hips and 2.4 % for knee replacements.

PHA CEO Dr Rachel David said at least 90 percent of spinal cord stimulators are inserted in the private sector.

“Australians should be confident they are receiving safe, high-quality, healthcare which is value for money.”

“These devices were introduced to the Australian market decades ago in the absence of any high-quality clinical trials or health technology assessment evaluation proving their value or effectiveness. The latest medical evidence has discredited this procedure which should be immediately removed from the Medicare Benefits Schedule (MBS), and all spinal cord stimulation products removed from the Prescribed List of Medical Devices.”

“Four million Australians are living with chronic back pain. They deserve accurate information about the risks and benefits of available treatment options, as there are treatments that are proven to work.”

“We’ve seen the devastating impact of harmful surgery on Australians through the recent high profile scandals involving use of hernia mesh for pelvic organ prolapse and metal-on-metal hip implants. Thousands of people suffered and yet this has not led to the policy and regulatory changes necessary to guarantee consumer safety. We need urgent action to protect Australians with back pain from a similar experience.”

“The fact current Federal Government regulations compel health insurance funds and other health payors to pay for treatment we know to be harmful is scandalous.”

“The report also highlighted serious shortcomings in the reporting of adverse events to the Therapeutic Goods Administration (TGA). Medical device manufacturers are required to notify the TGA when a serious adverse event is caused by a medical device. This is clearly not happening.”

“A 10 year review of the TGA database for adverse events found that more than 2000 adverse events related to spinal cord stimulation had been reported during the period, but PHA data shows the real number is much higher. In the US, spinal cord stimulators have the third-highest number of medical device injury reports made to the Food and Drug Administration. Medical technology companies in Australia who fail to report adverse events to the TGA are breaking the law and must be held accountable.”

PHA is calling for the introduction of an ACCC authorised Code of Conduct for the medical technology industry which aligns with the code of conduct for pharmaceutical companies, where Medicines Australia discloses support, incentives and other benefits provided to prescribing doctors.

“We need improved controls on medical device company representatives entering clinical areas, including informed patient consent for their presence, and full disclosure of any benefits they provide to doctors or hospitals. An ACCC authorised Code would help ensure that decisions about the use of medical devices are fully transparent, and solely based on clinical considerations.”

“Poor policy and inadequate regulation of medical devices and surgical supplies is driving low-value and harmful care at great expense to consumers and Australia’s health system.”

Media contact: Jen Eddy, 0439 240 755

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