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Prosthetic claims cause $21 million Medibank blowout

Medibank Private claims a $21 million cost blowout for the insurance claims it paid out last year is the result of the cost of prosthetic devices.

In a statement today, Medibank Private said it’s experienced higher than expected claims due to the cost of hospital visitation and, in particular, the costs of prostheses.

The head of Private Healthcare Australia Rachel David has accused prosthesis manufacturers of deliberately upselling ancillary devices to make up for a government-mandated cut in the cost of core prosthetic devices, which manufacturers have denied.

Medibank CEO Craig Drummond tells Ross Greenwood he’s not entirely sure why the costs have increased.

“If you go back a year ago the government announced some reforms to prosthesis prices, those price reductions have been passed on in the form of lower premiums.

“Unfortunately what’s happened is prosthesis volumes are growing at about… over 9 per cent.

“I’m not going to speculate, Ross, on exactly why that’s the case. All we know from the data that we have is that the rate of growth in prosthesis volumes is significantly higher than it has been over the past three years.”

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But the CEO of the Medical Technology Association of Australia Ian Burgess tells Ross the claim prosthesis costs are being deliberately increased is “simply ludicrous”.

“It fails to ignore the way that our private health system works.

“It’s doctors, surgeons and clinicians that are choosing medical devices to be used for their patients.

“What we’re clearly seeing is a concerted misinformation campaign by insurers.”

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Image: Brendon Thorne/Bloomberg via Getty Images