Media releases

August 4, 2005

Evidence - not entrepreneurialism - to drive medical technology

Australia must dramatically improve the way in which it adopts new medical technology if it is to prevent what could become, in the extreme scenario, an unsustainable medical technology arms race.

Medibank Private managing director, George Savvides, told a Medical Industry Association of Australia conference in Sydney today that the adoption and utilisation of medical technologies needed to be more closely and clearly linked to measurable, evidence-based outcomes.

"Evidence, not entrepreneurialism, should be the key determinant in the adoption of medical technology," he said.

"As Australia's largest health insurer, obviously we should be more than willing to pay a premium for a better health outcome for our members, but we are going to need more research into the cost effectiveness and the clinical evidence supporting new technologies.

"I suspect there's a risk of something of a 'Eureka!' mentality developing in the medical technology industry, where information about technology spreads faster than information about the value of that technology to people's lives."

Mr Savvides highlighted medical prostheses, where costs to Medibank Private on behalf of its members were blowing out at 19 per cent per annum - and proving a major point of tension driving annual health insurance premium increases.

"When we talk about prostheses, we're talking about an expanding range of products designed to give our members a better, longer life, whether they be stents, pacemakers, lenses, replacement joints etc." he said.

"There's no argument about the use of new technology, but the appropriateness of what's chosen or applied must be questioned by medical professionals in each situation," he said.

"From a purely economic perspective, we have to ask how it is that prostheses benefits Medibank Private paid out in 2000 were more than $88m, but last year that figure was more than $213 million.

Mr Savvides said inappropriate promotion and use of technology could distort consumer expectations, unnecessarily increase costs, and in some cases could bring patient harm.

"In medical terms, it's ancient history now, but in 1988 the New England Journal of Medicine reported that 20 per cent of cardiac pacemakers were inserted for inappropriate reasons. In 1994 the Journal of the American Medical Association reported that 23 per cent of children proposed for tympanostomy tube insertion were recommended for inappropriate reasons," he said.

"Our view is that health professionals can work across the sector to target new technology to patient groups likely to benefit most from appropriate technology proven to deliver strong clinical outcomes. In doing so, the overall cost effectiveness of healthcare can be improved.

"Healthcare providers, consumers, manufacturers, and payers should be aligned in the assessment of technology."

Mr Savvides said he supported the Productivity Commission recommendations for an improved health technology assessment process.

He listed three recommendations to the conference: a national tracking system; post-market surveillance to test outcomes; and research into the cost-effectiveness of technology.


For more information contact:
Libby Woolnough, Media Relations Adviser,
Medibank Private PH: 03) 8622 5181 / 0411 659 060

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