The Prescribed List is buckling under the weight of its own reform

Hospitals shouldn’t need to beg insurers to pay for lifesaving surgical tools. But that’s exactly what’s happening in the aftermath of the reforms to the Prescribed List — a once-stable policy instrument that is now riddled with complexity, delay, and dysfunction.

In CHA’s recent submission to the Department of Health and Aged Care, Catholic Health Australia (CHA) highlighted serious concerns with the review of surgical guides and biomodels — critical technologies used in complex surgeries like craniomaxillofacial reconstruction. These tools reduce surgical time, improve precision, and enhance recovery. But instead of investing in innovation, the review proposes benefit cuts based on questionable economic modelling, flawed assumptions, and comparisons to public sector prices that ignore how private hospitals actually operate.

This review is just one of many that paints a bigger picture of an outdated policy framework.

Across the board, the Prescribed List — the mechanism by which private hospitals are reimbursed for the cost of medical devices — is being slowly but systematically stripped of its value. Reforms, introduced under the guise of cost containment, have already delivered hundreds of millions in savings. Yet patients have seen no reduction in their premiums, and hospitals are now absorbing more of the costs to deliver the same level of care.

Worse still, new devices are increasingly difficult to list, with an administratively burdensome process that is out of step with the pace of medical innovation. In many cases, patients can now access better, more advanced devices in public hospitals than they can in the private system — a reversal of the very purpose of private care. Decisions appear more susceptible to political influence than to clinical evidence, and the rules shift mid-game — making it hard for hospitals, clinicians, or industry to plan ahead with confidence.

The review of surgical guides and biomodels is just the latest chapter in this story. It reveals a system that has lost sight of its purpose: to ensure patients have timely access to safe, effective medical technologies. When consultants recommend slashing benefits for tools that have already seen price reductions, it’s clear the policy framework is no longer fit for purpose.

Reform must continue

This is not a call to abandon reform. It is a call to do it better. A sustainable funding system must balance cost control with access, and efficiency with innovation. That means more transparent processes, clinically informed decision-making, and a pathway for new technologies that doesn’t take years or leave patients footing the bill.

The Prescribed List reform was meant to deliver value — for patients, payers, and providers alike. But instead of balance, we’ve seen a transfer of financial risk to hospitals, increased red tape, and growing uncertainty for those on the frontlines of care.

When fibrin sealants were recently struck from the Prescribed List, it wasn’t because they’d suddenly lost their clinical value — it was because they were easy to cut. Never mind that these haemostatic agents are vital in preventing bleeding and complications during surgery. Never mind that surgeons still rely on them every day. Without a new funding mechanism that can ensure certainty and structure, it’s up to hospitals to absorb the cost or insurers to agree to pay — and neither is a sure thing. It’s reform by abdication, with patients and providers left to navigate the fallout.

CHA has raised similar concerns over proposed reforms to the funding of cardiac technical services — the annual servicing and programming of implantable cardiac devices like pacemakers. These critical services are currently covered by the Prescribed List, ensuring that hospitals can provide continuous, safe care for patients. But with the proposed cuts, hospitals would be forced to shoulder even more costs or negotiate with insurers for support. This could jeopardise access to specialist support, particularly in public and regional hospitals that don’t have the resources to deliver these services in-house. Instead of improving patient care, these reforms would further fragment essential services, putting cost-cutting before patient safety.

General Use Items are vital to modern surgery

Catholic Health Australia also weighed in on the review of General Use Items (GUIs), calling out the flawed, anecdotal reasoning behind the assumption that higher utilisation equals waste. Just months after the Minister for Health and Aged Care decided to keep GUIs on the Prescribed List, the review flagged rising per-episode use as a problem — without considering the clinical complexity, innovation, or advancements in surgical techniques that drive this increase. GUIs, including everyday essentials like haemostatic agents and sealants, are vital to modern surgery. Yet, once again, the focus is on cutting costs, not understanding the full clinical picture.

Submission after submission exposes a troubling pattern that points to a deeper flaw in the current reform process: policy driven by spreadsheets, not by clinical reality. It’s a textbook case of prioritising short-term savings over long-term sense, and a clear sign of how disconnected the Prescribed List process has become from the needs of patient care. The outcome? Hospitals and insurers are locked in disputes, access to innovative technologies in the private sector is stifled, doctors are left with fewer options, and patients are caught in the middle.

So, what’s the answer? We need a more sustainable and patient-centred approach to funding these essential items — one that removes barriers to access and ensures decisions are driven by clinical evidence, not short-term savings. It’s time to overhaul a system that has lost touch with the realities of healthcare delivery.

Let’s stop waiting for government to solve this critical challenge. As the private health sector, it’s time for us to work together to propose a new funding model that supports both innovation and accessibility and puts patient care at the heart of the process. Patients shouldn’t be left to navigate a broken system.

Dr Katharine Bassett is Director of Health Policy at Catholic Health Australia