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Yes, it is difficult to know what impact this will have on LHC....

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Pycnantha

174 Posts.

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26/05/16

23:03

Post #: 17879261
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Originally posted by SA1588 ↑

I am not sure of the implications for LHC

Applied Medical criticises government pricing

THE AUSTRALIAN

12:00AM MAY 26, 2016

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Sarah-Jane Tasker

Reporter
Sydney
https://plus.google.com/109975179297660562731

US-based medical devices major Applied Medical has warned that competition in Australia’s health system is suppressed, calling for the scrapping of the controversial list that designates the pricing of prostheses that qualify for insurance rebates.
Applied Medical founder Nabil Hilal, who failed in his attempt to sue the health minister last year over the inefficiency of the list, said no other public market in the world operated a system with a government-sanctioned list that set the rebate for medical devices. He also said the government was dictating the price for devices used in private hospitals at many times above what public hospitals pay for the same device.
Mr Hilal said things were further complicated by large manufacturers offering private hospitals a rebate of that inflated price, to encourage them to buy their product.
“Sooner or later the public is going to demand full, honest reform that creates an open market,” he said. “There is no reason for half the Australian market — the public market — to be paying one price and the private market pay four times as much and then charged higher (health insurance) premiums when the country is demanding wider participation of the private market. It is just not sustainable.
“The fix is doing the right thing. We have advocated that there shouldn’t be a list. No one else in the world uses it and the public hospitals don’t use it, so why have it?”
The government uses the Prostheses List to regulate how much health funds have to pay for prosthetics, human tissues and device implants. Private health insurers have long called for an overhaul, claiming premiums could be significantly cut if the list was reformed, but it is unusual for a device manufacturer to come out so strongly against the system.
The federal government said in its budget announcement that the Prostheses List Advisory Committee would be refocused to deliver better value for consumers. Health Minister Sussan Ley said while she continued to work with device manufacturers, consumers and hospitals, ultimately her focus was on doing what was best for the consumer.
“This includes ensuring the price for medical devices in the private sector is fair, reducing the cost of devices without reducing access to them, and we will be treating this as a priority if a Turnbull Coalition government is re-elected,” she said.
Applied Medical was “strongly resisted” in its attempts to be on a previous reform panel asked to review the list, Mr Hilal said. “We don’t have a high level of confidence that this system is going to yield the savings and solutions, and it could instead reintroduce a different set of problems,” he said.
One example Applied has repeatedly highlighted in the debate is the price of a laparoscopic clip applier — disposable 10-clip guns used in keyhole surgery. It sells them globally for about $99 each but they are on the Prostheses List for $412. In most cases, Applied supplies the device to Australian public and private hospitals for $99 but private hospitals invoice insurers for $412, pocketing the difference.
“From a distance, I don’t understand the workings of the Australian government or why hundreds of millions of dollars in savings are being ignored,” he told The Australian from his US base.
Opposition health spokeswoman Catherine King said she would await the outcome of the review before acting on it, adding that arguments from all sides of the debate had been strongly put to her.

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Yes, it is difficult to know what impact this will have on LHC. My feeling is that it will probably be superficial.

It comes down to how much direct competition there is from comparable products. If there isn't much then we get to keep our margins. LHC's catalogue has been popular with surgeons, so I think the risk is small minimal.

It is a shame anyhow, I got into this stock because it recession proof.
LHC Price at posting: $1.65 Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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