Health minister Greg Hunt struck a deal with device manufacturers in 2017 to bring down the costs of their products,following years of complaints from health funds that prices on the list are significantly higher than what is paid in the public sector and in comparable countries.
The agreement was to save health funds $250 million this year,and $1.1 billion by 2021,and in return insurers agreed this year to the smallest increase to their membership fees in 17 years.
But insurers now say their bills for medical devices only fell by $13 million last year,not the $250 million promised,because of an 19 per cent increase in the volume of"general and miscellaneous"items used in hospitals,
Insurer lobby group Private Healthcare Australia said rebates for these items - including skin glues,sponges and temporary tubes - increased 19.2 per cent last financial year,even as the number of surgeries carried out rose only 0.3 per cent.
The group alleged manufacturers redesigned some products to maximise revenue,by cutting the container size of skin glues for instance,or by increasing the number of items sold in bundles.
A spokesman for Mr Hunt said the review would"ensure the cost of these medical devices is appropriate and that firms are not inappropriately bundling items together".