Post-market Review Products Used in the Management of Diabetes Report to Government Stage 2: Insulin Pumps February 2015

2.7 Access to insulin pumps via the Type 1 Diabetes Insulin Pump Programme

2.7.1 Type 1 Diabetes Insulin Pump Programme

The Type 1 Diabetes Insulin Pump Programme (the Programme) is managed by the Department of Health and administered by the Juvenile Diabetes Research Foundation (JDRF). The Programme, introduced in 2008-09, aims to increase the affordability of insulin pump therapy for low-income families without private health insurance that have children under 18 years of age who would benefit from insulin pump therapy to control their type 1 diabetes. JDRF offered an insulin pump programme prior to 2008, which provided about 20 pumps per year, and submitted the proposal for the current Programme. The pumps available under the Programme are generally those on the Prostheses List, which is managed by the Department.

The Programme also funds part of the cost of insulin pump consumables for pumps provided under the Programme. These are supplied through the National Diabetes Services Scheme (NDSS), which is funded by the Australian Government and administered by Diabetes Australia. All NDSS registrants with type 1 diabetes are able to access subsidised insulin pump consumables through the NDSS, with the cost of consumables being the same for Programme recipients and other registrants.

2.7.2 Programme access arrangements

Families accessing a subsidised insulin pump under the Programme are able to choose any of the insulin pumps on the Prostheses List as recommended by an endocrinologist or specialist physician who has been approved by JDRF. As at February 2014, there were six¹ insulin pumps on the Prostheses List available to access. If a clinically recommended insulin pump is not listed on the Prostheses List, the cost of the pump, and the subsequent subsidy amount, will take into account the recommended retail price of the pump, and the minimum benefit amount for comparable pump on the Prostheses List.

The Programme provides a subsidy between $500 and $6,400 for families that meet the means-tested income requirements. The applicant’s family income determines the level of subsidy for the insulin pump on a sliding scale up to a maximum of 80% of the listed minimum benefit amount on the Prostheses List or $6,400, whichever is less. Conversely, the minimum subsidy is 10% of the cost of the pump or $500, whichever is greater. For example, families with an income equal to or less than $71,230 (2013-14, indexed annually) will receive a subsidy amount between $3,200 and $6,400, depending on the insulin pump selected. Families with an income of $101,653 (2013-14, indexed annually) will receive a subsidy amount between $500 and $950, depending on the insulin pump selected. Families with a household income over $101,653 (2013-14) are not eligible for subsidy. Figure 1 describes the subsidy and co-payment relationship to the family income for the most commonly supplied insulin pump valued $9,500. Further detail on the Prostheses List is outlined in Part 2.8. Discussion on the limitations of the Programme link to the Prostheses List is detailed in Part 5.6.2.

Low-income is defined from the base rate of Family Tax Benefit Part A with one child between 13 and 15 years of age. This low-income figure is currently $71,230 (2013-14) household income per annum and does not vary with the number of children in the family. However, the Programme provides a concession for families with more than one child with type 1 diabetes by applying the calculated subsidy for the first child and the maximum subsidy for subsequent children. The low-income salary benchmark has been indexed in line with the changes to the Family Tax Benefit Part A since the Programme commenced.

Figure 1. Relationship between the patient co-payment, subsidy amount, and family income for the most commonly supplied insulin pump under the Programme valued at $9,500.

2.7.3 Patient co-payment

When the Programme began, the maximum subsidy provided under the Programme was $2,500 per pump. Due to low uptake, this was increased in February 2010 to $6,400, to meet consumer expectations, and to reach the Programme’s objectives.

The maximum-capped subsidy of $6,400 was based on 80% of the cost of the most expensive (and most clinically recommended) insulin pump available, prior to an increase in the minimum benefit cost of the insulin pumps on the Prostheses List on 1 August 2012. Subsequently, the cap of $6,400 no longer equals 80% of the most expensive pump, which currently costs $9,500. The patient co-payment, was designed to be equal to or greater than the cost of holding private health insurance for 13 months (just over the period necessary to qualify for an insulin pump under private health insurance). The median co-payment paid by recipients under the Programme is $1,600 (JDRF data).

To aid families in covering the patient co-payment, JDRF signed agreements with the Princess Margaret Hospital in Perth, the Canberra Hospital, Diabetes Queensland, and the Australian Diabetes Council in March 2011. They agreed to provide funding to cover the co-payment gap, the remaining 20% of the cost, for eligible families. In October 2011, two key insulin pump manufacturers commenced subsidising the copayment gap amount for families in the lowest income bracket, which was an annual income below $67,398 in 2011-12, and is currently $71,230 (2013-14).

2.7.4 Programme funding status

The original Programme funding amount of $5.5 million was approved for pumps and consumables for the four-year period to 2011-12. This was continued with additional funding for the four-year period to 2015-16.

The uptake for the Programme was greater than predicted in 2012-13. On 18 October 2013, the Australian Government provided an additional $870,400 in funding for 201314 for the Insulin Pump Programme, to clear the waiting list of up to 136 families waiting to have their application processed for financial support to purchase a pump. Programme funding now totals $7.1 million over four years from 2012-13 to 2015-16. As at February 2014, the delivery of insulin pumps had recommenced with 466 insulin pumps provided under the Programme since it began.

This Review aims to explore long-term measures to maintain the ongoing efficient and effective use of funds under the Programme. JDRF has campaigned since September 2012 to increase funds for insulin pumps and made a joint submission with Diabetes Australia to the Insulin Pump Review.

According to a survey included in the AIHW report, Insulin Pump Use in Australia (2012b), 88% of respondents indicated that when purchasing their current or previous insulin pump, they received some sort of financial assistance; while the remaining 12% borrowed an insulin pump, paid for the entire cost of the pump themselves, or were unsure of the funding arrangements for their pump. Of those who received financial assistance, 97% had private health insurance, 3% indicated a Commonwealth Government subsidy and 2% a JDRF grant. A number of respondents indicated more than one type of funding. It is likely that the government subsidy and JDRF grant both relate to funding through the Insulin Pump Programme.

Specific aspects of the Programme are discussed further in Part 4, Part 5 and Part 6.