Public funding of rTMS treatment in Australia: a long and winding road, to where?

Paul Fitzgerald
14 min readSep 3, 2021
Photo by Hogr Othman on Unsplash


It is unlikely that many people have given much thought to how a new treatment becomes widely available to the public, other than the idea that a treatment needs to be tested in clinical trials. These are very much an important step on the pathway to so called “clinical translation”: the adoption of a therapy into clinical use. However, it doesn’t realty matter how good a treatment is, if someone wont pay for it then it is not going to make much of a difference.

This is a small story from this world: the story of how one therapy, repetitive transcranial magnetic stimulation (rTMS) for depression, achieved public funding in Australia. It is also a cautionary tale of how even with success in this endeavour, there can remain a real sting in the tail. In the following I want to provide a brief history of the process leading up to public funding of rTMS and to outline its implications and unfortunately substantial limitations.

The story begins in 2019, when during a meeting on the 1st and 2nd of August, the Medical Services Advisory Committee (MSAC) within the Department of Health in the Federal Australian government made a recommendation to the Minister for Health that rTMS be approved for funding through the Medicare benefit scheme for patients with depression in Australia. Specifically, the committee supported the implementation of Medicare benefits schedule item numbers to allow reimbursement for rTMS therapy through Medicare. This finding was subsequently ratified at a second MSAC committee meeting later in 2019 and the Federal government allocated an amount of $283 million in the federal budget of the 1st July 2021, to allow implementation of this decision, which we expect will occur in November 2021.

The Long Hall

The journey to public funding for rTMS in Australia, however, really began quite some time ago, in fact back in 2006 with an application by a New South Wales psychiatrist, Dr Bill Lyndon. This was assessed by MSAC with ECT having being nominated as the ‘comparator treatment’ for the purpose of assessment. For some context, MSAC reviews the use of a treatment in the context of a ‘clinical decision pathway’. A new treatment such as rTMS is inserted into a clinical decision pathway and then the evidence for its effectiveness considered in relationship to the treatment that patients would otherwise have been provided. In the context of this 2007 application, MSAC were considering the limited clinical scenario when a patient considered for ECT would be potentially provided rTMS as an alternative. These patients would have failed at least one course of prior treatment (psychological or medication). Therefore, to assess the potential value of rTMS, the committee reviewed studies that compared outcomes from rTMS and ECT treatment, available at the time. This included a group of seven studies with a total of only 233 patients. A number of meta analyses were conducted looking at different outcomes but these only included between two and five studies per analysis.

The committee concluded that “rTMS appeared to be slightly be less effective than ECT in the treatment of major depression, although this was not statistically significant. However, the low sample size was not sufficient to detect small differences in effectiveness”. There was poor data comparing safety of rTMS and ECT although it was concluded that rTMS appeared to be relatively safe in comparison to ECT. Ultimately MSAC concluded that there was insufficient evidence at the time of this assessment to support public funding, a decision which was not necessarily surprising given the limited data available at the time.

As an aside, it is notable that the studies comparing rTMS and ECT conducted until that time, and really most of the studies of this nature ever since, are really limited in their quality and capacity to truly answer the question being asked. Most are too small to show meaningful differences between the two treatments and almost all of the studies are structured in a way to substantially advantage ECT in the comparisons. Most of these studies compare an unlimited number of ECT treatments provided in a flexible way (for example unilateral and bilateral ECT) to a fixed number of only one type of rTMS treatment, in many only 20 sessions done at quite low dose. However, considerable conclusions are often based upon the results of the studies without understanding of these important limitations.

The next attempt to achieve public funding for rTMS commenced in 2011 with an application by Professor Cherrie Galletly, Dr Bill Lyndon, Dr Shane Gill and Dr Patrick Clarke on behalf of The Royal Australian and New Zealand College of Psychiatrists. I inherited husbandry of this application in 2012 and shepherded it through several iterations until it was formally assessed by MSAC in 2014. The process was complicated by the methodology of how the application was collated. Applications to MSAC really have two parts: a clinical justification and a health economics analysis (what are the costs of a new treatment and is it cost effective). I pretty much wrote the ‘clinical case’ for the effectiveness of rTMS. However, I did not have the expertise to do the Health economic analysis or the funds to pay someone to do this. Instead, it was subcontracted by MSAC to an independent academic group (from Griffith University). Ultimately the two halves of the application didn’t necessarily come together well as a complete document. In this application rTMS was compared to antidepressant medication as well as to ECT. Ultimately MSAC declined to approve funding, questioning the available evidence, especially the lack of direct comparisons of outcomes from rTMS treatment in treatment resistant patients. In other words, although there was overwhelming evidence that rTMS is effective compared to placebo or sham rTMS, MSAC was concerned that there was a lack of direct randomised controlled trials comparing rTMS against antidepressant medication (even though we had argued that there was little evidence that antidepressant medication was effective in treatment resistant patients anyway).

Fortunately, this was not the end of the story. Over the next couple of years considerable time was committed to trying to produce a more coherent and integrated application. Initially, repeated discussions were held with the rTMS manufacturer Neuronetics Ltd who expressed interest in supporting an application using their available data and potentially health economic and regulatory expertise. Ultimately, after a lengthy period of time, this did not progress. My next effort was directed towards the Royal Australian and New Zealand College of Psychiatrists. Applications to MSAC typically comes from a company with interest in a new treatment or a professional college, whose members would provide the treatment covered by the proposed item number. Surely, the body that represent psychiatrists who would have the potential for considerable professional gain from the availability of a new treatment item number would be interested in supporting this type of application? I thought this was pretty obvious. Prior to approaching the College, I had a number of discussions with an advisory company (THEMA), seeking their support in an application and needed something in the order of $20-$30,000 to engage them to help put together an integrated application with health economic analysis. Unfortunately, the College did not believe that this was within their remit, possibly influenced by the president at the time who subsequently has been involved in authoring a number of documents which have taken a considerably anti-rTMS stance.

I then came up with plan C. The main issue that had held back commercial investment in obtaining regulatory approval and funding was that no rTMS manufacturer had any form of protected intellectual property. At the time, there were three companies selling rTMS machines in Australia and it wasn’t really in the interest of any one of these companies to provide the funding to support a new Medicare application as it would be in their interest, but also in the interests of their competitors. Therefore, I approached the companies that distributed all three devices with the same proposition: would they, or the rTMS equipment manufacturer, all consider contributing one third of the cost that was required. After some time, all three agreed and we had a pathway forward.

A new application was prepared and submitted in 2018. This was reviewed at the July meeting of MSAC and yet again we did not get approval. However, now there was some hope, and some progress. MSAC accepted that there was “a clinical need and a place for rTMS in the initial treatment, retreatment and relapse of major treatment resistant depression”, but continued to have some concerns about the evidence supporting its use. Instead of rejecting the application, MSAC deferred its decision and requested further evaluation of evidence from two assessments of the value of rTMS, one conducted by the Ontario Health Technology Group and one by the European Network for Health Technology Assessment.

So back to the drawing board we went. And more importantly, back to the potential funders. I asked the same three rTMS distributors for some further funding and re-engaged THEMA to help prepare the next submission. As an aside, THEMA, and especially Dominic Tilden, did a fantastic job with helping these submissions. Our next submission, number 1196.2, was ready and submitted in February 2019. This was the application that ultimately achieved MSAC approval in August of that year.

But the saga wasn’t over yet. The report issued by MSAC following their August meeting indicated that they supported the use of rTMS in the acute treatment of an episode of depression but they sought further information in regards to the role of rTMS in the treatment of patients who had responded to treatment and then experienced a relapse of depression. So yet another submission was prepared — this time summarising the use of rTMS in the treatment of patients who had experienced a depressive relapse — and submitted to MSAC in September 2019. This was reviewed by MSAC in December of that year, which was ultimately the final MSAC review and outcome.

So where did that leave us? Well, first the good news. In both reports of August and December 2019, MSAC accepted that rTMS was a safe and effective treatment for patients who had failed initial trials of antidepressant medication and recommended to the Minister that funding be provided utilising two item numbers: one for the setup of the rTMS stimulation parameters by a psychiatrist and a second one for the actual treatments themselves.

They also recommended the implementation of two item numbers for the same purpose to be used when a patient returned for a second course of rTMS in the event of initial treatment success and then a recurrence of depression. However, despite ongoing correspondence and negotiation about how this would be implemented, it was with these repeat treatment item numbers where the problems start to be seen. Specifically, MSAC recommended that only one repeat course of treatment be funded and that this is limited to a maximum of 15 treatment sessions: as I will explain, both of these restrictions are highly problematic.

The Sting in the Tail 1

First, why should treatment only be limited to one repeat course? Well on the surface, MSAC could justify this on the basis that the clinical studies evaluating the use of rTMS have been predominately limited to studying the effects of initial treatment or at most one ‘second’ repeat course. However, this simplistic interpretation does not consider the context of other treatments in psychiatry or medicine in general. Treatments are almost universally evaluated for their effect during an acute illness and extremely rarely are studies repeated during episodes of relapse. For example, I’m not aware of any studies evaluating the effect of antidepressant medication in the same circumstances — that is, studies showing they work on a second, third or fourth occasion — but they can be used for many episodes across the course of someone’s life.

In terms of Medicare funding, I’m not aware of any treatment where item numbers are restricted in this way. For example, Medicare funding is available for as many courses of ECT treatment as may be required across a patient’s lifetime (and there is certainly no randomised control trial data showing ECT works on a third or fourth occasion). A more contemporary example might be the implementation of Medicare item numbers supporting psychological treatment for disorders such as depression. These are limited in the overall number of sessions that Medicare will support but the number is reset at the end of each year so patients can have a course of psychological treatment each year, indefinitely. More concretely, you could have your knee reconstructed an indefinite number of times.

So why would Medicare funding be restricted in this way? The only rationale that makes any sense is a financial one: that there is a concern that repeated courses of treatment over time will be excessively costly but this decision certainly doesn’t seem to be clinically justifiable.

The Sting in the Tail 2

The second major limitation is the restriction to only 15 sessions in this second course of Medicare funded rTMS. There is a superficial rationale as to why MSAC recommended this limitation, but the decision doesn’t really hold up to close scrutiny. In fact, it also seems to be financially driven rather than logically determined. Why did they pick 15 sessions? Well, this seems to have come from a relatively superficial understanding of the literature supporting a second / repeat course of rTMS therapy. In September 2019 we submitted a document to MSAC providing the clinical evidence supporting the use of repeat courses of rTMS treatment. This included a description of seven clinical studies evaluating the persistence of rTMS benefit and the likelihood of patients improving when treatment was provided on a second or subsequent occasion. Almost all of the studies that provided data on repeat treatment success followed a similar structure. Patients were initially treated and then followed carefully and treatment reinitiated, the second course of treatment, when they appeared to be experiencing relapse. Under these circumstances, studies reported that patients did get better the second time but typically required a shorter duration of treatment to get well the second time than they did initially. For example, in a study published by Janicak and colleagues, patients required an average of 14.3 sessions on the second occasion and the average was 14.3 ± 17.8 in one group and 16.9 ± 18.9 in a second group in a second study by Phillip and colleagues.

So what is wrong with only funding 15 sessions if on average patients need fewer sessions the second time around? Well there are two real problems with this. What was required on average in these studies is exactly that: it is what the average patient needed. Therefore, the average patient will get meaningful benefit this second time around. However, a significant proportion, potentially up to half of all patients, will actually need more than this and hence end up being significantly undertreated. The “±” numbers I provided for the data from the Phillip study in the last paragraph illustrate this. These numbers indicate that the total numbers required by patients vary considerably: some need very few but some need many more than 15. These patients will end up being grossly under treated, unless they are willing to pay for treatment outside of the Medicare system.

There is also a second problem. As indicated before, the patients received their second course of treatment when early signs of relapse were detected during clinical studies where they would have been monitored very carefully, and treatment then implemented quite rapidly. In my experience, the early reinstitution of treatment like this will often mean that fewer treatment sessions may be required. However, in real world clinical practice, relapse is unlikely to be detected as early as this, patients may well be more unwell when undertaking this second course of treatment and therefore 15 sessions will commonly be inadequate.

Does this Matter?

So, what are the implications of these problems? They are really quite substantial. What we are really going to be able to offer to patients with treatment resistant depression will be an initial course of treatment that in about a half or more of these patients will result in a dramatic and meaningful improvement in their depression, with a resolution achieved in many. However, after that, they will have very limited access to treatment should their depression recur: and we know that depression will recur in most patients. They will be able to access one additional course, that is shorter than is really required, and then nothing else in the future. Unless of course they have the financial where-with-all to fund it themselves. Or private insurance and a willingness to spend considerable time in hospital.

One of the significant unintended consequence of these quirks of the funding process will have major implications for health care costs as well potentially to the share price of large companies such as Healthscope and Ramsey. To understand this requires a slight diversion to understand how rTMS has been provided in Australia for the last 15 years. In the absence of public funding for outpatient rTMS in Australia, a system has widely evolved where rTMS is provided to patients as inpatients in the private hospital system. Patients with private insurance are admitted to hospital for treatment of depression and as part of their therapy receive a course of rTMS, typically over somewhere between two and four weeks. They are required to stay in the hospital overnight although they might go out on leave during the day. Some of these patients do need to be in hospital, to receive other treatments or for monitoring due to suicidal ideation. However, many are really only in hospital to receive rTMS therapy and could be safely and more appropriately managed on an outpatient basis. The cost of the treatment is absorbed by the hospital who are ultimately well financially rewarded by having patients in their mental health beds.

Over time rTMS has spread through almost all the private psychiatric hospitals in Australia and become a major driver of admissions and ultimately of revenue. Some hospitals have two or three rTMS machines working 10 or even 12 hours per day to provide treatment to the large number of patients being admitted under these circumstances. The provision of inpatient rTMS has supported a dramatic increase in inpatient bed numbers over at least 10 years. I would estimate that somewhere between $50–100 million dollars in excess costs associated with hospital admissions have accumulated per year because of this, predominately through private health insurance premiums, and we all know how rapidly these have increased. This is a by far from all bad. Through this mechanism thousands of patients have gained access to rTMS and for many this has been life changing, in some lifesaving. I have seen many of these: patients who otherwise will have remained depressed and disabled. However, the hope with Medicare funding was to shift a lot of this treatment away from unnecessary admissions to outpatient treatment.

You would think things will get much better with this Medicare funding. That the investment in outpatient rTMS will ultimately reduce these inpatient treatment costs. However, I think that the ultimate outcome will actually be the opposite. That there will be a continued growth in inpatient rTMS treatment provision over time.

Why might this be the case? Well, Medicare funding will provide a substantially new group of patients with access to an initial course of treatment. A large group of patients will try rTMS and many of these will substantially benefit from it. Those who do will then be faced with a challenging problem. What do they do when their depression comes back? They will make use of the second round of 15 treatments but then have no other publicly funded treatment access. Many of these patients, having successfully received one course of rTMS and seen the difference it can make to their life, will be motivated to take out private health insurance and ultimately use this to access further courses of rTMS on an inpatient basis. Several other provisions in the proposed funding structures will also heighten this. The item numbers are being written to exclude their use in patients who have had rTMS before. Therefore, no patients who are currently receiving rTMS within the private hospital system will be eligible to receive it on an outpatient basis so certainly it won’t result in a reduction in admissions for this existing group of patients.

Summing up

So where does this leave us? Certainly, we have made some significant progress. At a minimum, a substantial independent body, MSAC, has recognised the clinical value of rTMS and established one of the first systems for national level funding. However, the marked restrictions on how rTMS can be accessed, especially over time, will mean that it will provide exposure to the treatment for many patients but a long-term solution to very few.



Paul Fitzgerald

Paul Fitzgerald is a Professor of Psychiatry specializing in brain stimulation and neuroscience applications to depression, schizophrenia @ other disorders