VHI eyes €300m in cost savings

The country’s largest health insurance company, VHI, has said it will introduce a further €100 million in cost savings annually over each of the next three years.

Writing in the annual report of the State-owned health insurer, its chairman Martin Sisk said these savings would be achieved through several initiatives including rate reductions, utilisation management, expansion of clinical audit, provider reviews and the continued transition of procedures to lower-cost, medically-appropriate savings.

He said that since 2009 VHI had already delivered savings in excess of €300 million. Its financial figures for 2012 indicated that the company recorded a surplus of €54.3 million – up from just over €7 million in 2011 . However the report maintained that “the magnitude of the surplus was contributed to by a number of factors not least of which was an exceptional one-off item involving the write-back of curtailed retirement benefits to the value of €38.2 million”.

Core business
It said its the core health insurance business continued to be loss making with a recorded underwriting loss of

€7.2 million.

Last night the VHI said that some of the mechanisms which would allow it to achieve the additional savings included further redesignations of procedures to day-care settings. The company also said it was “carrying out clinical audits of admissions arising from the emergency departments of private hospitals”.

The company said that overall it expected that its claims would be down on the levels budgeted for 2013.

Mr Sisk said that VHI was committed to driving costs down and said it was “therefore worrying to note that the Minister for Health proposes to introduce legislation which will charge private patients for the full cost of a public bed in a public hospital”.