New consultants' contract may see HSE lose €50m

PUBLIC ACCOUNTS COMMITTEE:THE HEALTH Service Executive has estimated it will lose approximately €50 million because of an unforeseen "byproduct" of the new hospital consultants' contract.

The sum will be lost because a payment to the HSE normally made by health insurance companies for private patients will not be collected. The HSE’s chief executive Prof Brendan Drumm told the Dáil Committee of Public Accounts it had not anticipated the shortfall.

In 2008, over €260 million was paid out by health insurers to the HSE on behalf of private patients accessing public services. But, because of the provisions of the 2008 consultants’ contract, agreed last year after long negotiations, that income will drop.

The new contract stipulates that “Type A” consultants, accounting for 25 per cent of consultants in the hospital system, can only carry out public work.

And where a patient with private health insurance is admitted to hospital by a Type A consultant, the HSE cannot raise a private accommodation charge for that patient.

Even if that patient is subsequently under the care of a consultant with a contract allowing some private care, the HSE cannot bill for accommodation.

Crude estimates indicated a potential loss of up to €50 million, the committee was told, though the full impact will not be known until later in the year.

Prof Drumm said the HSE had not anticipated the loss as a byproduct of the consultants’ contract. He told the committee it would address the issue with the Department of Health.

“It is a challenge that will come from insurance companies,” he said.

Fianna Fáil TD Seán Fleming said he was shocked at the loss. He said it amounted to a backhanded subvention to insurers and asked if the HSE had “rolled over” on the issue. “You should have known this was coming,” he said.

The department’s secretary general Michael Scanlan said “rebalancing the mix” in favour of public patients was a department policy and it was “no surprise” to him the rebalance would result in a drop in income.

The committee also heard a further €90 million due to be paid to the HSE by health insurers in 2008 for private patients had not yet been collected.

In a briefing document to the committee, the HSE said the unpaid charges posed a significant challenge.

“Given the sensitivities of dealing with very ill patients and the relatives of deceased patients, it is not always appropriate to employ aggressive debt collection methods,” it said.

A centralised programme for collecting charges is being considered by the department, the HSE said, and, subject to approval, they hoped to begin the project in the next few weeks.

Speaking after the meeting, Donal Duffy, general secretary of the Irish Hospital Consultants Association, said the organisation had warned the HSE about the potential problem with private health insurance a year ago.

“They didn’t see any particular difficulty,” Mr Duffy told radio station Newstalk.