Plan will mean higher premiums and less choice for patients

Some insurers may now seek to drop certain public hospitals from their insurance plans

THE GOVERNMENT’S plan to change arrangements for designating private beds in public hospitals may seem just a technical issue buried deep in its spending review.

However, the move will have massive implications for the two million people covered by private health insurance.

The Government has set a target of securing €146 million next year and €268 million in subsequent years through the increased generation and collection of private income in public hospitals.

While this will increase revenue for the exchequer, the costs will be passed straight on by the three main companies in the market to subscribers in higher premiums.

The country’s largest health insurer, the VHI, last night warned that the move could lead to subscription rates – which have already increased this year by over 45 per cent in some cases – rising by a further 50 per cent.

Another possible impact for subscribers is that some insurers may now seek to drop certain public hospitals from their insurance plans, a move which would limit choice for patients.

The Department of Health sets the rates for private beds in public hospitals, and already insurers maintain that some of these are more expensive than those they negotiate with private hospitals.

The full details of the Department of Health’s plans for private beds remain unclear as yet.

However, in essence it plans to raise the charges for private and semi-private beds. These rates – currently at over €1,000 and over €800 per night – could rise by a further 4 per cent in a move aimed at generating €18 million.

The Department of Health is also set to step up moves to collect outstanding amounts owed to hospitals by insurance companies.

However, the real money-spinner for the Government could come from its plans to abolish the existing system of designated private/public beds and to allow hospitals to raise charges in respect of all private patients.

About 20 per cent of beds in public hospitals are designated for fee-paying patients and these generate about €350 million from insurance companies.

However, not all private patients can be accommodated in these beds. Sometimes they are already occupied. At other times they may be in use for infection control or other purposes.

In such cases, private patients have not been charged by the hospitals up to now, although the consultants concerned have been paid by the insurance company.

The Comptroller and Auditor General has estimated that charges are not raised in respect of about half of all private patients.

Given that public hospitals already receive €350 million for private patients, any move to introduce charges for all private patients treated could be lucrative.

However, the VHI yesterday warned this could lead to a premium increase of at least 50 per cent and force increasing numbers of people to drop out of the health insurance market.

It also maintained the proposal “would also eliminate the right of every citizen to avail of free public healthcare, and people with private health insurance will, in effect, end up paying twice”.

Minister for Health James Reilly last night accepted that the Government’s move would lead to increased costs for insurers. However, he argued that there was “an awful lot of fat” in the system and urged the companies to seek to curb costs in negotiations with hospitals and doctors next year.

He said this could mitigate some of the impact of the increased costs generated by the Government’s plan.

He pointed to reports that a single individual was being paid more than €1 million by one company. He also said some side-room procedures currently being carried out in hospitals could be performed in primary care.