Public hospitals:The Government's decision to increase the cost of private beds in public hospitals could add up to 6 per cent to the price of health insurance subscriptions, writes Martin Wall
Minister for Finance Brian Cowen announced yesterday that the Government was to increase bed charges in public teaching hospitals by 25 per cent.
The Government believes this increase will create an additional €50 million next year. The money will go towards funding the cost of its elderly care package.
Highly placed sources in the health insurance industry last night estimated that the increase in bed charges could add between 5 and 6 per cent to the cost of private health insurance subscriptions next year.However, the Government has calculated that the bed charge increases would lead to a rise of 4.25 per cent in health insurance subscriptions.
In reality, the overall increase in health insurance subscriptions will be much higher as prices were already expected to rise next year as a result of general health inflation in areas such as new drugs.
For the 1.5 million VHI subscribers, the rises in private bed charges could negate much of the benefit of the introduction of risk-equalisation payments in the health insurance sector.
VHI chief executive Vincent Sheridan said last month that the introduction of risk-equalisation payments would mean that his company's subscriptions would not increase at the same rate as otherwise would have been the case. VHI prices have risen by 25 per cent over the past two years.
However, any planned reduction in the rate of VHI increases is likely to be offset to some degree by the impact of the new hospital bed price rises.
The increases will mean that the cost of an in-patient bed in the country's largest teaching hospitals will rise to €690 per day. A semi-private bed will cost €540 per day, while the price of a day bed will rise to €496.
The new increases will apply to beds at Beaumont, St James's, St Vincent's, Tallaght, the Mater and Connolly hospitals in Dublin; Cork University Hospital, the Mercy and the South Infirmary in Cork; Waterford Regional Hospital; the Mid West Regional Hospital in Limerick; University College Hospital and Merlin Park Hospital in Galway; Sligo General Hospital; and Our Lady of Lourdes Hospital in Drogheda.
The Government said it planned to increase, progressively, the private bed charges in public hospitals until the full economic cost of providing such facilities was reached. Sources said that the new charge of €690 for a private bed in a public hospital represented only 80 per cent of the full economic cost of such a facility and that the semi-private rate of €540 represented just 63 per cent of the full economic cost.