Pain-free inflation for VHI doctors

HOSPITAL consultants earning an average of €134,000 a year for treating private patients will be financially compensated by the VHI if the cost of living rises.

The specialists, who were earning an annual average of €127,000 for treating VHI patients, last week received a 6% increase from the insurers, bringing their average salary to €134,620.

But a special inflation clause has also been built into the latest VHI fee package which means that if the cost of living climbs above 6%, consultants will get more money to ensure their pay packet is not eroded by high inflation.

In the latest fee deal with the VHI, if the Consumer Price Index, the mechanism used to monitor the country’s inflation rate, exceeds 6% up to June 30 2004, the difference will be added to the consultant’s regular fee for the following year, but only to a maximum of 1.5% of the difference.

In the year ended June 30 2005, should the CPI exceed 5.5%, the difference, subject to the same upper limit, will be added to fees the following year.

“This is a disaster clause and is just there in case things go through the roof. This inflation clause is not new and it is like a safety net if the cost of living rises sharply,” a spokesperson for the VHI said.

“It has been in place since 2001 and has never been triggered,” she added.

The spokesperson said the “disaster clause” would not have an impact on the price of people’s premiums.

However, the level of consultant’s fees are believed to be a major factor in determining the level of premiums people pay.

Spokesperson for the Irish Hospital Consultant’s Association Finbarr Fitzpatrick pointed out the average earnings per consultant from private medicine was a gross income and did not take such factors as overheads into account.

He also felt the inflation clause was justified.

“It there wasn’t a need for it, it wouldn’t be there. However, inflation is not likely to hit 6% so I don’t see the increase coming into to effect,” he added.

The current inflation rate is 4.3% and although it has fallen considerably since the start of the year, it is still running at double the EU average.

Consultants came under fire last month from the Brennan Commission which investigated financial management in the health service.

Professor Niamh Brennan, who chaired the commission, said she was shocked to learn that controls on consultants’ contracts are so weak that they can earn €152,000 a year for treating public patients and then delegate some of these duties to junior doctors. When they add on their work with private patients, they can earn up to €280,000 a year.

"The consultants pocket the money while junior doctors can earn a lot on overtime doing their work. It is not the most efficient way for taxpayers money to be spent since they are paying twice for the same service,” she said

But Mr Fitzpatrick said consultants will oppose any move to force them to work exclusively for public or private patients.