State probe could cause hike in health premiums

PRIVATE health insurance premiums are set to rise if a state investigation into hospital charges finds health insurers are not paying enough towards the cost of treating private patients in public hospitals.

The investigation, commissioned by the Department of Health, is also examining how it can force insurers to pay the State more quickly, citing delays between the discharge of private patients and the recoupment of fees as a “significant problem”.

The “in-depth analysis” is being conducted as part of the State’s long-standing policy to move towards charging private patients in public hospitals the full economic cost of their care.

While the department has steadily increased the fees over time – with the daily cost of a private bed in a major teaching hospital rising from €401 in 2004 to €910 this year – there is a belief in some quarters that the State is still not charging private insurers enough.

However, a spokeswoman for the VHI said yesterday that the health insurer is in fact losing money in certain situations when paying for the cost of private beds in public hospitals.

“In some instances, the cost of a private bed in a public hospital now exceeds the cost of a private bed in a private hospital. The risk is that these hospitals will no longer be economically viable for us if we can get a cheaper rate elsewhere.”

She said the VHI’s involvement with these general, non-teaching hospitals was “obviously something we need to consider because we need to do the best we can for our members”.

Last year, both the VHI and Quinn Healthcare partly blamed increased private bed charges for their decision to raise premiums.

A steering group, with an independent chairperson and comprising officials from the Departments of Health and Finance and the HSE, is overseeing the review which will assess the economic cost of providing services to private and semi-private patients in public hospitals.

An interim report on the analysis is due next month.

In that report, the steering group is expected to make recommendations on what the charges should be for 2010.

The steering group’s final report is due in December, and will contain “a more detailed examination of the costs and charges” according to the department.

In the meantime, the department is running a consultation phase to elicit the views of stakeholders, who have until September 4 to make submissions.

The issue of charging for private facilities in public hospitals was addressed in the recent Report of the Special Group on Public Service Numbers and Expenditure Programmes. The McCarthy report recommended the charge be increased by 20% to generate estimated exchequer savings of €50m.