FG predicts doubling of premiums

Fine Gael has maintained that health insurance subscription costs could double within three years as a result of the Government's plans to transfer beds for fee-paying patients in public hospitals into new centres to be developed by the private sector.

Fine Gael health spokesman Dr Liam Twomey has argued that the provision of new beds in the proposed private hospitals to be developed on the grounds of public institutions could add between €250 and €500 million to the cost base of insurance companies such as VHI and Bupa Ireland.

He said that this could lead to major increases in subscription rates.

The Department of Health has calculated that the eight public hospitals where there are plans to transfer fee-paying beds to the new private facilities currently earn nearly €90 million for the insurance companies annually.

This funding will have to be replaced from the exchequer when the new private hospitals come onstream.

The Irish Times revealed last month that the Department of Health estimated that public hospitals would lose €111 million annually in private revenue under the Government's co-location plan.

However this figure has been scaled down to €88.6 million following the decision of the HSE to shelve plans to develop private co-located hospitals on the grounds of University College Hospital Galway and Letterkenny General Hospital.

As stated elsewhere on this page, the HSE has since announced it will retender for these two hospitals.

The Minister for Health Mary Harney has said that "the loss of private insurance income to public hospitals arising from the co-location initiative must be seen in the context of the freeing up of 1,000 beds that are currently reserved for private patients and the significant benefits the HSE expects to receive in return for the concessions granted to private operators. Public patients will not incur any additional costs arising from this initiative.

"Whether private patients will pay more in co-located hospitals than they currently pay in private beds in public hospitals depends on the charges that may be set by the new private hospitals. In any event, it has been the policy of the Government since 1999 to move to full economic charging of private beds in public hospitals."

However, Dr Twomey argued that private patients would have to pay more for care in the planned new private co-located hospitals.

He said that the Minister's calculations appeared to be based on the assumption that the loss of income from each of the 1,000 fee-paying beds in the public system, earmarked for transfer to the new private co-located hospitals, would be around €110,000 per year.

"This is a totally false economy. No private hospital can operate a private bed for €2,000 per week. It is simply not possible," he said.

"I estimate that each of these beds would require a contribution of between €5,000 and €10,000 per week if these hospitals are to survive.

"On this basis, does the Minister agree the cost to VHI and BUPA will be between €250 million and €500 million, rather than the €86 million to which she referred? Does she accept her plan will make it absolutely impossible for young families and elderly people to maintain their private health insurance? We will have plenty of shiny new private hospitals but people will be pushed out of the health insurance market.

"Such developments will come at a massive cost to private patients.

"The Minister must concede that when one takes into account other costs that will arise in regard to private health insurance, this plan will double premiums within three years."