Private patients in public hospitals have half their costs covered by the taxpayer. Their health insurance meets only 50 per cent of the expense, a study released today reveals.
The report by the Economic and Social Research Institute (ESRI) shows that private patients in public hospitals are being substantially subsidised by the State.
It concludes that a phased increase in health insurance premiums to fill this gap would not drive people away from private insurers.
The study, Private Practice in Irish Public Hospitals, was written by Prof Brian Nolan, the ESRI's research professor and Prof Miriam Wiley, the head of its Health Policy Research Centre.
It shows that private patients account for one-fifth of all hospital stays in acute public hospitals, yet about a quarter of the hospitals' total expenditure on in-patient care is spent on them.
All citizens have an entitlement to public hospital care.
Some private patients are admitted to public beds in emergencies. In these cases, the hospital is not allowed to charge the health insurance company for accommodation. The State spent about £130 million in 1996 to provide in-patient care in public hospitals for private patients.
This is about double the income raised by the hospitals through charges paid by private patients and their insurers.
Private patients are further subsidised by the State through tax relief on health insurance premiums, the study noted.
Speaking at a press briefing on the report yesterday, Prof Wiley said the Government's policy was to move towards charging private patients the full cost of providing care for them in public hospitals.
"We now know the extent of the subsidy currently being applied to supporting private patients in public hospitals and what's clear is that a substantial increase in the daily charges by the hospital will be required if we are to actually get to the point of charging the full economic cost of private patients in public hospitals," she added.
If the level of charges for private care in public hospitals was doubled to redress the current funding imbalance, then annual claims faced by insurers would increase by one quarter, the report estimated.
However, if this cost was immediately passed on to private patients through a 25 per cent increase in health insurance premiums, there would be a decline in the numbers of people taking out health insurance, it added.