The State's 1.6 million private healthcare subscribers face uncertainty over medical fees following the Competition Authority's refusal to grant a licence to the Irish Hospital Consultants Association (IHCA) for its current fee schedule agreements with the VHI and BUPA. For the consumer, the Competition Authority ruling has advantages and disadvantages. There will no longer be a fixed price for a total hip replacement, for example, and patients will be able to negotiate different fees with different consultants.
However, consumers will lose the facility whereby the VHI and BUPA pay consultants directly on their behalf. Following the Competition Authority ruling they will have to pay the consultant directly and then seek reimbursement from the insurer.
Insurers may no longer be in a position to guarantee a full reimbursement of medical fees to their members. Because there will be a range of fees agreed between individual patients and individual consultants, a "top-up" fee directly from the consumer seems inevitable. It is possible that private health insurance will appear less attractive in these circumstances.
The ruling follows a surprise visit by the authority to the IHCA Headquarters last year and a subsequent written notification by the consultants body to the Competition Authority.
In a written response, seen by The Irish Times, the authority said the agreements with the VHI and BUPA were in breach of the Competition Act, 1991. "By setting a schedule of fees that is uniform across all regions, the agreements have two detrimental effects. In addition to reducing competition and leading to higher prices, it also distorts efficient resource allocations," the authority said.
At present, healthcare consumers take out comprehensive health insurance with either the VHI or BUPA which guarantees full coverage for most medical fees. These are negotiated by the IMO and the IHCA with health insurers. The current agreements with the VHI and BUPA expire on June 30th, 2001.
Also, the Competition Authority's refusal to grant a negotiating certificate to the IHCA, which represents 80 per cent of consultants, means no new agreements can be legally negotiated between health insurers and the consultants' association.
The authority's refusal to grant a licence is being appealed by the IHCA, which has requested an oral hearing. If this hearing upholds the written ruling of the Competition Authority then all current fee agreements will be null and void under competition law.