HEALTH:THE GOVERNMENT is to commission a new study aimed at securing greater efficiencies in the operation of the State-owned health insurer, VHI.
The move comes as Minister for Health James Reilly has argued “there is a lot of fat” in the sector. He suggested moves to curb costs could offset some of the effect of new Government charges in relation to the treatment of private patients in public hospitals.
The VHI argued on Monday that the new measures announced by the Government could result in increases of up to 50 per cent for subscribers.
The company denied yesterday that it was inefficient or that sufficient savings could be made by reducing payments to doctors and private hospitals to offset the €143 million in additional savings the Government is seeking to generate from the health-insurance industry next year.
A spokeswoman for VHI said: “If all the consultants were to work for free for us for a year, treating approximately 700,000 patients, we still would not save enough money to compensate for the additional costs incurred through the proposals to remove designations and charge all private patients for their stay in public hospitals.”
The Government is seeking to generate the additional money, which will rise to over €280 million in subsequent years, by increasing charges for private beds in public hospitals, by chasing insurance companies for money already owed and by removing the designations on beds to allow hospitals to charge for all private patients treated in their facilities.
The Irish Times understands that “planning assumption figures” drawn up by the Department of Health show it is seeking to generate €18 million next year by raising bed charges, €75 million by removing the existing bed designations, and a further €50 million from the money currently owed by insurers.
Separately, it is understood the Government will ask consultants Milliman to carry out a new analysis of the VHI’s claims costs.
The company produced a controversial report on the VHI last year, which argued up to 10 per cent of all in-patient admissions may prove to be unnecessary, and hospitals should not be paid to perform these procedures.
However, the VHI argued that if the recommendations were adopted, the VHI would “transition from an organisation which currently funds the healthcare needs of our customers to one that actually determines what level of care and the type of treatment which our customers would receive”.
Meanwhile, advocacy bodies expressed concern at the price hikes forecast by the VHI.
Stephen McMahon of the Irish Patients’ Association warned the proposals could “create an incentive for public hospitals to chase private patients, because they will generate income and that will push public patients further down the queue.”
The Consumers’ Association of Ireland called on the VHI to look at its own cost base.
“If this came to pass it would be the end of the line for many people who would just have to abandon their policies,” its chief executive Dermott Jewell said.