Dáil Éireann Debate, Thursday - 2 December 2004
4 Dr. Twomey asked the Tánaiste and Minister for Health and Children when the 25% increase for a private bed in a public hospital, as announced in the 2005 Estimates, will be implemented; her views on the effect this will have on the private health insurance market; and if she will make a statement on the matter. [32005/04]
Amharc ar fhreagraThe increased charge for a private bed in a public hospital will take effect from 1 January 2005. In the interests of equity, it is Government policy to gradually eliminate the effective subsidy for private stays in public hospital beds and relieve the taxpayer of the burden of carrying these costs. Even with this increase, the cost of providing services to private patients in the major hospitals will continue to exceed the income arising from the charges.
The cost of private health insurance to the subscriber in our community-rated market remains low by international standards. In addition, it continues to benefit from tax relief at the standard rate. Implementation of this increase will result in an increase of about 5% in health insurance premiums. I believe the impact if any on the numbers covered by private health insurance is likely to be marginal.
Some 50% of the population is covered by private health insurance. Those people will regard access to the health services as a form of double taxation. Does the Minister accept that private health insurance costs could increase by 10% next year, allowing for the extra charges on private beds? Will the Minister agree that health premiums will have increased by 40% in three years if these extra charges are carried through next year? Is she aware that low-income families, especially those with children, will suffer most from the increased cost and may well be forced to give up their private health insurance? Does she accept that average families with health insurance who require the full benefit of the drugs refund scheme could end up paying up to €3,000 a year or more? Under the drugs refund scheme, charges have increased from €53 in 2002 to €85 following this budget, an increase of 60% in the past three years.
There has been very little debate on the private health insurance market. The risk equalisation scheme was not activated under the last review. Does the Minister agree there is very little competition in the health insurance market? Many customers are fearful at the lack of availability of services in the acute hospital sector and feel obliged to take out private health insurance. The general population is being fleeced and 50% of those who have private health insurance are using facilities in public hospitals.
We have a mixed system and it has generally worked very well from the perspective of private insurers. The issue is one of equity. I would like to move to a situation where more of the private activity would be moved to a private environment so that public beds can be used for those in greatest need. I would love to see a situation emerge which would be neutral in terms of how public hospitals are paid for private and public patients, if one wants to use that language. Clearly there are great incentives when one type of bed earns more money than another type. We all know that the 80:20 ratio is not maintained, which is unsatisfactory.
There is increasing competition in the health insurance market. A new entrant recently announced its intention to provide cover and there is also a new entrant in the dental insurance market. I welcome all those developments. There is huge demand for the whole range of policies and products which these insurers offer. The way to keep the costs down is through greater competition. All over Europe, including in some of the countries that are held up as having a model health system, there is a raging debate about the cost of health care in many of the countries which traditionally funded their service from the public purse.
It is not unique to Ireland that health care is expensive because of new products, new technology and higher staff costs. These contribute to insurance and to more expensive health care costs. From the Government's perspective — this has been clear since 1999 — we want to move to a situation where the full economic cost of providing a private bed is charged to the private insurer.
Will the Minister inform the House of the full commercial cost of a private bed in a public hospital? She has increased charges by 25% but that would still be a long way off the full commercial cost of a private bed in a public hospital.
There is not a uniform cost as it varies from hospital to hospital and on the basis of the specialties. The teaching acute hospitals have a higher cost base than some of the smaller hospitals. I have some figures which I can make available to the Deputy. From an insurer's point of view, there is a range of fees for the use of these beds, which I can make available to the Deputy. The hospital is paid by the insurers for the use of beds. I understand there are three different categories of payment from insurers to the hospital. One of the issues that arises is in the context of ensuring that resources go to best performers. An element of the resource allocation rewards efficiency and effectiveness. In the future we will require a clearer breakdown of the costs of procedures.
Will the Minister be in a position to supply the information on the full costs?
I will supply the available figures to the Deputy.
