James Reilly (Dublin North, Fine Gael)

As part of budget 2012, the Government agreed a number of changes to charges for patients who chose to be treated on a private basis in public hospitals. These changes will have no impact on public patients who comprise the vast majority of those treated in public hospitals.

When individuals elect to be treated privately, they agree to meet the consultants' fees and the hospitals' maintenance costs. These issues were examined in the value for money and policy review of the economic cost and charges associated with private and semi-private treatment services in public hospitals, which was published by the Department of Health and Children in December 2010. It is estimated that the average maintenance cost per bed day in a category 1 hospital is €1,046. In keeping with the long-standing policy of moving towards recovering the full economic cost of providing treatment for private patients in public hospitals, the maintenance charges for private patients in public hospitals have been increased by between 3% and 5%, depending on the category of hospital, with effect from 1 January. It is anticipated that this will yield additional revenue in the region of €18 million in 2012.

While the HSE and voluntary hospitals recoup considerable sums from private health insurance companies in respect of private and semi-private treatment services provided for their members, lengthy delays often occur between the discharge of patients and the receipt of payment from the companies. This has led to an unacceptably high level of debtor days, with a significant amount in fees outstanding. Some hospitals are much more efficient at collecting this income than others. It is intended that more hospitals will achieve the income collection standard of the better performing hospitals and, as a result, a target of €50 million in accelerated income has been set for 2012.

A significant proportion of private patients who are treated in public hospitals are not charged for the services because of the current rules on bed designation. In contrast, the public hospitals' consultants receive private fees, even where the hospitals cannot collect their maintenance charges. This represents a loss of income to the public hospital system and a significant subsidy to private insurance companies. It is intended to introduce new arrangements during 2012 to allow public hospitals to raise charges in respect of all private patients in public hospitals. This new system will be entirely in keeping with the changes required as we move along the road towards universal health insurance. It is estimated that the new system will yield an additional €75 million in 2012.

My meeting the three commercial private health insurers resulted in clear agreement that all would work competitively and co-operatively in driving down private health insurance costs. There was also agreement that savings could be achieved in the services provided by public and private hospitals, a matter to which I have alluded. Significant savings can be made in the costs of the health insurance companies. In addition, I indicated that I would be happy to hear of any proposal from the insurance companies that would result in lower costs. The Department is also happy to enter into new arrangements with the companies. For example, instead of charging per day, a fee per procedure could be agreed, whereby those hospitals which were efficient, carry out procedures and reduce their patients' average length of stay would benefit, while those which were inefficient would suffer.

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