James Reilly (Dublin North, Fine Gael) | Oireachtas source

I have consistently raised the issue of managing costs with health insurers and I am determined to address rising costs in the sector in the interests of consumers. I want insurers to address the base cost of each element of claims which they pay. This is the real issue as costs and the manner in which they have been rising in recent years are unsustainable.

Last year I established the consultative forum on health insurance to generate ideas to address health insurance costs, while always respecting the requirements of competition law. I have made it clear to the health insurers that I believe significant savings can be made, ultimately reducing the impact of rising health costs on health insurance premiums for the consumer. Last week I announced the appointment of an independent chairperson to work with my Department and the insurers under the auspices of the consultative forum on health insurance. The chairperson will oversee a process of review to give effect to real cost reductions in the private health insurance market. Specific areas that I have asked insurers to address include an audit of the volume of procedures; a clinical audit to determine the appropriateness of procedures being claimed for; procedure-based payments, in particular with a view to their extension to the public health sector; and benchmarking to determine the underlying basis for the cost of specific procedures, with a view to driving costs downwards.

I am strongly of the view that all procedures should be provided in an appropriate setting that is safe and provides value for money for consumers. There have been criticisms from insurers of the decision to charge private patients in public beds. The new charge makes sense. We cannot continue with a situation where private patients pay only €75 per night in a public bed where the economic cost is closer to €1,000. Insurers need to address their own cost base urgently, rather than simply blaming others for their inefficiency. The independent chairman of the forum, working with the insurers and my Department, will be charged with identifying real scope for effective cost-management strategies that all insurers can adopt to ensure the long-term sustainability of the private health insurance market. The new chairman of the forum is Mr. Pat McLoughlin.

Additional information not given on the floor of the House

The continued participation of younger customers is important in keeping the health insurance market on a sustainable path. In addition to the work of the forum, my Department established a subgroup of the consultative forum earlier this year to consider regulatory issues relevant to the health insurance market, including proposals to encourage greater participation of younger, healthier people in the market. The appointment of an independent chairman to identify cost reductions and the ongoing work of the consultative forum to promote the participation of younger customers will address the cost of providing hospital care for the population who have private health insurance.

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