John Lahart (Dublin South West, Fianna Fail)
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In the spirit of co-operation mentioned by the Minister-----

Finian McGrath (Dublin Bay North, Independent)
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I will tell the Deputy some of my big ideas.

John Lahart (Dublin South West, Fianna Fail)
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I thank the Minister of State.

Seán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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We might stick to the question.

John Lahart (Dublin South West, Fianna Fail)
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I think it would be helpful.

Finian McGrath (Dublin Bay North, Independent)
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My apologies, a Cheann Comhairle.

John Lahart (Dublin South West, Fianna Fail)
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I appreciate the Minister of State does not have advance warning of the specifics of my contribution. He has an idea of the general theme.

A constituent of mine received a copy of a bill from a particular private hospital that had been paid by the individual's health insurer. It is for two stents inserted and a one-night stay in a private ward in the hospital from 11 a.m. one morning until 11 a.m. the following morning. The person used all their own tablets. The cost of the medical treatment seemed reasonable at approximately €1,000 and given the serious nature of the procedure, my constituent was happy enough with that charge. However, there was a charge of €7,055 for the use of the hospital's facilities and bed for a 24-hour period - probably somewhat less than that.

As this seems an outrageous figure to a layperson I did some investigation into it. I was told that included in such a payment would be things such as the use of theatre, recovery space for a patient, perhaps consumable costs but not drugs in this case, and then what the insurers might call the hotel-like accommodation costs for keeping a patient overnight. These are probably fees agreed between all insurers and private hospitals. This is a semi-private room and not a fully private room. There does not seem to be a great variation between what is agreed between each private insurer and each private hospital. Therefore there is not a significant difference between what insurers are paying to private hospitals.

If this procedure had been carried out for my constituent as a private patient in a public hospital, I am told the rate of reimbursement to a public hospital for a private patient would be approximately €1,000 for this procedure, the insertion of two stents. Here is the nub of the issue. What is the real cost of this? I am told by the public hospital that €1,000 probably does not cover this and that it is about €500 per stent. That is just for the stent, but that €7,000 is nowhere near the accurate cost of it either. Therefore, if I go as a private patient into a public hospital for a procedure, the public hospital will receive €1,000 from the insurer, but if I go in as a semi-private patient into a private hospital, the insurer will pay €7,000.

I am thinking of all the people who scrimp and save. During hard times there were two things most families kept going: health insurance and the mortgage. That the cost of private insurance is so exorbitant must be linked to these kinds of charges from private hospitals.

Finian McGrath (Dublin Bay North, Independent)
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I thank the Deputy for raising this very important issue. I am aware of the particular case he mentioned.

The charges that apply in a private hospital are the subject of negotiation between the health insurers and the health service providers. The rates for particular procedures are the subject of agreement between insurers and medical consultants, while the rates that apply for accommodation and other services in private hospitals are agreed between health insurers and each individual private hospital. Since health insurers can negotiate with private hospitals and with consultants, it is in the insurers’ interest to negotiate the best possible rate they can for procedures and services for their customers, as this will control their claims costs.

This is in contrast with the public hospital setting, where under the Health (Amendment) Act 2013 a per diemcharge applies when a patient is admitted to hospital and the patient opts to be treated on a private basis. Health insurers cannot negotiate with the HSE and the rates are set by legislation. There is an objective in setting such charges from public hospitals to reduce the subsidy to private practice, including the changes that were made following the 2010 Comptroller and Auditor General report. It should be noted that in recent years there has been no increase in private charges by public hospitals, notwithstanding the significant increase in costs, including salaries.

My colleague the Minister for Health has no role in the commercial decisions of any health insurer, and has no role in the charges for accommodation and other services that apply in any private hospital. It is neither possible nor appropriate to comment on individual procedures without knowing the full circumstances and clinical decisions involved.

In general terms, care provided in a hospital setting will always be more expensive than care provided in a community setting and surgical procedures are considerably more expensive than medical procedures.

I note that there was a 1% decrease in claims paid by insurers last year, primarily because of a drop in insurance claims paid to public hospitals.

Significantly, from the perspective of the individual patient, it should be noted that in our community-rated health insurance market, an individual’s premium will not be affected by his or her own claims history. By law, insurers are not allowed to charge an individual a higher premium based on any of the individual’s personal circumstances. Instead, the premium for a health insurance plan is set at a rate where insurers will cover the expected claims costs that will arise based on the coverage received by their customers who are availing of that plan.

6 o’clock

Our community-rated private health insurance market is underpinned by a risk equalisation scheme. The scheme involves a community rating levy collected by the Revenue Commissioners from insurers in respect of all policies written. All of the moneys collected are paid over to the risk equalisation fund administered by the independent regulator, the Health Insurance Authority, HIA. The authority then redistributes the fund back to the market through credits payable to insurers in respect of insured lives to offset some of the additional cost of insuring older and less healthy members. The scheme is Exchequer neutral, with neither a cost nor a benefit to the State.

John Lahart (Dublin South West, Fianna Fail)
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I thank the Minister of State for his response. The consultants' costs are not being questioned in this case. I take his point on the State having no role in charging for accommodation. Is he not even half scandalised by the cost? There has to be a trickle-down impact from the charging of more than €7,000 for an "overnight stay" in a semi-private room in a private hospital. I have been informed by people who know far more about this than I do that the equivalent stay in a public hospital for the same procedure costs €1,000. The Minister of State has explained why and said that legislation is covering it. He said €1,000 does not cover the cost. There is no way, however, it would cost €7,000.

Many constituents have shown politicians, including the Minister of State, bills received for treatment covered by private health insurers in respect of which they have been pleasantly surprised by the cost of the consultant or surgeon but absolutely outraged by, and left gasping at, the cost of the hospital facilities, even for the shortest of stays, particularly where there has not been an overnight stay. I realise there is a cost associated with equipment, plant and ancillary staff. Would it not help, however, if the insurer provided to the subscriber a detailed breakdown of exactly where every single cent of the sum in excess of €7,000 went.? If there are hundreds of patients in a hospital in any given week, millions of euro are paid over by health insurers. I have read reports that the payouts last year were marginally lower, resulting in marginally lower premiums for people. Given, however, the increases in the cost of living experienced by people over the past year, including in the cost of motor and health insurance, surely there is something the Government can do as opposed to just reciting the law and the negotiating stance of health insurers. Surely the Government could do something for the insurer when it sees the outrageous amounts health insurers are charged by private hospitals.

Finian McGrath (Dublin Bay North, Independent)
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I thank the Deputy. I take his point on excessive charges considering that the cost of a routine procedure exceeded €8,000. The procedure in question was a stenting of the heart. I take the Deputy's point that his constituents remain unhappy about the rate of the VHI charge. These are genuine concerns.

He asked what we are going to do. Of course we must try to do something about this. The Government and I are committed to bringing in dynamic changes to improve our public healthcare system under Sláintecare, ensuring that the right care is provided by the right person in the right place. Private hospitals have, and will continue to have, an important role in our national health system. In future, however, I hope patients will be able to make an informed choice between receiving care in a private hospital, using their health insurance or another payment method, and receiving care in a world-class public hospital system. That is our plan and what we intend to do. We must also examine the issue of cost. Patients and Deputy Lahart should note my focus must always be on the safety of the patient. If it costs a little extra to insure and to save a person's life, I will be strongly supportive of that position. Where public moneys are involved in public health services, there has to be accountability and transparency. Above all, we have to have a quality health service.