Jan O'Sullivan (Limerick East, Labour)
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Question 431: To ask the Minister for Health and Children if the amount paid by the National Treatment Purchase Fund for procedures in private hospitals equates to the amount paid for the same procedures by private health insurers; and if she will make a statement on the matter. [33252/09]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I have emphasised to the National Treatment Purchase Fund (NTPF) the need for maximum cost-effectiveness in the discharge of its remit, consistent with providing safe and effective care, and I am satisfied that the Fund is aware of its responsibilities in this regard. I have also asked the NTPF, in its dealings with private hospitals, to seek even better value in the current year and the Fund indicates that it has already succeeded in negotiating reductions in the prices paid for certain high-volume procedures. The Fund has also stated that where acceptable prices cannot be agreed, it will not purchase the required service from the provider concerned.

The NTPF uses a number of benchmarks in determining whether the prices offered by private providers represent value for money. These include public hospital average case mix costs and, where known, the prices paid by private health insurers. The NTPF has undertaken a comparison of the average price it has paid for certain high-volume procedures with the public hospital average case mix cost for similar treatments. While it is not appropriate to draw a direct comparison between the price charged by a private hospital for a procedure and the average public hospital case mix cost, the NTPF indicates that for the treatments in question there is a reasonable correlation in average costs. In some cases the price paid by the NTPF is appreciably lower than the average case mix cost in the public hospital system.

In his Annual Report for 2008, having reviewed the relevant NTPF records, the Comptroller and Auditor General concluded that most procedures purchased from private hospitals by the NTPF cost less than the case mix-adjusted benchmark cost in the public hospital system. The initial cost payable for these procedures is necessarily set on the basis of complication-free surgery. In general, the samples examined suggest that cost uplifts are limited to cases requiring additional clinical care, the need for which was not apparent when the treatment was contracted for.