My Account

Reform the Health Insurance Market to Generate Savings Throughout the Health Sector

Nov 14, 2012

Evidence from Private Hospitals Shows the Benefits of Competition

Chambers Ireland has today (14/11/12) called for wide-ranging reforms to Ireland’s private health insurance market. This is particularly relevant given that discussion is scheduled to take place today in the Dáil on the Health Insurance (Amendment) Bill.

Speaking this morning on the release the White Paper, “How the Private Health Insurance Market can Drive Reform of the Health Sector”, Seán Murphy, Chambers Ireland Deputy Chief Executive said, “Many of the problems evident in the health insurance market are emblematic of wider issues in the health sector and the wider public service.”

“Government must drive efficiencies to produce a sustainable health system. A number of reforms can produce significant savings that will benefit the providers of insurance, individual and business consumers, and the wider economy. Specifically, we believe that the system of Risk Equalisation is threatening intergenerational solidarity due to the high dropout rates of younger consumers and families.

Evidence from Ireland’s public and private hospitals shows how competition can drive down costs. Figures from the Department of Health show that public health costs in public hospitals have increased by 48% since 2008, while the same costs have actually decreased in private hospitals. This is a consequence of the ability of insurers to negotiate directly with private hospitals on price, quality of outcomes and length of stay, while it is in the gift of the Minister for Health to set the rates for public hospitals each year.”
Excessive costs are forcing many individuals and young families out of the market, thereby increasing the premiums of remaining customers and weakening the funding model for community rating.

Declines in private health insurance rates also places additional strain on the public health services. Price increases also raise employment costs for all employers, including from foreign direct investment sectors, who traditionally have provided health insurance.”

“We are calling on the Government and the Minister for Health to urgently review the current system to produce a more efficient and sustainable health service for the future” Murphy concluded.

The report makes a number of recommendations

1. Private health insurance reforms can deliver savings, which can drive productivity and efficiency in the broader public health system.
2. All providers in the private health insurance market must be required to conform to the standards and regulatory costs set out by the Central Bank of Ireland.
3. Any system of risk equalisation must only be an option of last resort. Younger consumer should be incentivised into the system rather than penalised out.
4. Levies on providers of health insurance should reflect current economic conditions. There is little justification for increasing the cost of doing business during a recession.
5. No new levies should be imposed on providers of private health insurance.
6. The Government should take this opportunity to identify and implement savings in the wider health service.
7. Any future Universal Health Insurance scheme must have the backing of private health insurance providers and should be structured to ensure further competition.

To download a copy of the report, click here.

-Ends-

For further information contact Amy Woods, Chambers Ireland on 01 400 4319, 086 6081605 or email amy.woods@chambers.ie.

Subscribe to our newsletter
a member of Eurochambers

Custom Website Solutions by Dara Creative*