New legislation works against UHI

The recent passing of the “Health (Amendment) Act 2013”  which enables public hospitals to charge private health insurers for beds occupied by insured patients regardless of the bed they occupy, works contrary to both the aims and building blocks of Universal Health Insurance, writes Catherine Whelan.

It is just over two years since the Minister for Health set out his vision of the reform required in the health sector; the fundamental plank of which is the introduction of Universal Health Insurance (UHI), which aims to deliver a health system that provides equitable access to high quality care based on need rather than affordability.

Catherine Whelan
Catherine Whelan

As a sector that cares for one in every five patients nationally and operates almost one-third of the country’s acute hospitals, the IHAI is strongly supportive of this principle.   It is our view that a high performance health system should provide patients with easy access to quality services at an affordable price.

Given the ambitious intention to introduce UHI by 2016, all health policy decisions should maintain a direction of travel consistent with the ultimate strategic aims of the UHI system and be supportive of the stated “building blocks” of the initiative, which include: reducing waiting times in public hospitals and reform of the private health insurance market.

The recent passing of the “Health (Amendment) Act 2013” works contrary to both the aims and building blocks of UHI.

The legislation will result in insured patients being charged for a standard of care that they are already entitled to as citizens of the state.

Section 13 of the Act enables public hospitals to charge private health insurers for beds occupied by insured patients, regardless of the bed they occupy.  The legislation leads to the effective privatisation of all beds within the public hospital system, with all beds now “chargeable” once occupied by a patient who has indicated that they have private health insurance.

The legislation was initially targeted to raise €120m per annum in additional income for the HSE; however, the Minister recently indicated that he intends to raise €30m in 2014 from the initiative.

The consequence, (possibly unintended), of the legislation will run contrary to the intention to improve the affordability, access and quality of care for patients under UHI.

Affordability

Private health insurance premiums have risen substantially in recent years as a result of both insurer-driven increases and higher health insurance levies sanctioned by the Minister.

Insurance Ireland indicated in June 2013 that this legislation will lead to an increase of approximately 30 per cent in insurance premiums, primarily because all insured patients cared for within public hospitals are now chargeable to their insurer.  Insurers have no control over the cost of that care as the “Per Diem” rate is set by the Minister; this rate increased by 41  per cent between 2009 and 2010.  In contrast, the prices which health insurers negotiate with private providers reduced by six per cent in the same period.

A total of 169,000 people have left the private health insurance market since December 2011 and are now fully reliant on the public hospital system for their care.  A further increase in premiums, particularly anything approaching 30 per cent, will undoubtedly further destabilise the private health insurance market and lead to greater pressure on an already overburdened public hospital system.

Access

Historically, the effective 20 per cent bed “cap” underlined the primary objective of public hospitals of providing care to uninsured patients.  The designation of all beds as chargeable and the setting of an income target for the initiative will make it increasingly challenging for public hospitals to meet the needs, particularly of public patients, from existing capacity.  This is at a time when spare capacity exists within the independent sector which is currently unutilised.

An inevitable consequence is that insured patients will face less choice in the independent hospital sector as some private hospitals will inevitably close due to reduced patient numbers and increased commercial pressure from insurers.

Quality

Over two million people purchase health insurance with the expectation that, when needed, it will entitle them to easier, quicker access to the care they require. The legislation will result in insured patients being charged for a standard of care that they are already entitled to as citizens of the state. Put simply, this means that the private health insurance system is in effect defraying the cost of the provision of public health care.

The strategic aims of the UHI initiative are in the best interest of patients, providers, insurers and health professionals.  The IHAI commends the Government’s commitment to reform but the steps to achieve it must be inclusive and look to both the short and long-term; in our view the consequence of this Act will ultimately prove more of a barrier than a pathway to delivering upon UHI.

In our view, the key to achieving a successful UHI system is to take decisions right now on the basis of the entirety of the resources that we have available to us.  While the dynamics of the healthcare system are complex and the challenges many, by involving all parties at the front line of healthcare provision, including the independent sector in the reform process, a stronger universal health system is achievable.

Catherine Whelan is Chief Executive of the Independent Hospitals Association of Ireland, which is the representative body for Ireland’s 21 independent hospitals.  IHAI members operate almost one-third of the country’s acute hospitals, care for over 400,000 patients each year, provide over 1 million bed nights per annum, including 40 per cent of the inpatient psychiatric beds, employ over 8,400 healthcare professionals and undertake c.50 per cent of all open heart surgery and 65 per cent of all spinal surgery annually.