In a row that has been brewing for some time, health insurance companies are getting increasingly frustrated with public hospitals that charge patients the cost of a private bed when they are in a public ward.
While you might think it is an issue for the Health Service Executive (HSE) and insurers to sort out, you could be wrong, because it is starting to affect health insurance premiums.
So what do you need to know about the issue – and should you, as some suggest, refuse to declare as a private patient when attending hospital via A&E?
How it began
In 2014, then minister for health
James Reilly
introduced a measure aimed at getting insurers to cover the full costs of their patients in public hospitals, as it was “neither fair, reasonable nor acceptable” for private patients to be subsidised in the public health system.
It meant that a private patient in a public hospital would pay private patient rates (or at least their insurer would) ranging from €813 for a bed in a ward (capped at 180 nights) or €1,000 for a private room. Public patients on the other hand pay a nightly rate of €75 which is capped at €750 in any 12-month period.
Until then, insurers only had to pay for certain beds which were designated private in a hospital, and this was capped at 20 per cent. The measure, it was hoped, would stop public hospitals having to subsidise private patients who were admitted by their consultant.
However, in the absence of the 20 per cent cap, patients with private health insurance admitted to hospital via A&E will now be asked to declare whether or not they are attending as a private, or a public patient.
While Dónal Clancy, managing director of Laya Healthcare, says he accepts the bona fides of the original aim of the measure, "the new Minister [for health] needs to examine what's going on in practice".
The procedure
If you enter hospital via A&E, you will be asked to sign a form indicating how you will pay for your treatment.
All Irish residents are entitled to treatment in the public system, and there is no compunction on them to declare as a private patient, even if they have health insurance.
However, some say that patients are now being asked whether or not they have health insurance, even if it’s not essential that they do so.
“A public patient attending emergency department does not need to declare as a private patient. In the event that a patient opts to be treated privately then they waive their right to be treated a public patient,” says the Health Service Executive .
Of course, private patients offer a potential bonanza for public hospitals, given that they can charge insurers up to 11 times the cost of a public hospital bed. If you do waive your rights to treatment in the public sector your health insurer will be billed €813 a night instead of €75 (there are many exceptions to this €75 fee such as for medical-card holders).
Where someone with insurance is offered a private room, or faster treatment with a private consultant, declaring as a private patient makes sense.
“I wouldn’t advise everyone not to sign it – if you’re getting treated privately and you’re getting an additional service, I don’t think there’s an issue, you should sign it,” says Clancy. “There is no problem where we get a service, a differential service – we expect to pay for it.”
But if the treatment is the same, should the insurer be asked to pay more? Some insurers have been told by hospitals that they will claim for every single thing they possibly can, while it has also been argued that charging Irish residents extra, who have already paid for public healthcare through their taxes, is effectively a double payment.
Dermot Goode of Total Health Cover says no, suggesting that the "targeting" of health insurance patients is "absolutely morally wrong".
“Nothing will change [if you declare as a private patient] – you’ll have the same bed,” says Goode, arguing instead that people should be aware that they are entitled to say they don’t want to sign the form.
“Be very, very careful –– make sure you’re getting something extra. In most cases you won’t if you’ve gone in as a public patient,” he says, suggesting that PHI patients first ask whether or not a private room is available before signing the form.
And opting to stay as a public patient doesn’t mean you can’t switch to a private patient at some point in the future. “You can always skip tracks if you want to,” says Goode.
If, for example, you are discharged from hospital but you find that you still have issues, if you attend a consultant and they refer you to hospital again, this time you will be entering from the outset as a private patient, and the issue won’t arise.
Price hikes
When the measure was introduced in 2014, insurers warned that it could drive up the cost of insurance premiums by about 30 per cent – and this now seems to be materialising.
In May for example, Laya said its 7 per cent price increase, which came in on July 1st, was due to the public bed issue which was “driving an unsustainable spike in the cost and volume of claims”.
According to Laya, “charging a huge difference in the cost per night to private patients who occupy a public bed with no additional services is inequitable”.
Indeed, Clancy estimates that the cost of the measure – originally anticipated to be of the order of €40-€50 million – will be north of €100 million for 2015 “and the trend hasn’t stopped”.
And, of course, it’s not just the cost of the bed; once you’re a private patient everyone who sees you – be they a consultant, anaesthetist or physiotherapist – can you charge you separately for their services. “Everyone who touches you can issue you with a private bill,” says Goode.
This means that claims are rising. Clancy says that Laya Healthcare has experienced a 26 per cent increase in the cost of claims from public hospitals since the measure was introduced in 2014, and a 10 per cent increase in the volume of claims, which can be directly attributed to the public bed re-designation charge.
Impact on consumers
But hold up, you might say. Isn’t that just why a patient has health insurance? So that they can use it? This is the conundrum facing patients. Declare as a private patient and you may or may not get a different level of service than you would in the public sector but your insurer will certainly be charged considerably more, which could put more pressure on premiums.
Indeed, further price hikes could be on the way as the full impact of the measure is felt. “This year we’re hoping we’ve allowed for enough,” says Clancy, refusing to rule out additional increases.
But on the other hand, if you don’t use your private health insurance – something which you are paying handsomely for after all – how likely is it that insurers will act in conjunction with this and cut their premiums?
