THE COUNTRY’S largest health insurance company, the VHI, is planning to introduce cuts of 10 per cent on average to fees it pays to hospital consultants.
The move to reduce the level of payments to hospital consultants for providing medical treatment to its subscribers forms part of a new fee structure set to be introduced later in the summer.
Informed sources said that while the reductions planned for some medical procedures may be higher or lower, the average cut would be 10 per cent. This would represent the second cut in VHI payment levels for hospital consultants in a year.
In July last year the insurer reduced fees paid to hospital consultants on average by 5 per cent in a move aimed at saving the company about €15 million per year.
A number of other health insurance companies in the Irish market broadly follow the fee schedule put in place by the VHI for paying consultants for procedures carried out on their subscribers.
A spokeswoman for VHI declined to comment on the planned fee reductions.
Under competition law the VHI is not allowed to negotiate on fees with the representative bodies for consultants, the Irish Hospital Consultants Association and the Irish Medical Organisation.
However, it is understood the company has given indications of its planned new reductions in fees to doctors in particular specialties in recent weeks.
Individual consultants have to decide whether to accept the new lower VHI fee schedule.
The VHI no longer publishes details of the global amount it pays out to hospital consultants. However, it was reported last year that the company paid fees of more than €280 million to about 2,200 hospital consultants in 2008 for medical procedures carried out on its subscribers.
Salary levels and fee income for hospital consultants have been hit hard as a result of the economic downturn.
In addition to the 5 per cent reduction in fees put in place by the VHI last year and the planned 10per cent reduction from this July, hospital consultants working in the State sector have experienced salary reductions and the non-implementation of increases.
In April 2009 the Government decided to withhold about €85 million in increases due to hospital consultants who signed up to a new contract.
The Government paid out the first phase of salary rises due under the terms of a new contract. The payment of the second phase was withheld due to the state of the public finances.
As part of the new contract, consultants agreed to new work practices, a longer working day and restrictions on private practice.
In January this year the Government reduced the pay of consultants working in public hospitals by between 12 per cent and 15 per cent as part of the wider cut in salaries across the public service.
In addition, allowances payable to hospital consultants have been reduced by 8 per cent.