MariaTeresa Kelly Oroz

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(No Transcript)
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Trends towards privatisation in the Health
Service
Maria-Teresa Kelly Oroz Director of Legal and
Regulatory
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Agenda

• Evolution in the Healthcare Market
• The role of Private Health Insurance in the
  Health care Market
• The Consumer Patient
• Co-location Hospitals

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Evolution of the Health Care Market

• Historically always been combination of , public,
  private and voluntary health care in Ireland
• Public hospitals generally began as work houses
  or infirmaries in the 19th Century.
• Voluntary hospitals were generally established by
  both charities and religious orders and have
  subsequently been taken over by the State or
  private enterprise.
• Private hospitals have developed more slowly over
  the years due to lack of competitors in the
  health insurance market.
• Blackrock Clinic 1986 and Mater Private Hospital
  enter market, and are classified as high tech.

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Evolution of health care

• In 1957 with the establishment of the VHI only
  those on the lowest incomes had free hospital
  treatment, middle income families were part
  subsidised and about 15 of population had no
  entitlements.
• 1979 all but those on highest incomes had free
  entitlement to hospital maintenance, and
  consultants fees in Public Beds.
• 1991 free hospital and consultant fees
  entitlement extended to all, in Public Beds.

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Evolution of health care

• Currently in excess of 50 of population have
  purchased private health insurance.
• Current situation for care
• Public care
• Publicly funded care in a private hospital NTPF
  2002
• Private care in a public hospital
• Private care in a private hospital

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Role of Private Health Insurance

• Private health insurance acts as a bulk buyer of
  health care services in the market.
• Private health insurance then acts as a
  distributor of the services provided by health
  care providers.
• Private health insurance commenced in Ireland
  with the establishment of the VHI in 1957.
• The VHI was established to provide cover for the
  small percentage of the population not subject to
  free hospital charges.

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Role of Private Health Insurance

• VHI was a de facto monopoly player in the market
  albeit there were a number of small registered
  undertakings i.e. Garda Medical Aid scheme,
  ESBMPF Scheme
• VHI although not legally bound to do so at that
  time operate under the auspices of community
  rating and open enrolment.
• VHI gained membership over the years however the
  presence of only one insurer was a deterrent to
  new private hospital providers i.e. huge
  investment risk if no coverage provided

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Role of Private health insurance

• In 1994 the first non-life directive opens the
  Irish market to competition in health insurance.
• Health insurance principles placed in
  legislation.
• 1996 BUPA Ireland enter the market
• 2001 Charlie McCreevy changes the tax regime by
  granting tax advantages to those seeking to build
  new hospitals.
• Galway Clinic opens in 2003 (first new Private
  Hospital since 1986, after closure of 3 small
  private hospitals in same period)

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Role of Private health insurance

• 2004 VIVAS Health enters the health insurance
  market
• With 3 competitors in the market new dynamics
  enter the market seeking to differentiate
  themselves, new benefits and innovation seeking
  to cover new private facilities i.e.
• Laser Eye benefits, Teeth Whitening, Stop
  Smoking, Swiftcare Clinics, Bestdoctors,
  increased competition for MRI units

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Role of Private health insurance

• While health insurers could be seen as a useful
  tool to encourage efficiencies in private care
  their power is curtailed by legislation Minimum
  Benefit Regulations
• Force insurers to fully cover all public
  hospitals.
• Price for coverage unilaterally set by Minister
• Scope of coverage unilaterally set by Minister
• Issue of Public Hospital charges set annually by
  Minister of Health for Designated Beds in Public
  Hospitals

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Role of health insurance providers

• Number of new hospital facilities have opened in
  recent years e.g. Galway Clinic, Hermitage
  Medical Clinic, Beacon Hospital
• Huge increase in other ancillary medical
  facilities i.e. MRI centres costs have
  decreased dramatically
• Growth in Private providers of Primary Care
  Touchstone, Tara Health, Seniors Care

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The Consumer Patient

• Patients now acting as consumers on health
  services.
• Want to be empowered with information and choices
  in their health facilities
• Trends in Europe and US of consumers impacting on
  health services
• Consumers making choices on health brands and
  what these represent

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The Consumer Patient

• Consumers are demanding quality and seeking to
  control their health through information e.g.
  health screening
• Consumers are looking for information on
• Quality and range of facilities
• Outcomes
• Medical professionals- qualifications, volumes ,
  outcomes
• Alternative Medicines
• Consumer not afraid to travel for treatment in
  western world - growth of immigrant European
  population
• Even the HSE now refers to the consumer as the
  Client not the patient!

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Co-located Hospitals

• Issues
• NHO 07 budget 4.2bn
• Perceived delivery failure to date
• Capacity issues
• Waiting list under NTPF

• What is it?
• Private Hospitals located on Public Hospital
  Grounds
• Built under PPP arrangement
• Concessions over 65 years with income sharing

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Co-located Hospitals

• For
• Need for acute beds
• Will free up Public hospital beds for public
  patients
• Speed up service delivery
• Improved service?
• Government (HSE) reduced cost

• Against
• Will increase private bed stock to surplus?
• Cost to HSE of additional public cases in empty
  beds
• Diffusion of services/ Quality
• Staffing?

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Co-located Hospitals

• Issues
• Unions and work practices
• Category 1 contracts Consultant numbers
• Facilities agreement ICU / ED
• Service levels
• Insurance level 2/3 or 4/5?
• Effect on Private Health Insurers

• VIVAS Health
• VHI dominance with Govt
• VHI dominance with providers
• How will Co-located get cover at level 2/3?
• Use of minimum benefit lifetime community
  rating?
• Consultant Cat numbers

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Co- location what will happen?

• Will proceed in most locations
• Will result in additional capacity
• Will result in closure of smaller private
  hospitals
• Pressure on Government to get live
• Expect Union issues
• Could develop into Preferred Provider
  arrangements
• Expect changes in legislation on minimum benefits
  e.g. Level 2 for all hospitals based on HSE rate
  balance risk rated

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Conclusion

• Patients are demanding better care in better
  facilities!