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Health Insurance (Amendment) Bill 2012: Report and Final Stages (Continued)

Tuesday, 4 December 2012

Dáil Éireann Debate
Vol. 785 No. 1

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(Speaker Continuing)

[Deputy Denis Naughten: Information on Denis Naughten Zoom on Denis Naughten]  However, the opposite is happening because with the increase in the cost of private health insurance, young people and young families are leaving the system. We have a bizarre situation where the numbers of older people within the system are increasing. If we look at a comparison between 2009 and 2010, the number of people over the age of 65 has increased from 40.9% to 43.4%. In real terms, between 2009 and 2011, an extra 5,500 people over the age of 80 joined the health insurance system. The number of people aged between 70 and 79 in the system has increased by 9,500, while the number of people aged between 60 and 69 in the system has increased by 5,000. Older people are joining health insurance later in life, while younger people are leaving the system. If this trend continues, the only people who will be able to afford health insurance in this country will be the wealthy or people who have no other choice but to remain in the system in order to access vital health care. I have huge concerns that the trend will undermine the principle of universal health insurance, in which most of us in this House believe.

I tabled an amendment to get around the logjam of lifetime community rating on Committee Stage. I have tabled a different amendment here on Report Stage but it is based on the same principle and would encourage the Minister to sign the 2001 regulation, implement lifetime community rating and introduce some type of incentive or give an indication that there will be an incentive built into the new universal health insurance system for people within the health system whenever that happens. The Minister sees where I am coming from in respect of this and acknowledged that in his original contribution this evening. What is crucially important is that we have a timeline in respect of that. I hope that when he responds to me he can give a timeline for the implementation of lifetime community rating. Based on the evidence we have received from the health insurers and the HIA, the only mechanism that is not being used to reduce the cost of health insurance is lifetime community rating. This could have an impact on the rate of increase of health insurance costs and hopefully see a curtailment of them. This could then be followed by a reduction in the rate of health insurance costs and could encourage even more people into the system. This would then take pressure off the community rated system and allow for the implementation of universal health insurance, a principle with which we all agree in this House.

Deputy James Reilly: Information on Dr. James Reilly Zoom on Dr. James Reilly Deputy Naughten's amendment aims to encourage people to stay or become involved in health insurance and make sure they will go into universal health insurance. The key point there is that universal health insurance will be mandatory so there is no need for incentives to get people into universal health insurance. It will be the law and we have a mandate from the people to do that. It is in our programme for Government and our electoral programme.

The White Paper on universal health insurance, which will be published next year as opposed to the paper which is coming out in a couple of weeks, will outline the details of the universal health insurance model in addition to the estimated costs and financing mechanisms associated with the introduction of universal health insurance. There are many key decisions that require careful planning and sequencing over the coming years and primary legislation, which will be required to underpin universal health insurance, will be developed in the future as part of that process.

The health insurance (risk equalisation) Bill provides for the introduction of a permanent scheme of risk equalisation. Therefore, I do not consider it appropriate to insert an amendment in the current Bill which would have the effect of compelling me to introduce lifetime community rating. However, as I have said, I am disposed to consider any measures that may assist with ensuring the maintenance of a healthy and functioning private health insurance market and will request my officials to further consider the implications of introducing lifetime community rating at this time under the existing health insurance legislation as part of the measures to ensure the sustainability of the private health insurance market in the transition to a universal health insurance system.

I am aware of the concerns of the Deputies and consumers alike about the cost of health insurance and I have outlined some of the areas which I want to tackle next. In fairness to the VHI, I must advise the House that last week, the VHI reported that its cost containment programme has delivered savings of €200 million since 2009 by applying various cost containment measures including reducing consultants' fees by 15% and reducing the prices paid for various procedures by between 13% and 53%. For example, the professional fee for the insertion of an ordinary stent has gone down from €1,100 to €200 and the cost of an MRI scan has been reduced from €650 to €160. However, I have informed the committee that I came across a patient for whom an MRI scan cost €8,000 because he was kept in hospital awaiting it. That is the difficulty of the current situation where we pay by the day instead of per procedure. Paying per procedure would definitely clear out that element.

The VHI has also introduced a payment system for radiologists and pathologists based on the national quality benchmarks which will lead to reduced length of stay and has the potential to save another €42 million for the VHI. It has also focused on claims recovery through the work of its special investigation unit. This is the audit I spoke about - a much more robust audit will be required. The VHI continues to focus on the issues and the findings of an external review of its claims entitled the Millman review.

The challenge for all of us must be to ensure that the health market remains viable and relevant, in particular given its role in supporting the provision of services in the public sector but also as we prepare for the transition to universal health insurance. Our public health sector has led the way in some aspects of this through the activities of the clinical care programmes, which have been far more efficient in recent times. Indeed, the VHI and some of the private hospitals are engaging with the clinical care programmes to make sure that sort of work ethic and protocols are put in place in their own hospitals.

I hope to have the interim paper from the implementation group on universal health insurance by 18 or 19 December 2012. I will not accept Deputy Naughten's amendment. I hope he will understand the reason but I am committed to further examining with my officials the issue of lifetime community rating.

Deputy Denis Naughten: Information on Denis Naughten Zoom on Denis Naughten I thank the Minister for his response. I accept that there is no need for an incentive to get people into universal health insurance. Under the Dutch system, 90% of people were already in a voluntary health insurance system before they introduced universal health insurance in that jurisdiction. If trends continue we could be down to less than 40% of the population with private health insurance in advance of universal health insurance coming in. It makes it far more difficult when one must fund that big a differential compared to what was the situation in the Netherlands. That is why I am saying it is important that we try to keep people within the present voluntary health insurance system and encourage new people to come in. I and everyone involved in the industry believe that lifetime community rating is a mechanism to do that. The difficulty is that it has taken 11 years for the Department to look at this situation, yet no decision has been made. That is why I am asking for a timeline in respect of it.

We all agree with the point the Minister made about moving from a situation where one pays by the day to paying by procedure. The difficulty, as the Minister knows, is that this legislation provides for the opposite. One pays by the length of time one is in the hospital bed. It is a weakness within the legislation that there is no sunset clause built into that provision so that it can be removed from the legislation within the next 12 months.

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