'Waiting lists must go before UHI comes in'

  • Niall Hunter, Editor

27/5/2014

The organisation representing the country's private hospitals has warned that public hospital waiting lists will have to be eliminated before the planned introduction of universal health insurance (UHI) in 2019.

Catherine Whelan, Chief Executive of the Independent Hospitals Association of Ireland (IHAI), in an interview with irishhealth.com, said it would be very difficult for UHI to operate on the basis that everyone will have equal access to care unless the current level of waiting lists ceased to exist prior to the introduction of the new system in 2019.

"One of the queries we would have about UHI is that we would assume that by the time we get to day one of UHI implementation, waiting lists will be cleared, otherwise it would be very hard to operate on the basis of a faster access principle."

Ms Whelan said in this case there was a big piece of work to be done as there are currently over 50,000 people on elective waiting lists for procedures at present and 330,000 awaiting a first-time outpatient appointment.

"We need to identify whether there is a means, before we even get to UHI, of addressing waiting lists rather than waiting until all the infrastructure is in place, because UHI is such a massive initiative with so many building blocks, so we would want to talk to the Department of Health about opportunities for us to engage with them in terms of supporting a reduction in waiting lists as best we can."

Ms Whelan said private hospitals currently have considerable spare capacity which could be used to help reduce waiting lists.

However, she points out that the IHAI, despite representing the 20 private sector hospitals that would pay a key role in the new system, has so far had no engagement with the Department of Health on how UHI would work."We've sought engagement with the Department but haven't yet been granted that access."

She stresses that since the National Treatment Purchase Fund (NTPF) was amalgamated with Health Minister James Reilly's Special Delivery Unit (SDU) in 2011, the number of public waiting list procedures carried out in private hospitals has diminished considerably.

"It's important to remember that up to May-June 2011 when it was solely the NTPF in operation, private hospitals would have treated about 200,000 people on public waiting lists."

"That scheme was ceased in that form in 2011 and replaced by the SDU, working with the NTPF, which chose to use State funds within the public hospital system to try and identify pockets of capacity that could be used to clear waiting lists."

Ms Whelan says there are minimal numbers of public waiting list procedures or treatments now being carried out in private hospitals.

"There was contact with private hospitals on an individual hospital basis at the end of last year by some public hospitals to see if they had the capacity to undertake outpatient or elective treatment work. But there is no mechanism that would offer that opportunity for using the spare capacity that is in the private sector to clear waiting lists on any sort of a regular basis."

These are challenging times for private hospitals, not least due to the fact that they can no longer rely on State initiatives to help keep them going.

Says Catherine Whelan:"Yes, until more recent years, we saw new private hospitals opening or existing centres expanding. In addition to having a considerable amount of NTPF work, there was the added factor of State-based incentives for the building of private facilities and hospitals."

But perhaps the main reason in the decline in the fortunes of private hospitals has been the huge reduction in people's incomes over the past six years, leading to private health insurance providing private hospital coverage becoming unaffordable for tens of thousands of people.

"The number of people who can potentially access private hospital care has diminished significantly - 250,000 have left the insurance market since 2008," says Ms Whelan.

"In addition to that, and this is something that's not often taken into account, the number of people who have downgraded their insurance cover is also significant."

"They may have downgraded to such an extent that they cannot access a private hospital with their level of cover- only private cover in a public hospital. This diminishes further the numbers accessing private hospitals."

Catherine Whelan believes recent signs of an upswing in the numbers taking up health insurance may be a false dawn.

"I believe when 2014 first quarter results come out soon that decline in health insurance membership that's been taking place since 2008 will be visible yet again. You are likely to see the impact of capping of tax relief on insurance subscriptions in the last Budget, which has led to further premium rises."

She says there is now huge competition between private hospitals and this has helped to drive prices and costs down. This is quite good news for the health consumer who can afford this level of care, but it has not made things easy for the private health sector. 

"Private hospitals now have fewer patients coming through the door with an increasingly lower price being paid by insurers for the care provided to these patients."

A particular bugbear for the IHAI is the fact that there isn't a level playing field in terms of setting prices for private care in private versus public hospitals.

"We can't negotiate prices for services collectively on behalf of our members with health insurers. Each individual hospital and each individual insurer negotiates a 'menu' of prices annually. These prices have been on a downward trajectory in the last number of years."

"Prices our members would agree on with health insurers tend to be in relation to procedures - or a bundle of care around procedures, but in the public hospital system the price is set by the Minister and it is a per diem rate, the cost of a bed and overnight stay. It is not related to activity."

A telling point here, Ms Whelan says, is that while the price insurers will pay private hospitals for care has been on a downward spiral in recent years, the price the same insurers are essentially forced by the State to pay public hospitals in respect of private patients has gone through the roof.

And many health consumers would feel that they get poor value for private insurance cover in public hospitals, with often little difference between public and private accommodation in these institutions.

And since January, insurers can be charged for private patient care, even if their subscribers are accommodated in a public bed.

Ms Whelan stops short of describing the private cover in public hospitals system as essentially a 'scam' designed to generate income for these institutions.

"I wouldn't use the word scam, but if I were accessing a public hospital using my PHI there is now since January every possibility that I won't necessarily be provided with private care as you might have understood it heretofore, but my insurer will still be charged."

"So even if I am in a multi-occupancy (public) ward, my insurer will be charged €819 per night, whereas before it was €75 per night (the non-medical card patient bed charge)."

"Now initially as a patient or consumer, I mightn't see the impact of that because I'm not paying out of my own pocket at that stage and my premium covers me. However, If you think it through, there is a huge impact for the consumer because insurers are seeing a big increase in their cost of claims as a direct result of the move to charge all private patients in a public hospital regardless of the type of accommodation provided."

"In order to rebalance that, insurers can either seek to increase premiums or reduce the prices they pay to providers. Most insurers have hiked their prices very significantly already this year and we haven't seen the full impact of this initiative yet. Insurers have no negotiating power to reduce prices they pay to public hospitals, as these are set by the Minister."

While it may sound like 'turkeys voting for Christmas', Catherine Whelan says the IHAI would welcome a system where waiting lists did not exist.

"We don't believe people should have to wait for the care they need. Right now, if we were to take the UHI principle of all the resources of the State being made available to patients who need it most, we could actually start treating more patients right now rather than waiting till 2019. We do have additional capacity in the independent sector."

A recent survey undertaken by the Association did show that 45% of people with private insurance indicated that the reason they chose to pay for it was because they don't want to have to wait for care.

However, Catherine Whelan says she doesn't have any sense that there is any strategy that is seeking to drive an underfunding of the public hospital system to in some way favour of the private system.

"Not from our perspective - we don't see it like that. Certainly there are huge challenges within the public hospital system in terms of budget cuts. Waiting lists that exist are capable of being addressed in a more immediate manner than they are at the moment and we have spare capacity that could be used to address that."

With UHI, on paper anyway, planning to remove the distinction between public and private care, Catherine Whelan stresses that the playing field needs to be levelled in terms of how private hospitals would operate within the new system.

"One of the questions we would have about UHI would be when we get to a point there it's rolled out and where maximum prices will exist for procedures, where will be the incentivisation or where will be the ability for any provider to be able to invest in innovation and technology."

Another concern for private hospitals under UHI, says Ms Whelan, relates to the setting setting of prices.

"There will be a maximum charge set by a pricing office for individual procedures. That will evolve out of the new Money Follows the Patient (MFP) structure in the public system. This is a system that will devise what payment is appropriate to each procedure. But the MFP price-setting mechanism excludes certain costs;  for example, MFP dies not include the cost of capital (building/developing a facility), depreciation or staff pension costs. Our concern is that the price set may excludes costs we have to meet as private providers - if these are not included then the ability of the private hospital sector to tender for care is going to be hampered.  Public hospitals would have these costs covered by the State."

As to concerns over rising costs to both consumers and the State of UHI, Ms Whelan says this is as yet an unknown entity until the 'basket' of basic care to be covered under UHI is decided on.

"This issue is fundamental and will be the bedrock on which everything will operate under UHI."

Catherine Whelan also points to questions about exactly how the UHI system will operate in terms of accessing care.

"For example, if two people need a hip replacement and one is in Galway and the other in Cork and the hospitals in Galway have no waiting time but the Cork hospitals have waiting times , Do I have to wait until the slowest or least efficient provider is in a position to provide that procedure, or not. We don't know how that's going to work in practice."

On safety and quality matters, while the IHAI stresses that its members have their quality standards independently examined and certified by recognised international bodies, and in the case of private psychiatric hospitals, by the Mental Health Commission, there may be a question mark over, for example, whether private hospitals will still provide cancer services outside the main designated public centres, under UHI.

This, says Catherine Cleary, will become clearer when a licensing system for all hospitals, public and private is introduced around 2016. "This will not be just about licensing public and private hospitals themselves but also the activities within them."

She says another major issue with UHI will be the likely need to renegotiate the current consultant contract, a potentially onerous and lengthy process.

"If you roll forward to UHI, where we won't have the concept of public and private patients, how will current consultant contracts, which in many cases include private practice rights, operate in that sort of environment? We would say this is an opportunity for us, if we are taking a holistic view, of how we best match what all patients in the country need versus the resources we have in the State in constructing a new consultant contract."

Catherine Whelan also indicates that public hospitals might have to 'up their game' under UHI, in terms of some of the facilities they provide, given that they will be competing with existing private hospitals.

"We should be focusing on what is the best global standard in terms of the setting in which we should treat people. If that dictates a lower occupancy room is the way to go then that's what we should choose on the basis of clinical information. This will drive issues like what additional investment or reconfiguration might be required by hospitals under UHI. So UHI will have this sort of implication for public as well as private hospitals."

 

 

 

 

 

 

 

 

 


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