Review of Measures to Reduce Costs in the Private Health
Insurance Market 2014
Independent Report to the Minister for Health and
Health Insurance Council
October 2014
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TABLE OF CONTENTS
Acknowledgements………………………………………………………
page 4
Chapter 1 Introduction………………………………………………….
page 5
Chapter 2 Analysis of Claims Cost Data - Health Insurance Authority
page 9
2. 1
Introduction
……………………………………………………..
page 9
2.2
Recent Irish Claims Cost Experience………………………………
page 9
2.3
Impact of Ageing…………………………………………………..
page 13
2.4
Analysis of Claims Data Submitted by Insurers……………………..
page 19
Chapter 3 Summary of Submissions Received…………………………
page 26
Introduction……………………………………………………………….
page 26
3.1
Summary of HSE Submission……………………………………..
page 26
3.2
Summary of IHAI Submission (non-psychiatric elements)………..
page 28
3.3
Summary of Insurance Ireland Submission……………………….
page 30
3.4
Summary of IHCA Submission ………..…………………………
page 35
3.5
Summary of Society of Actuaries in Ireland Submission…………
page 37
3.6
Summary of Submissions from Saint John of God Hospital,
St. Patrick’s Mental Health Services and IHAI on Industry
Approach to Private Psychiatry……………………………………..
page 38
Chapter 4 Chairman’s Observations and Recommendations …………
page 41
Introduction…………………………………………………………………
page 41
4.1
Key Recommendations Phase 1 Interim Report……………………
page 41
4.2
Data to Analyse Trends in Industry……………………………….
page 42
4.3
Private Health Insurance Claims Cost Analysis…………………….
page 44
4.4
Care Setting and Resources…………………………………………
page 46
4.5
Age Structure………………………………………………………
page 47
4.6
Clinical Audit and Utilisation Management……………………….
page 48
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4.7
Industry Approach to Private Psychiatry……………………………
page 49
4.8
Fraud, Waste & Abuse………………………………………………
page 50
4.9
Chronic Disease Management………………………………………
page 50
4.10
Claims Processing…………………………………………………..
page 50
4.11
Admission & Discharge Processes………………………………….
page 51
4.12
Private A&E………………………………………………………..
page 52
Chapter 5 Conclusion.………………………………………………………
page 53
Appendix 1 Status Report on Recommendations made in Phase 1 Report
page 55
Appendix 2 HIA Claims Cost Data…………………………………………
page 62
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ACKNOWLEDGEMENTS
I would like to acknowledge the support and co-operation I received from all participants in
this review – the health insurers, the Health Insurance Authority, and the Department of
Health.
Chair, Review Group
October 2014
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Chapter 1 Introduction
1.1 Introduction
On 27 June 2013, I was appointed by the Minister for Health to Chair a Review Group under
the auspices of the Consultative Forum on Health Insurance, to work with the insurance
companies and the Department of Health to effect real cost reductions in the private health
insurance market. The work of the Group has been conducted in two phases, with the first
phase report published on 26 December 2013.
The Phase 1 report sets out the context, establishment, membership and terms of reference for
both phases of the Groups’ work. The report also outlines the legislative provisions for
private health insurance in Ireland, the objectives of both phases of the review and the
approach and methodology followed. (Membership and Terms of Reference for the Group
are reproduced at 1.2 below for reference).
On completion of Phase 1 of the review, I reported to the Minister for Health and the Health
Insurance Council, and following Ministerial approval, the Group moved to Phase 2 of its
review.
Work on Phase 2 has now been completed and I have reported to the Minister and the Health
Insurance Council, with the results of this work now presented in this report. In particular,
Phase 2 of the process focused on the compilation and analysis by the Health Insurance
Authority (HIA) of claims data to assess the cost drivers for health insurance, the effects of
medical technology and innovations on costs, and claims processing issues. As with Phase 1,
a number of plenary meetings were held, and I also engaged in a series of bi-lateral meetings
with health insurers and relevant stakeholders. I also received a number of submissions from
relevant stakeholders which were examined and considered under the Phase 2 Review. A
summary of these submissions is contained in Chapter 3 of this report. (Full text of the
submissions is available to view on the Department of Health’s web-site at
.http://www.health.gov.ie.
1.2 Membership and Terms of Reference
Membership of the Review Group is comprised of representatives of the four commercial
health insurers – Aviva Health Insurance, GloHealth, Laya Healthcare and VHI Healthcare,
the Department of Health and the Health Insurance Authority. The Secretariat is provided by
the Department of Health.
The following Terms of Reference were agreed by the Group for Phase 1 and Phase 2 of the
review process:
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The Minister for Health and the four commercial private health insurers have agreed to a
process to effect real cost reduction/cost management in the Irish private health insurance
market to ensure its long term sustainability.
The Review Group will be chaired by Mr. Pat McLoughlin. The Review Group will also
comprise representatives from the Department of Health and the HIA and will be mindful of
the need to respect competition law in its deliberations. All parties will be represented by
two persons. As appropriate, the Chairman may meet other stakeholders for their input in
order to complete the review.
The purpose/objective of the Review Group is to consider/identify effective industry-wide
cost reduction/cost management strategies for the private health insurance market (scope to
include but not limited to public hospitals, private hospitals and consultants). It is envisaged
that this will be a two stage process as follows:
Phase 1 – Review Group/Chair to produce a high-level analysis of measures identified to
reduce/manage private health insurance costs to include proposals or recommendations on the
following broad themes:










Understanding the drivers of significant increase in claims in recent years
Utilisation Management
Clinical audit - provision of treatment in an appropriate medical setting to appropriate care
standards, to include clarification or common understanding of day case & side room/care
pathways/interaction with HSE National Clinical Programmes
Efficiency improvements in length of stay, admission processes, discharge management and
claims processing, including fraud and maladministration
Provider reviews – public and private
Clarification on classification of consultants
Measures to promote participation of younger members in the PHI market
Standard Plan for PHI (will be further progressed through the deliberations of the existing
CFHI Subgroup)
Effective commercial management of proprietary drugs/utilisation of generic drugs
Agreement to set targets for cost reduction/management.
Phase 1 is to be completed by end October, with the Independent Chair to report
simultaneously to the Minister for Health and the Health Insurance Council.
Phase 2 – Following Stage 1, the Review Group will undertake a detailed evaluation to
further develop its Stage 1 high level analysis and to include proposals/recommendations on
the following:



Audit of the volume of procedures
An examination of the base cost of claims - to include agreement on the benchmark costs of
a comprehensive range of procedures
Further development of clinical audit and interaction with HSE Clinical Programmes
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









Measures to introduce procedure-based payments in public hospitals and clarity on what is
chargeable, including negotiation of rates and rewards for efficiency and outcomes
Measures to curb year-on year increases in claims through wider/more targeted use of claims
management tools
Consideration of possible ways to lessen the impact of medical technology /innovation on
PHI costs, i.e. through cost effectiveness analysis. This will include the development of
initiatives to manage procurement
Legislative measures that might be required to address cost reductions
Agreement on measures to promote participation of younger members in the market, e.g.
discounts on premiums for 23-29yr olds ; introduction of LCR (will be further progressed
through the deliberations of the existing CFHI Subgroup)
Industry approach to private A&Es
Industry approach to private psychiatry
Ways to clarify certain processes and structures which influence charges to private health
insurers, e.g. consultant classifications, consultant charges for private patients, determination
of public/private patient status at admission, completeness of claims information from public
hospitals
Further efficiency improvements in relation to length of stay, admission & discharge
procedures and claims processing
Increased utilisation of appropriate Primary Care settings.
Phase 2 is to be completed within six months, with the Chair to report simultaneously to the
Minister for Health and the Health Insurance Council.
Secretariat to the Review Group will be provided by the Department of Health.
1.3 Updated Figures
Since publication of the Phase 1 report the HIA has collated data for 2013, based on
Information Returns submitted by health insurers for July to December 2013; this data is
referenced in the Phase 2 report. The HIA has also collated data for the first quarter of 2014.
At the end of June 2014 there were 2,017,087 people insured with inpatient health insurance
plans, or 43.9% of the population. This compares with 2,058,239 at the end of June 2013 and
represents a reduction in the number of insured people of almost 41,000 over the previous 12
months. The market peaked in 2008 with 2,297,000 people insured at that time.
In 2013, Irish open membership private health insurers paid claims of €1,783m which
represents a 4% decrease compared to 2012 levels of €1,856m. Between 2004 and 2008,
there was an increase of 6.7% in the average claim per insured person. Between 2008 and
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2012, there was an increase of 12.6% per insured person. The average cost of claims paid
(prescribed benefit) per insured person fell by 2% between 2012 and 2013. The HIA notes
that while a reduction in the average claims costs per person is positive, it is based on data for
claims paid and so is impacted by speed of claims payments. Further data will be required in
order to determine whether reduced claims paid in 2013 is part of a change in trend.
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Chapter 2 Analysis of Claims Cost Data - Health Insurance Authority
2.1 Introduction
Early in my work, we agreed that it would be important to assess the drivers behind the
growth in private health insurance costs. As part of this analysis, the Health Insurance
Authority submitted a paper on health insurance claims costs to the Department of Health and
the Consultative Forum on Health Insurance, in July 2013.
That paper discussed the Irish experience in relation to health insurance claims costs and
examined general methods used to control private health insurance claims costs, in principle
and in practice, drawing on examples from other jurisdictions.
Subsequently it was agreed under the Consultative Forum that insurers would submit further
data on claims costs broken down by procedure to the Health Insurance Authority and that
the Authority would analyse that data.
This Chapter updates the analyses included in the July 2013 paper and adds an analysis of the
data referred to above.
This data supports the indications in earlier analyses that claims costs increases between 2007
and 2012 arose mainly in relation to increased activity in private hospitals and that this
increased activity is not driven primarily by demographic factors.
It is not possible to fully determine the impact that changed casemix has on claims costs from
the data available because the data does not provide information on diagnosis. In order to
conduct such an analysis, it would be necessary for insurers to collect and submit data on
diagnosis in a consistent way. This is not currently happening but the Minister for Health
intends to introduce measures that will facilitate the collection of data of this kind.
2.2 Recent Irish Claims Experience
Around €1.9bn was paid in claims by Irish private health insurers in 2013. The figure is
broken down by insurer in the table below.
Insurer
Aviva Health
Glo Health
Laya Healthcare
Vhi Healthcare
Restricted Membership
Undertakings (estimate)
Total
Claims Paid in 2013 (€m)
229
9
314
1,232
110
1,893
Proportion of Total
12%
0%
17%
65%
6%
100%
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Of this total, 92% relates to hospital stays coming within the definition of prescribed health
services and is paid to private hospitals (46%), public hospitals (26%) and hospital
consultants (20%). The remaining 8% relates mainly to outpatient benefits, or to benefits
(including hospital benefits) that do not come within the definition of prescribed health
services.
Since 2004, open membership insurers have submitted details of “prescribed benefits” to the
Health Insurance Authority. “Prescribed benefits” include approximately 80% of the cost of
claims paid by open membership insurers. The chart below shows how prescribed benefits
have increased for open membership insurers since 2004. In calculating the averages,
children are counted as 1/3rd in order to reflect the lower premium payable.
In the four years between 2004 and 2008, the average claim per insured person (measured by
market prescribed benefit) increased by 6.7% p.a. on average. During this period, the
consumer price index grew by an average of 3.9% p.a.
In the four years between 2008 and 2012, the average prescribed benefit per insured person
grew by 12.6% p.a. During this period, the consumer price index fell by an average of 0.3%
p.a.
In 2013, the average prescribed benefit per insured person fell by 2.2%, the first time this
figure decreased since the Authority started receiving this data.
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Increased Utilisation
The trend in recent years in the average number of treatment days per insured person is
shown in the following chart. Again, children are counted as 1/3rd in order to reflect the
lower premium payable.
Between 2004 and 2008 the average number of treatment days per insured person fell by
12%. Between 2008 and 2012 the average number of treatment days per insured person
increased by 45%. It can be seen, therefore, that the increase in average claim per member
between 2008 and 2012 (61%) largely results from increased usage of hospital services, with
the utilisation measure increasing by (45%). The remainder of the increase results from
increased cost per utilisation (11%).
In 2013, the average number of hospital treatment days per insured person fell by 3%,
indicating that the reduction in average claims cost per insured person in 2013 was driven by
reduced utilisation.
The following chart shows the variation in the total number of bed nights (counting each day
patient visit as 1 bed night) between 2004 and 2013.
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Total Bednights Each Year
(Daypatient counts as 1 bednight)
1800000
1600000
Number of Bednights
1400000
1200000
1000000
800000
600000
400000
200000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
As can be seen from the chart, the total number of bed-nights in the market was relatively
unchanged between 2004 and 2008. Between 2008 and 2009, the total number of bed nights
in the market grew by 274,000 in the year (or c. 750 bed-nights per day). Between 2009 and
2012 the total number of bed-nights in the market increased by a further 167,000. Between
2012 and 2013 the total number of bed nights reduced by c. 100,000.
Increased private hospital capacity can lead to increased utilisation of private hospital
accommodation by meeting previously unmet demand (including by providing services that
were previously not available), meeting increasing demand (for example as a result of ageing)
or through supplier led demand (a common feature of healthcare markets). A number of new
private hospitals were added to private health insurance contracts between 2004 and 2009,
viz:





The Galway Clinic, covered by private health insurance since 2004, 146 beds
The Hermitage Medical Clinic, covered since 2007, 101 beds
The Whitfield Clinic, covered since 2007, 64 beds (inpatient and day patient)
The Beacon Clinic, covered since 2008, “capacity for 214 beds”
The Santry Sports Clinic, covered since 2008, 62 beds (inpatient and day patient)
(Sources: Insurance policy documents, www.galwayclinic.com,
www.hermitageclinic.ie, www.waterfordchamber.com, www.beaconhospital.ie,
www.sportssurgeryclinic.com )
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From 2010, the total number of private hospital beds continued to increase, viz;

The Blackrock Clinic main extension opened in October 2010 increasing by 50
inpatient bed capacity to 170 and providing for an expanded 30 bed day surgery unit,
as well as a new A&E department.
 St Vincent’s Private Hospital moved to a new building, which opened in November
2010 with 236 inpatient beds (previously 164) and additionally, an expanded day
case/day surgery facility with 54 beds (previously 36).
 Mater Private Cork opened in January 2013 with 75 beds with business from the old
Shanakiel Hospital (44 beds) transferring to it.
(Sources: www.svph.ie, www.blackrock-clinic.ie, www.materprivate.ie,
www.irishexaminer.com )
The substantial change in the role of the National Treatment Purchase Fund has almost
eliminated demand for private hospital stays from publicly funded patients and made
additional capacity available for use in private hospitals by insurance funded private patients.
It can be seen that there has been a very substantial increase in private hospital capacity. The
Acute Hospital Bed Capacity Review: A Preferred Health System in Ireland to 2020,
published by the HSE in 2007, stated that in May 2007, there were 1,654 private hospital inpatient beds and 272 day case bed/places. This was in addition to 2,227 designated inpatient
and 229 day case private beds in public hospitals and not counting 200 beds in smaller private
clinics. The report also stated that “It is conservatively estimated that there is a surplus of
130 private patient beds in Ireland. This increases to 900 with those currently in plan.”
2.3 Impact of Ageing
The health insurance market has been ageing since the Authority commenced receiving data
on the age structure of the market in 2003. The rate of ageing increased substantially when
the insured population began to decline.
The ageing of the private health insurance market is a result of the following:



Ageing of the general population.
Increased private health insurance penetration amongst older people.
Reduced private health insurance uptake amongst younger people.
Ageing of the General Population
The age structure of the Irish population in the last three censuses is set out in the following
table, along with the age structure in the 2013 population estimate produced by the Central
Statistics Office (CSO).
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Age Structure of the Irish Population in the Last Three Censuses and in 2013 Estimate
Age Group
2002
2006
2011
2013 (Est)
0-19
29.1%
27.2%
27.5%
27.9%
20-29
16.4%
16.9%
14.3%
12.6%
30-39
15.2%
15.8%
16.5%
16.4%
40-49
13.3%
13.6%
13.9%
14.3%
50-59
10.9%
11.1%
11.3%
11.6%
60-69
7.3%
7.7%
8.6%
9.0%
70-79
5.2%
5.0%
5.1%
5.3%
80+
2.6%
2.7%
2.8%
2.9%
It can be seen that the general population aged somewhat between 2002 and 2013, with the
proportion of the population aged over 60 increasing from 15.1% to 17.2%. Most of this
ageing took place between 2006 and 2013, during which the proportion of the population
aged over 60 increased from 15.3% to 17.2%. In particular, the fastest increase in the
proportion of the population aged over 60 took place between 2011 and 2013 when the
proportion increased from 16.4% to 17.2%. The CSO is projecting that the rate of ageing of
the population will continue, with the proportion over the age of 60 exceeding 20% of the
population by 2021.
Increased Private Health Insurance Penetration amongst Older People
The market penetration rates of open membership insurers (i.e. the proportions of the
population insured with an open membership insurer) over the age of 50 in the second half of
2003 and in the second half of 2013 are set out in the following table.
50-59
60-69
70-79
80+
Open Membership Insurer Penetration Rates
Age Group
2003
52%
48%
37%
26%
2013
49%
52%
49%
36%
Historically, there was a lower penetration rate for older ages, reflecting the lower take-up of
private health insurance prior to the 1990s. As people age they are likely to retain their health
insurance so that, for example, a cohort in their 60s would be likely to retain their health
insurance into their 70s. As a result, the penetration rate for those in their 70s would be
expected to be at least as high as the penetration rate that applied for those in their 60s ten
years earlier. This effect can be seen in the preceding table and would be expected to
continue for the over 80 age group, which has a market penetration rate that is much lower
than the rate applying at younger ages.
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Reduced Private Health Insurance Uptake amongst Younger People
The following table shows the number of people insured with open membership insurers by
age.
Number Insured at Year end with Open Membership Insurers by Age
(in Thousands)
Age
17 and under
18 to 29
30 to 39
40 to 49
50 to 59
60 and over
Total
2009
518
310
365
321
272
337
2,123
2010
505
284
351
315
272
351
2,078
2011
495
256
331
308
269
361
2,020
2012
479
230
312
302
266
371
1,960
2013
462
211
295
296
263
383
1,911
It can be seen that the insured population in younger adult age groups is declining at a rapid
rate. In particular, the 18-29 age group has declined 32% in four years (or 9% p.a.). The 3039 age group has also declined rapidly, by 19% in four years or by 5% p.a.
It is noted that one reason for the decline in the number insured in the 20-29 age cohort is that
this age cohort has declined significantly in the population in recent years, partly due to
emigration but also partly due to the ageing of those born in the “baby boom” of the late
seventies / early eighties. The number of people born in Ireland in 1990 (who are now aged
23) was 54,000, almost 30% lower than the 74,000 people born in 1980. While the insured
population in the 18 to 29 age group declined by 32% between 2009 and 2013, the general
population in the 20 – 29 age group declined by 23%.
On the other hand, the reduction between 2009 and 2013 of the insured populations between
the ages of 30 and 39 and between the ages of 40 and 49 have occurred in spite of increases
in the general population in these age groups over the same period.
Ireland: population in younger adult age cohorts (Source: CSO)
2009
2010
2011
2012
20-29
755
707.9
661.5
618.9
30-39
730.8
740.9
756.5
756.6
40-49
612.3
622.7
633.4
643.8
All ages
4,533.4
4,554.8
4,574.9
4,585.0
20-29
-6.2%
-6.6%
-6.4%
30-39
1.4%
2.1%
0.0%
40-49
1.7%
1.7%
1.6%
2013
578.8
751.3
654.9
4,593.1
-6.5%
-0.7%
1.7%
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Market Penetration by Age
As at the end of 2013, the market penetration rate for open membership insurers is c. 42%
(45% when restricted membership undertakings and those serving waiting periods are
included). The following chart illustrates how market penetration rates vary by age for open
membership insurers and how the rates of penetration have changed in recent years:
Market Penetration Rates by Age Group - 2009 and 2013
60%
50%
40%
End 2009
30%
End 2013
20%
10%
0%
0-17
18-29
30-39
40-49
50-59
60-69
70-79
80+
It can be seen that between 2009 and 2013, the penetration rate fell for all age groups up to
age 70 and increased for older age groups. As discussed earlier, the increase in penetration
rates at older age groups is entirely predictable and, while the penetration rate for those in
their seventies is now close to the market peak, over the next 10 years the penetration rate for
those over age 80 is likely to continue to increase from 36% to much closer to 49% (the
penetration rate currently applying in the 70-79 age group).
Amongst the younger age groups, even though the 18-29 age group has experienced the
greatest decline in insured persons, the greatest decline in penetration rates has occurred in
the 30-39 age group (a decline of 13 percentage points vs a 6 percentage point decline in the
18-29 age group).
In 2011, the Information Returns Regulations were amended to provide that insurers would
submit data to the Authority by year of age, enabling analysis of penetration rates by year of
age (rather than age group) from 2011 on. The following chart shows how penetration rates
vary by year of age at the end of 2013.
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Health Insurance Market Penetration by Age - end 2013
60%
50%
40%
30%
20%
10%
0
3
6
9
12
15
18
21
24
27
30
33
36
39
42
45
48
51
54
57
60
63
66
69
72
75
78
81
84
0%
The chart shows that, apart from infants (for whom there is no charge prior to the first
renewal date), the market penetration rate is below the market average (42%) for all ages
under age 35 and is above average for all ages from 35 up to age 82. It would be expected in
a voluntary community rated market for penetration rates at younger ages to be significantly
lower than penetration rates at older ages and this is the case here. However, it is only
between the ages of 22 and 31 (and above age 83) that the penetration rate drops below 35%.
As noted earlier, the lower penetration rate for people in their 20s is not a new feature of the
market.
Looking more closely at the dip in penetration rates for young adults, it can be seen that the
penetration rate remains relatively high (at 38%) up to age 20 after which it drops quickly. It
reaches a low point of 25% at age 25 after which it rises (again quickly) achieving the market
average penetration rate of 42% by age 35.
Financial Impact of Ageing
The ageing of the insured population currently contributes approximately 3.1% p.a. to claims
inflation. This compares with an ageing impact of approximately 1.3% when the market was
growing up to 2008. Approximately half of the current ageing impact of 3.1% relates to the
ageing of the general population and increased penetration rates in older ages. The other half
of the ageing impact (c. 1.6%) relates to reduced market penetration rates at younger ages.
17 | P a g e
Summary of Analysis of Ageing
The preceding analysis shows that there are three causes for the ageing of the insured
population:



The ageing of the general population. The portion of this factor that relates to
increasing longevity and reduced fertility rates was almost inevitable and is likely to
continue. A significant factor in recent years has also been the emigration of young
adults. This ageing of the general population has particularly impacted on the 18-29
age group. Over the last four years, the impact on claims costs of the ageing of the
general population is estimated to have been approximately 0.8% p.a.
An increase in penetration rates amongst older people. This factor was almost
inevitable as age groups with higher penetration rates get older. It will continue for
the next ten years as the penetration rates of those aged over 80 will increase from
36% to c. 50% in line with the penetration rate currently applying in the 70-79 age
group. However, the effect of this factor over the next ten years would be expected to
be lower than in the last ten years because the penetration rate in the 70-79 age group
is already close to the peak. Over the last four years, the impact of this factor is
estimated to have been approximately 0.6% p.a.
Reduced penetration rates at younger adult lives. There has been a very large
reduction in the penetration rate in the 30-39 age group (of 13 percentage points) and
smaller, but still large, reductions in the penetration rates in the 40-49 and 18-29 age
groups (of 9 and 6 percentage points respectively). Over the last four years, the
impact of this factor is estimated to have been approximately 1.6% p.a.
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2.4 Analysis of Claims Data broken down by Procedure
Data Received
The four open membership insurers provided the Health Insurance Authority with data on
claims paid broken down by year of admission, age, gender and hospital type. VHI
Healthcare and Laya Healthcare provided the data for every year from 2007 to 2012
inclusive. Aviva Health provided the data for every year from 2009 to 2012 inclusive.
GloHealth commenced operations in 2012 and, accordingly, do not have data for prior years.
The insurers also provided the data for their most costly procedures (in terms of total costs).
An important factor to bear in mind when considering the data submitted is that data on
casemix was not provided and, accordingly, it is not possible to allow for the impact of
changes in casemix. This is especially important when considering changes in total costs but
also has an impact when considering costs for individual procedures (e.g. there could be
changes in the casemixes in public or private hospitals for those receiving chemotherapy
which would not be apparent in this data). In order to allow fully for casemix changes it
would be necessary for data to be coded by diagnosis in a consistent way across the market
and submitted using a central system, such as the Hospital Inpatient Enquiry (HIPE) system.
It is noted that, in the context of both universal health insurance and the enhancement of the
risk equalisation system, the Minister for Health intends to introduce measures that will
facilitate data collection of this kind.
Analysis of Increase in Total Costs
The total cost for hospital admissions in 2007 was €1,089m1, while the total cost in the data
for hospital admissions in 2012 was €1,646m.
The figure for 2007 is 103% of the figure included in information returns to the Authority for
claims paid in respect of inpatient/day patient hospital episodes in the year 2007. This is in
the range of what would be expected in view of the fact that the information returns data
relates to claims paid in the year rather than admissions in the year.
The figure for 2012 is 96% of the figure included in information returns to the Authority for
claims paid in respect of inpatient/day patient hospital episodes in that year. Accordingly,
based on data in information returns, it would be expected that the ultimate cost of claims in
respect of 2012 admissions would be higher than the amount included in the data provided.
Some claims relating to 2012 admissions, which will ultimately be paid, would not have been
included in the data provided to the Authority because they would not yet have been paid on
the cut-off date for compiling the data. Based on discussions with insurers, it is understood
that c. 5% of 2012 claims were outstanding when the data was submitted.
1
This figure does not include data for AVIVA Health / VIVAS Health, but information returns indicate the
amount would be small in the context of the analysis.
19 | P a g e
Between 2007 and 2012, the total cost of claims included in the data submitted increased by
€557m (or 51% of the total cost in 2007).
It is important to note that, consistent with the analysis of the impact of ageing earlier in this
document, the increase in costs has not been driven primarily by demographic factors, which
the data indicates only contributed 6% to the increase in total costs (the combined effect of a
5% reduction in market size and an 11% age related increase).
Claims relating to private hospitals accounted for €450m of the increase (or 81% of the total
increase), while claims relating to public hospitals accounted for €106m (or 19% of the total
increase).
Put another way, the total cost of claims relating to private hospitals grew by 72% from
€622m to €1,072m during the period, while the total cost of claims relating to public
hospitals grew by 23% from €467m to €573m.
The data indicates that the increase in costs in private hospitals has been driven by increased
activity, with the number of admissions in private hospitals almost doubling (increase of
98%) in the period. The increase in total costs in private hospitals has been mitigated by a
reduction of 13% in average cost per admission.
Conversely, the much lower increase in total cost relating to public hospital claims has been
driven by an increase in the average cost per admission (36% increase). The number of
public hospital admissions for which insurers paid claims reduced by 10% in the period.
Overall there has been an increase of 40% in the number of insurance related admissions
between 2007 and 2012 and the average cost of claims related to these admissions has
increased by 8%.
The increase in activity is coincident with an increase in the supply of private hospital
services. In the five year period insurance related hospital admissions in private hospitals
increased from 241,000 admissions in 2007 to 477,000 admissions in 2012. In the same
period insurance related admissions in public hospitals reduced from 281,000 to 253,000.
The impact on total claims cost of average cost and activity in public and private hospitals is
summarised in the table below:
20 | P a g e
Table: Impact on total claims cost of changes in activity levels and average cost per
admission in public and private hospitals
Activity
Average Cost
Total
Public
Hospitals
-€ 55m
€ 162m
€ 106m
Private
Hospitals
€ 571m
-€ 121m
€ 450m
Total
€ 516m
€ 41m
€ 557m
The average cost per 2012 admission is similar in public and private hospitals (c. €2,250),
although there are significant differences in casemix (e.g. public hospitals account for 35% of
total claims but only 25% of claims for which data by procedure was provided) and the
average length of stay in public hospitals is much longer than in private hospitals (3.2 days
versus 2.2 days).
Data broken down by Procedure
Insurers were asked to provide data on their top 30 (by total cost) inpatient and day patient
procedures. Accordingly the data provided excludes medical cases. The data broken down
by procedure includes 37% of the total claims cost for 2012.
Analysis of this data shows similar results to the analysis of the total claims cost.
Specifically:




Total cost of these procedures increased by €194m or 46%.
This increase related mainly to private hospitals, where the increase in cost was
€176m or 62%.
The increase related mainly to an increase in activity (increase of 32%) rather than to
average cost per admission (increase of 11%).
Looking at public and private hospitals separately it can be seen that the number of
related admissions in private hospitals increased by 63%, while the average cost per
admission reduced by 13%. With respect to public hospitals, the number of related
admissions reduced by 11%, while the average cost of these admissions increased by
28%.
The impact on total claims cost for procedures for which data was provided of average cost
and activity in public and private hospitals is summarised in the table below:
21 | P a g e
Table: Impact of changes in activity levels and average cost per admission in public and
private hospitals on the total claims cost of procedures for which data was provided
Activity
Average
Cost
Total
Public Hospitals
-€ 17m
€ 36m
€ 19m
Private Hospitals
€ 177m
-€ 2m
€ 176m
Total
€ 160m
€ 34m
€ 194m
Of the €194m increase in claims related to procedures for which data was provided, the 10
procedures2 with the largest increase in claims cost account for €117m. They are listed
below, with the increase analysed as in the above table showing the contribution of
activity/average cost for private/public hospitals. In general, the tables show that the main
contribution to the increase in costs is from increased activity in private hospitals. There is
sometimes a further (much smaller) contribution from increased average cost in public
hospitals.
Tables: Impact of changes in activity levels and average cost per admission in public
and private hospitals on the total claims cost for each of the ten procedures with the
highest increase in claims cost.
Procedure 1619 – Chemotherapy - Increase in Cost 2007 - 2012
Total Increase: €23m
Percentage Increase: 64%
Public
Private
Total
Activity
€ 0m
€ 16m
€ 17m
Average Cost
€ 4m
€ 3m
€ 7m
Total
€ 4m
€ 19m
€ 23m
2
Some procedures were combined where it was considered that an increase in one procedure was displacing a
reduction in another procedure and that, accordingly, analysing the procedures separately would give
misleading results.
22 | P a g e
Procedure 3910 – Knee Replacement – Increase in Cost
Total Increase: €19m
Percentage Increase: 100%
Public
Private
Total
Activity
-€ 1m
€ 21m
€ 21m
Average Cost
€ 1m
-€ 2m
-€ 1m
Total
€ 0m
€ 20m
€ 19m
Procedure 455 – Colonoscopy – Increase in Cost 2007 – 2012
Total Increase: €18m
Percentage Increase: 46%
Public
Private
Total
Activity
€ 1m
€ 12m
€ 13m
Average Cost
€ 3m
€ 1m
€ 4m
Total
€ 4m
€ 13m
€ 18m
Procedure 5090 – Cardiac Catheterisation and Coronary Angiography
Total Increase: €13m
Percentage Increase: 159%
Public
Private
Total
Activity
€ 2m
€ 13m
€ 14m
Average Cost
€ 0m
-€ 1m
-€ 1m
Total
€ 1m
€ 12m
€ 13m
Procedure 5961 – Intracardiac Catheter Ablation – Increase in Cost 2007 – 2012
Total Increase: €11m
Percentage Increase: 226%
Public
Private
Total
Activity
€ 0m
€ 10m
€ 10m
Average Cost
€ 0m
€ 1m
€ 1m
Total
€ 0m
€ 11m
€ 11m
23 | P a g e
Procedures 3660 and 3666 – Hip Replacement – Increase in Cost 2007 - 2012
Total Increase: €10m
Percentage Increase: 31%
Public
Private
Total
Activity
-€ 3m
€ 14m
€ 11m
Average Cost
€ 1m
-€ 2m
-€ 2m
Total
-€ 2m
€ 12m
€ 10m
Procedure 2802 – Cataracts – Increase in Cost 2007 to 2012
Total Increase: €6m
Percentage Increase: 31%
Activity
Average Cost
Total
-€ 1m
€ 0m
-€ 1m
Public
€ 14m
-€ 6m
€ 8m
Private
€ 12m
-€ 6m
€ 6m
Total
Procedures 3821 and 3822 Knee Cartilage – Increase in Cost 2007 to 2012
Total Increase: €6m
Percentage Increase: 65%
Public
Private
Total
Activity
€ 0m
€ 6m
€ 5m
Average Cost
€ 0m
€ 0m
€ 0m
Total
€ 0m
€ 6m
€ 6m
Procedure 194 Upper GI Endoscopy – Increase in Cost 2007 to 2012
Total Increase: €6m
Percentage Increase: 38%
Public
Private
Total
Activity
€ 0m
€ 4m
€ 3m
Average Cost
€ 3m
€ 0m
€ 3m
Total
€ 2m
€ 4m
€ 6m
24 | P a g e
Procedure 2190 – Caesarean Delivery – Increase in Cost 2007 to 2012
Total Increase: €5m
Percentage Increase: 17%
Public
Private
Total
Activity
-€ 6m
-€ 1m
-€ 7m
Average Cost
€ 12m
€ 1m
€ 12m
Total
€ 5m
€ 0m
€ 5m
Note: References to “activity” in the above tables and throughout this document relate only to
activity in respect of which insurance claims were paid and references to cost are references
to the cost of claims paid by the insurers.
25 | P a g e
Chapter 3 Summary of Submissions Received
Introduction
As part of Phase 2 of the Review of Measures to Reduce Costs in the Private Health
Insurance Market, submissions were invited from interested parties by 14 April 2014. Seven
submissions were received from the following parties.
 Health Service Executive (HSE)
 The Independent Hospitals Association of Ireland ( IHAI)
 Insurance Ireland
 Irish Hospital Consultants Association (IHCA)
 Saint John of God Hospital
 St. Patrick’s Mental Health Services
 Society of Actuaries in Ireland (SAI)

A summary of all submissions received is provided below. As the submissions from the
IHAI, Saint John of God Hospital and St. Patrick’s Mental Health Services focused in
particular on responding to Chapter 7 of the Phase 1 report entitled ‘Industry Approach to
Private Psychiatry’, a collective summary of those submissions is provided at 3.6 below.
3.1
Summary of HSE Submission
The HSE submission states that the Phase I report contains a number of recommendations
that have significant implications for the HSE and it makes the following observations on the
report:

The HSE is in broad agreement with the thrust of the report. The private health
insurance market generates approximately €500m per annum for the public hospital
system.

The HSE is in broad agreement with recommendations 1 to 7 of the report and are
willing to work with the private health insurers on these issues.

Regarding the recommendations around claims processing, the HSE are striving to
improve internal debt management processes including the continued roll out of the
Claimsure electronic claims management system.

The issue around claims outstanding needs to be addressed through negotiations on
Terms of Business between the HSE and health insurers.

The recommendation in Chapter 11 that a person confirms details of their treatment
upon discharge has been introduced by the private health insurers by way of patient
26 | P a g e
signatures at discharge and is the most problematic issue for the HSE and Voluntary
hospitals (further details below).
The submission also lists ongoing issues between the HSE hospitals and private health
insurers as follows:

Outstanding Claims – The HSE states that claims pended by private health insurers
are increasing and that there is a lack of detail provided by insurers on the reasons
why claims are pended or not paid.

Terms of Business Agreement – The absence of such an agreement between the
HSE and private health insurers is an impediment to both parties.

Insurance Company Procedures – The HSE say there is a lack of clarity regarding
what is covered by private health insurance policies and no arbitration method for any
claims which are in dispute.

Insurers not paying for certain Day Case Procedures – Private health insurers have
taken a strict interpretation of the word ‘bed’ and have refused payment when other
treatment facilities, trollies or therapy chairs are used. The HSE position is that it is
obliged to bill for inpatient services availed of and the accommodation resource is not
relevant. The HSE see a need for clarity on what constitutes a day case versus an
outpatient procedure.

New Consultant Appointees – Delays in private health insurers recognising new
consultant appointees means that hospital claims cannot be processed.

Requests for More Information – Private health insurers are requesting more
medical information on low value claims which delays payment.

Claim Code Indicator – Private health insurers have changed codes for some
medical procedures which consultants appear to have been notified of but not
hospitals, thereby delaying action on these claims.

Medical report for Orthopaedic Claims – Orthopaedic claims will not be paid
unless accompanied by a medical report which is causing huge delays in payments.

Nominated contact person in Private Health Insurers – All hospitals identify the
lack of a direct point of contact with private health insurers as a significant problem.

Road Traffic Accidents – One private health insurer is currently requesting an
undertaking from patients that if their claim is successful the insurer will recover
100% of what they paid to the hospital, even though most RTA cases settle on a
percentage basis.

Decoupling – The HSE propose that the statutory charge for inpatient services be
decoupled from the primary and secondary Consultant’s bill.
27 | P a g e
Seeking Patient Signature on Discharge:

The main issue between the HSE and private health insurers is the new request from
private health insurers seeking patient signatures on discharge, before a public
hospital claim is processed

The same requirement has not been made of private hospitals

The HSE states that public hospitals currently do not have the IT systems or
manpower resources available to comply with this new requirement (this is supported
in the submission by a description of the impact of this new procedure on Beaumont
Hospital).

There was no prior consultation by private health insurers with the HSE on this new
requirement.

The HSE is open to finding a rational workable solution and are investigating how
that can be achieved through the HSE Claimsure system.

The introduction of the Health (Amendment) Act 2013, which made provision for the
charging of all private patients using public hospital beds, has led to some problems in
the working relationship between the HSE and private health insurers. Both the HSE
and insurers have engaged on these issues facilitated by Pat McLoughlin and Michael
Horan of Insurance Ireland. The purpose of the engagement is to improve the
working relationship between the parties.
Conclusion:

The HSE fully supports streamlining private income processes to enable faster billing
and faster payment and are willing to work with private health insurers to maximise
the benefit of any proposed changes to both parties.

Progress has been made to date, apart from the issue of signing on discharge, in
engagements between the HSE and private health insurers. The HSE is confident that
most issues between the parties can be resolved.
3.2
Summary of IHAI Submission (Non-Psychiatric Elements)
The IHAI submission noted the following points:

The important contribution made by the independent hospital sector in the provision
of acute and mental health services nationally, through the 20 hospitals operated by its
members, treating in the region of 400,000 patients annually.

The importance of private health insurance to the independent hospital sector, which
is the main source of income for the sector. IHAI therefore welcomes measures
which will ensure the long-term sustainability of the private health insurance market.
28 | P a g e

IHAI member hospitals contract on an individual basis with each health insurance
provider, with such contracts negotiated annually. This is in contrast to the
arrangements between insurers and public hospitals where the rate for the provision of
care is set by the Minister for Health.

The impact of recent national initiatives in the private health insurance market,
including the State-driven measures affecting affordability for consumers, the
charging of private patients occupying a public hospital bed, the increases by the
private health insurance companies referencing the Health (Amendment) Act 2013 as
a key driver for increases and the knock-on effect of consumers cancelling or
downgrading their cover on increasing numbers of patients seeking treatment in
public hospitals.

IHAI reiterated its support for initiatives which seek to address the affordability of
private health insurance for citizens, providing them with the option of seeking
independent hospital care.
The IHAI submission also responded to particular points made in the Phase 1 report
including:
Cost of Claims


IHAI argues that while claims costs have increased between 2008 and 2012, it does
not follow that this has been driven by an increase in the cost of services provided by
its members and that through contract negotiation, prices paid by health insurers to
providers have been reduced significantly in recent years.
Increased bed capacity in private hospitals arose as a direct result of State schemes
which incentivised provision of additional facilities; there was also demand for these
facilities due to the National Treatment Purchase Fund, under which over 20,000
public patients were treated annually.
Care Settings and Use of Resources:

While in the main private hospitals are reimbursed on a per-procedure basis, per diem
rates apply in a number of instances, particularly for mental health services.

The tariff to be developed for DRG based charging under Money Follows the Patient
(MFTP) should reflect the full economic cost of providing the service.
Age Structure of the Market:

IHAI support the introduction of lifetime community rating to incentivise younger
people to join the private health insurance market; it also wants measures to be
29 | P a g e
introduced to discourage people from taking out private health insurance cover for the
first time in later life.
Clinical Audit and Utilisation Management:

IHAI states that look back audits and utilisation reviews are now a permanent feature
of interaction between private hospitals and insurers and are reflected in contracts.
The review proposed in the Phase 1 report should include ensuring that those
undertaking such reviews are appropriately qualified.
Claims Processing:

3.3
IHAI state that the number of days taken by insurers to settle claims is increasing
significantly with more claims being pended/queried. The majority of IHAI hospitals
are currently using, or moving towards a ‘claims scanning’ system. However, despite
engagement with the main private health insurance providers no agreement has been
reached on the introduction of an E-Claims system, with the main issue relating to a
significant increase in data requirements from insurers (106 data fields in current
claim form and insurers want this increased to 164). Only one IHAI member has
decided to move forward to pilot an E-Claims system.
Summary of Insurance Ireland Submission
The Insurance Ireland submission deals with Billing Audit, Fraud, Psychiatric Benefit, the
submission from HSE, the submission from IHAI and other issues as follows:
Billing Audit:

Health insurers are carrying out greater claims scrutiny in order to contain costs,
verify appropriate care and encourage efficiencies in the healthcare system. Claim
enquiries are usually resolved directly with the healthcare provider, but if a
satisfactory resolution cannot be reached, a full billing audit process may be invoked.
The objective of a billing audit is to verify that a valid claim was submitted, that the
treatment provided was necessary, adequate and effective and that the charges are
appropriate and accurate. The multi-insurer group have also defined a dataset to
facilitate electronic claiming in Ireland.
Fraud:

The term malpractice/fraud is wide ranging including inappropriate charging, i.e.
incorrect billing for accommodation type, treatment not performed, up-coding etc.
30 | P a g e
and supplying incorrect medical information, i.e. incorrect onset dates, wrong medical
necessity information and questionable medical necessity for extended length of stay.

Under the auspices of Insurance Ireland each of the four health insurers will appoint
members from their organisations to represent them on Insurance Ireland’s Anti Fraud Forum. This Forum will address fraud, abuse and inefficiencies in the Irish
health care system, encompassing public and private hospitals, consultants, GPs and
medical accounts service agents. Draft terms of reference have been discussed and
are being prepared. Some elements will be implemented straight away such as a
whistleblower phone line. Independently each of the four insurers are making their
own respective investments in personnel and IT system infrastructure to alert and
future proof them from provider fraud into the future.
Psychiatric Benefit:

Insurance Ireland state that private psychiatric treatment in Ireland is currently
underdeveloped and under-funded particularly in the areas of a) the provision of
private psychiatric institutions outside the Dublin area and b) the provision of private
community care at national level. It notes the increasing focus at European and
national level on addressing mental health problems including the significant increase
in alcohol and drug abuse.

In its submission, Insurance Ireland note that mental health services in the private
sector are almost entirely Dublin-based and exclusively inpatient and lengths of stay
are significantly longer in the private sector than the public sector. It notes that
internationally it is accepted that there should be parity between physical and mental
care. There may be an opportunity for insurers and private providers to take the
initiative in support of the development of community mental health services while
also improving in patient services.

The submission outlines in further detail the current system of mental healthcare in
Ireland, governance, government policy (A Vision for Change) and future trends. It
also gives an overview of the infrastructure of the public system, inpatient care, and
the underlying principles and structure of outpatient/community-based care, and the
private providers of mental healthcare in Ireland.

An international comparison by Insurance Ireland of resources available in other
countries shows the proportion of the health budget allocated to mental health for
Ireland as lower than France, the Netherlands, Germany and Australia.

The submission notes that the development of community-based services varies
between the public and private systems, and states that careful consideration must be
31 | P a g e
given when deciding on the insurance approach to community-based care – there are
distinct differences between the public and private systems.

An integrated mental health service would require collaboration between private
insurers and providers to develop community based mental health teams, day
hospitals/day centres, and outpatient clinics.

The submission concludes that treating patients in day care/outpatient settings where
appropriate usually has a lower unit cost than inpatient care due to lower per diem
rates. Outpatient benefit is only paid through outpatient schemes but can be quite
limited with significant co-payments applying. While the provision of community
services in the private sector would broaden the range of treatment options available
and would add to quality of care, it has the potential to increase costs overall given the
investment requirement.

The insurers fully concur with the views from St. Patrick’s Hospital that the demand
for high quality mental health services is increasing due to demographic and other
factors. The submission states that a focus on quality based outcome measures
supported by an adequate and properly resourced integrated care model based on best
practice, is the only way to increase the cost effectiveness of services as demand
continues to rise. The insurers also welcome the position of St. Patrick’s Hospital and
St. John of God Hospital to working towards the mutual goal of excellence in Mental
Health Care for patients within that system and state it will also be necessary to
recognise and make explicit the constraints prescribed by funding challenges for
insurers and providers in the development of such a model.
Response to HSE Submission:

Insurance Ireland welcomes the acknowledgement by the HSE that the private health
insurance market represents a significant component of income received, however
health insurers question the figure for outstanding debt put forward by the HSE. The
submission states that all private health insurers receive notifications from public
hospitals on outstanding debt which include payments that have already been paid or
claims that have been rejected. Insurers consider a rejected claim as on outstanding
debt between the hospital and the patient rather than the hospital and the insurer.
Claims Outstanding:

Insurance Ireland maintain there are a number of contributing factors to the HSE
contention that outstanding claims have increased, citing a deterioration in the level of
information provided by the HSE, failure to submit properly completed claim forms
and a heightened level of claims scrutiny and clinical audit by insurers. Insurers also
32 | P a g e
note that public hospitals take significantly longer to submit claims than private
hospitals.
Terms of Business Agreement:

Private health insurers would welcome the opportunity to negotiate individual
contracts with public hospitals similar to the contractual arrangements it enters into
with private hospitals.
Insurance Company Procedures:

The HSE contention that there is a lack of clarity with regard to health insurance
company procedures is rejected by Insurance Ireland as all insurers publicly publish
their tables of cover and policy handbooks and this information is also held by the
HIA. This submission also rejects that there is no arbitration provision for claims in
dispute, stating the payment or otherwise of a claim is an insurance matter. It notes
that the insurer has no liability for rejected claims and that private hospitals and
consultants pursue monies owed from patients where a claim is rejected.
Insurers not paying for certain Day Case Procedures:

Insurers disagree with the HSE that the accommodation resource is not relevant in
determining whether to charge private patients and state they have never covered
services provided on a trolley, chair or other facility.
Seeking Patient Signature on Discharge:

Health insurers insist this requirement is an imperative since the introduction of new
charging structures in public hospitals as of 1 January 2014. Agreement has been
reached with the HSE on a form to be signed by all patients on admission from 1 June
2014 and it has been agreed that discussions will continue with HSE towards
signature on discharge within 6 months.
New Consultant Appointees:

Health insurers are seeking receipt from the HSE of centralised information on all
consultant changes and appointments, across all categories, in order to avoid delays in
consultant recognition by insurers.
33 | P a g e
Requests for More Information:

Insurers acknowledge they are carrying out more claims scrutiny which requires
further medical information and accept that Patient Accounts Departments should be
advised when this information is sought.
Claim Code Indicator/Incorrect Codes:

Insurers note that hospitals should be notified in addition to consultants when changes
in procedures occur.
Medical Reports for Orthopaedic Claims:

Health insurers are only obliged to pay claims for medically necessary treatments and
require medical reports is order to assess claims properly.
Nominated Contact Person for Private Insurers:

Health insurers will ensure that all hospitals are provided with a contact point for
queries.
Road Traffic Accidents:

Health insurers are legally entitled to recoup costs incurred by virtue of a third party.
Other Issues:

Insurance Ireland reiterates its position regarding the implementation of charges under
the Health (Amendment) Act 2013.
Response to IHAI Submission:

Insurance Ireland agrees with the IHAI on the important role that private hospitals
play within the health system and emphasises the interdependence between health
insurers and private hospitals. They also support the IHAI view that insurers should
be able to negotiate competitively with public hospitals in the same way as with
private hospitals.
Cost Drivers in Private Hospitals:

While insurance Ireland accepts that the costs of private hospital beds has reduced
over the period 2008 to 2012, it notes that the overall cost of private hospital care has
34 | P a g e
increased due to the effects of changes in technology (costs of drugs and implants,
changes in surgical techniques) and increases in utilisation.
Chronic Disease Management:

Insurance Ireland welcome support for measures to deal with chronic disease and its
management.
Claims Processing:

Insurance Ireland accepts that private hospitals have a lower lead time from discharge
to submission in the settlement of claims compared to public hospitals, but do not
believe there has been an increase in the number of days taken to settle private claims
in recent times. The introduction of an electronic claims process would significantly
reduce the time taken to settle claims and a number of private providers are piloting eclaims.
Other Issues for Insurance Ireland:

3.4
The submission refers to the decision in Budget 2014 to curtail tax relief on premiums
and states this has had a significant negative impact on the health insurance market. It
refers to problems with the affordability of private health insurance and that it wishes
to work constructively with the Government to ensure the benefits of a vibrant private
health insurance sector are delivered to the maximum extent possible and in a way
that achieves Universal Health Insurance. It welcomes the recent announcement by
the Minister for Health regarding the introduction of lifetime community rating in
2015 and discounting for members up to age 25 in an effort to halt the exodus from
the health insurance market.
Summary of IHCA Submission
The IHCA represents medical and dental hospital consultants in Ireland and is of the view
that a number of significant issues need to be taken into account in assessing the sustainable
provision of private health care in the future. Its submission sets out IHCA concerns,
submissions and comments on the Phase 1 report’s conclusions and recommendations:
Representation on the Review Group:

IHCA highlights that the Review Group does not include representation from the
IHCA which represents circa 85% of hospital consultants; IHCA believes the Review
Group should have included representatives of all key stakeholders and is concerned
that the “sectional and limited representation” on the Review Group will fail to ensure
a comprehensive and balanced assessment of the issues.
35 | P a g e
Low Number of Hospital Consultants:

IHCA is concerned the Phase 1 report has overlooked the relatively low number of
hospital consultants per capita in Ireland compared with other developed countries,
which it sees as one of the significant challenges impacting on the provision of care to
patients.

IHCA states Ireland has around two thirds the number of hospital consultants
recommended by the Hanly report a decade ago and that demand for care has since
grown substantially due to an ageing population. There are also difficulties in
attracting and retaining the calibre and number of consultants needed due to
significant reductions in income and increases in the cost of practising.
Costs:

IHCA argues that the chapter dealing with costs in the Phase 1 report does not fully
assess a number of underlying costs such as the increases in per diem charges for
private beds in public hospitals and the significant reductions in private procedure
fees paid to consultants.

Cost of Clinical Indemnification: Reductions in procedure fees payable to consultants
contrasts sharply with cost increases incurred by consultants for clinical
indemnification, which depending on the specialty, has increased by 49% and 67%
since 2008, with increases of between 25% and 33% in 2013.

The Medical Protection Society (MPS), the main provider of clinical indemnification
in Ireland has confirmed that the costs of medical claims has increased by 42% in the
past year which will lead to a corresponding average increase to clinical
indemnification charges. IHCA state this represents a serious threat to the
sustainability of care for patients in private hospitals, especially as the public system
does not have the capacity to absorb additional patients.

Insurance payments to consultants: Reported levels of payments are based on gross
revenue and do not reflect practice costs such as clinical indemnification, staff,
rooms, general and other insurance, billing and other variable overhead costs. These
costs have increased substantially in the past six years while procedure fees have been
reduced, leading to a significant decline in private practice income.
Specific Points on Phase 1 Report Include:

The reference to consultant classifications needs to take account of the provisions
included in consultant contracts which provide for consultants to treat private patients.
36 | P a g e

Hospital consultants had designed and implemented new clinical programmes to
deliver improved models of care which have reduced lengths of stay and improved
admission and discharge procedures.

The scale of the impact on health insurance premium increases of the reduction in
income tax relief in the last budget should be quantified and reported.

The recommendation in relation to utilisation reviews should be discussed with the
IHCA to ensure appropriate care is given to patients.

Private health insurers should have discussions with the IHCA on their proposals to
develop an integrated care model for chronic disease management.

IHCA would welcome engagement with public hospitals on the improvement of
debtor management performance; lack of support staff and systems in public hospitals
are having an adverse impact on consultants submitting claims.

Insurers, hospitals and consultants should discuss development of a claims payment
system to reduce payment delays and the administrative burden of dealing with
pended, queried and returned claims.

IHCA should be consulted on proposals to develop discharge procedures.
3.5
Summary of Society of Actuaries in Ireland (SAI) Submission:
The SAI is the professional body representing the actuarial profession in Ireland. Its
submission provides the SAI’s views on aspects of the Phase 1 report most relevant to
actuarial consideration:
Age Structure of the Market:

SAI see the changing age structure of the market as potentially the most significant
and most difficult issue to address. In a voluntary community rated market it will be
difficult to slow the cycle of price increases which will potentially lead to younger
healthier people leaving or not joining the private health insurance market, which in
turn could lead to further price increases.

While ageing in the general population is a challenge for health services, ageing in the
private health insurance market is significantly exacerbated as younger healthier
people choose to exit the market. This contributes to a higher average age within the
private health insurance market, making it likely that those leaving the market, across
37 | P a g e
all age bands, are healthier, which in turn would have a further impact in terms of
increasing average claims.

SAI notes some parallels between the private health insurance market and the
difficulties faced in the pensions sector and suggests that an urgent examination of
projections of the private health market in different scenarios will be important in
devising policies to protect the sustainability of the private health insurance market.
Isolate the Impact of Ageing:

SAI recommend that the Phase 2 report isolates the impact of ageing on claims
inflation as this will allow a better understanding of the extent to which nondemographic factors are impacting on claims inflation, and an enhanced
understanding of the potential impact on inflation of measures designed to improve
the age mix of the market.

SAI supports the Phase 1 recommendation that health insurers provide data to the
HIA in relation to the top 30 procedures since 2008 which should enable the HIA to
analyse the extent to which utilisation and unit costs for these procedures have varied
over time. This will in turn help the review to understand the influence of factors such
as cost per procedure and the relative impact of increased private bed capacity, high
costs drugs and increased charges by public hospitals.
Measures to Encourage Younger People to Join the Market:

3.6
SAI agrees with the introduction of lifetime community rating as a means to
incentivise younger people to enter or stay in the PHI market and with the
recommendation that the Minister consider measures to encourage younger people to
enter the market. In terms of health insurers extending student rates to age 23, SAI
comments that student members attract a full adult risk equalisation levy.
Summary of Submissions from Saint John of God Hospital, St.
Patrick’s Mental Health Services and IHAI on Industry Approach to
Private Psychiatry
The submissions from IHAI, Saint John of God Hospital and St. Patrick’s Mental Health
Services, all made the following points in response to Chapter 7 of the Phase 1 report:

Claims for psychiatric care are a small percentage of the overall claims paid out by
health insurers.
38 | P a g e

All take issue with the comment that private patients are poorly served by a model of
care which lacks a comprehensive and integrated approach by insurers and providers.

That international comparisons should be treated with caution, in particular lengths of
stay comparisons between Ireland, Germany, Australia and South Africa – such
comparisons are seen as not accurate or appropriate as these countries have a more
developed model of community-based mental health services.

All disagree that there is a lack of clinical guidelines and point to adherence to the
Mental Health Commission’s Code of Practice on Admission, Transfer and Discharge
from Approved Centres. Decisions regarding a person’s requirement for inpatient
treatment are regulated by that Code and only occur after assessment by a specialist
medical practitioner. The private health insurance industry should have no part to play
in this process.

All would welcome increased collaboration and negotiation with health insurers to
develop mental health services in line with best international practice.
Other points made include the following:
Absence of Community Based Infrastructure in the Mental Health Sector:

St. Patrick’s disagrees that there is such an absence and highlights the network of
community based Dean Clinics it has established over the last seven years, with some
support from the health insurance sector. It states that St. Patrick’s has moved towards
a ‘Bundled Care’ model of service delivery and that if health insurers fully supported
this model more services would be established in more regions around the country,
resulting in better mental health for the insured and better value for the private health
insurance industry.

St. Patrick’s states that it has engaged in ongoing annual negotiations with health
insurance providers to move towards a more integrated model of care.

St. John of God Hospital makes that point that the HSE and the Department of
Health have a role to play in the provision of community-based services. They also
argue that in some cases private health insurers have been slow to, or have refused to
cover, outpatient and day services for some specialist programmes such as addiction
aftercare and eating disorder recovery.
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Increases in Private Health Insurance Costs:

St. John of God Hospital points out that while health insurance premiums have
increased steadily, the per diem rates it receives have been subject to price decreases
and freezes since 2010. It also points out that private health insurers operate
maximum revenue limits thereby controlling their annual spend with the hospital, and
that consultant psychiatrists are not remunerated separately to the per diem rate.

Demand for high quality mental health services is increasing and it is only by
focusing on quality based outcomes, supported by an adequate and properly resourced
integrated care model based on best practice, that any attempt can be made to increase
the cost effectiveness of services for which there is increasing demand.

IHAI is concerned regarding the comments that private providers have not met the
best international practice of an integrated private mental health service. IHAI
responds that all IHAI member hospitals are regulated by the MHC and no comment
regarding patients being poorly served has been made by the MHC to any member
hospital. Similarly, insurers, which set out the terms annually for reimbursement to
independent providers, have not expressed such concerns.

IHAI also refer to the Vision for Change Strategy for mental health services and that
despite its members fully engaging with the strategy and bringing forward proposals
to enhance implementation of Vision for Change through Public: Private
Collaboration, none of the proposals it made were progressed.
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Chapter 4 Chairman’s Observations and Recommendations
Introduction
In my interim Phase 1 report, issued in December 2013, I identified critical trends that raised
serious concerns about the stability of a sustainable community rated private health insurance
market. These were as follows:

250,000 persons had dropped out of the private health insurance market in the
previous 5 years.

The increases in premiums ranged from 7.3% in 2011 to 12.1% in 2012.

The average cost of claims paid per insured person increased by 12.6 % per annum
between 2008 and 2012.

The age structure of the market saw a significant ageing of the insured population. In
2003 13.3% of the insured population was aged over 60 and this had increased to 19%
of the insured population by the second half of 2012.

The number of beds in private hospitals increased from 2,695 in 2008 to
approximately 3,200 in 2011, an increase of 18.7%.

There was an increase of 33% in public consultants from 2005 to 2012.
4.1 Key Recommendations in the Phase 1 Interim Report
In the Phase 1 interim report, I recommended a series of actions which would:





help understand the dynamics of the market
attract younger members into the market
introduce a level playing pitch between public and private providers
take collective actions as insurers to address key issues, and
introduce best business practices in aspects of claims management.
Following the publication of the report, I received requests for meetings from interested
parties, all of whom I met. The meetings involved the following:






Irish Hospital Consultants Association
Independent Hospitals Association of Ireland
Private Mental Health Providers
Health Insurance Authority
Insurance Ireland
Each Health Insurer
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

Senior HSE Management
St John of God Hospital, Dublin.
I invited submissions from all the parties I met and advised them in the interest of openness
and transparency that I would publish their submissions in this report. These submissions
were considered by the Review Group, but I would point out that the recommendations in this
report are based on my own conclusions following all the meetings and submissions received.
I have also included a table in Appendix 1 outlining the current position on each of the
recommendations in the Phase 1 interim report. The following are my conclusions and
recommendations in relation to the key issues identified in the interim report and addressed in
Phase 2.
4.2 Data to Analyse Trends in the Industry
During Phase 1, the following issues were identified as potential contributors to the growth in
claims:







An increase in the ageing of the population
Higher use of insurance by membership
Increased bed capacity in the private hospitals
Increased use of high cost drugs and implants
Shift of activity from public hospitals to high tech hospitals
Increased claims for depression and mental health conditions
Increased public bed charges for private patients.
During Phase 1, good progress was made in designing a template to analyse in detail the
drivers behind rising costs in the industry. However, this issue became a difficulty again in
Phase 2 and is the main cause of the delay in finalising this review. In particular:

There were difficulties in ensuring that the data requests were being interpreted
similarly by each insurer.

Health insurers required a written confirmation from me that the Health Insurance
Authority (HIA) would only use the data for the purpose of this review.

The completion of the data return took considerably longer than originally envisaged
and agreed with the insurers.

The HIA needed to have a number of bi-lateral discussions with the insurers regarding
the data provided.
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
Due to difficulties in extracting meaningful and comparable data on medical
procedures, it was agreed ultimately to focus on surgical procedures.

Following a review of the first draft of claims cost data from HIA it was clear that
further clarification of data with insurers would be required and this was done.

HIAs final paper ‘Private Health Insurance Claims Cost Analysis’ June 2014 is
included in its entirety in Chapter 2 of this report.
Conclusions
In view of the trends in the industry over the past five years and the fact that €2 billion is
being reimbursed it was surprising to note that:

Data of the type agreed in the template was not being collected by the HIA on an
ongoing basis.

Insurers were not insisting on a common coding system across public and private
providers to ensure they could understand the complexity of medical and surgical
discharges.

The HIA and insurers held different views on whether the HIA was authorised to
compile and analyse certain data.
Phase 2 Recommendations
In view of these conclusions, I recommend a number of steps to improve the availability and
usefulness of data for the purpose of analysing and controlling costs:

The HIA should agree with the Department of Health the data set required to give the
Minister the necessary analysis of industry trends, and/or additional legislative powers
that the HIA may require to collect such information.

The HSE should work closely with the HIA to extract HIPE data on medical cases, so
that the HIA can further analyse the causes of growth in medical admission costs.

Health Insurers should work with private hospitals to ensure that all cases are coded to
the same DRG format as is used by HIPE for activity in public hospitals. This is in
keeping with the Minister for Health’s notification to insurers in April 2014 that
payments of the Hospital Bed Utilisation Credit (HBUC) under Risk Equalisation will
be conditional on the provision of DRG data by patient from 1 January 2016. This
43 | P a g e
approach will lead to a reimbursement system which acknowledges the cost of the
hospital and treating clinician on the basis of complexity of care.
4.3 Private Health Insurance Claims Cost Analysis
Chapter 2, which was prepared by the HIA, updates a previous paper prepared by the HIA in
July 2013 and adds an analysis based on the data submitted by the health insurers. The
following points are worthy of note:

Around €1.9 billion was paid in claims by Irish private health insurers in 2013.

Between 2008 and 2012, the average prescribed benefit per insured person grew by
12.6% per annum (a prescribed benefit’ is a cost incurred during an inpatient stay,
which is subject to maximum limits to ensure that risk equalisation payments do not
provide compensation for ‘luxury’ benefits).3 During this period, the consumer price
index (CPI) fell by an average of 0.3% per annum.

In 2013, the average prescribed benefit fell by 2.2%, the first time this figure
decreased since the HIA started collecting this data. This is a welcome development,
particularly if it indicates a longer term downward trend.

The increase in average claim per member between 2008 and 2012 (61%) largely
results from increased usage of hospital services. Utilisation increased by 14%, while
cost per utilisation was up by 11% in the same period.

The ageing of the insured population currently contributes around 3.1% per annum. to
claims inflation. The breakdown is as follows:
o the ageing of the general population 0.8% per annum.
o an increase in penetration rates amongst older people 0.6% and reduced
penetration rates at younger adult lives 1.6% per annum.
The data analysis by the HIA highlights the impact on activity and costs of the expansion in
facilities that has occurred in recent years most notably:
 Claims relating to private hospitals accounted for €450 million of the increase (or
81% of the total increase) while claims relating to public hospitals accounted for €106
million (or 19% of the total increase).
3
Prescribed Benefits are the total claim payments paid by an insurer in a calendar year excluding claim
payments that relate to:
1. services provided by other than a hospital or a hospital consultant
2. benefits relating to services otherwise excluded from the definition of prescribed health services, such as
outpatient benefits
3. the amount of benefit exceeding the maximum prescribed benefit levels set out in the Health Insurance Act
1994 (Information Returns) Regulations 2009 (S.I. No 294 of 2009).
44 | P a g e

The number of admissions in private hospitals almost doubled (increase of 98%) in
the period. The increase in total costs in private hospitals has been mitigated by a
reduction of 13% in average costs per admission.

Conversely the much lower increase in total cost relating to public hospital claims has
been driven by an increase in the average cost per admission (36% increase). The
number of public hospital admissions for which insurers paid claims reduced by 10%
in the period.

Overall there has been an increase of 40% in the number of insurance related
admissions between 2007 and 2012 and the average costs of claims related to these
admissions had increased by 8%.

The data when broken down by procedure shows a broadly similar set of requests and
the tables show that the main contribution to the increase in costs is from increased
activity in private hospitals. There is sometimes a further (much smaller) contribution
from increased average costs in public hospitals.

Finally, the substantially changed role of the National Treatment Purchase Fund
(NTPF) has almost eliminated demand for private hospital stays from publicly funded
patients and made additional capacity available for use in private hospitals by
insurance funded private patients.
Conclusion
The HIA analysis summarised in Chapter 2 above identifies the additional private facilities
which were commissioned during the period under review. It also points out that “increased
private hospital capacity can lead to increased utilisation of private hospital accommodation
by meeting previously unmet demand (including by providing services that were previously
not available), meeting increasing demand (for example as a result of ageing) or through
supplier led demand (a common feature of healthcare markets)”.
The HIA analysis also draws attention to the Acute Hospital Bed Capacity Review: A
preferred health system in Ireland to 2020 which stated “it is conservatively estimated that
there is a surplus of 130 private patient beds in Ireland. This increases to 900 with those
currently in plan”. It is beyond the scope of expertise of this review to determine the number
of public or private beds required to meet current demand or to assess the appropriateness of
admissions or lengths of stay. However, the suggested surplus in private beds is clearly a key
issue for planning cost effective acute services, and for successful containment of costs in the
private health insurance market.
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Health insurers and public and private providers have the ability to influence these issues and
the implementation of the following recommendations should see the provision of quality
services at the most efficient cost.
Phase 2 Recommendations

Health insurers should not be obliged to provide cover for all public hospitals. While
it is important that they meet the needs of their customers within a reasonable
geographic area, insurers should not be required to cover every public hospital. (This
reflects an emerging trend where insurers are opting not to cover all public facilities in
some of their plans).

Health insurers should not feel obliged to provide cover for existing or new private
facilities and need to negotiate more aggressively for their patients consistent with
quality and cost considerations.

Health insurers should publish information on reimbursements to clinicians by
consultant category, within speciality, by income ranges.
Note
While it is accepted that reimbursements to clinicians are continuing to reduce and that
clinicians have practice costs, additional indemnity cover costs and some increased
competition, there is no benchmark to judge the scale and levels of reimbursements and
whether reimbursements have sufficiently taken on board the changing nature of clinical
practice.
It might be expected that the provision of additional capacity in terms of beds and consultant
manpower should have the effect of keeping costs under control in a normal market.
However, it would appear the opposite has been the case in private healthcare.
4.4 Care Setting and Resources
The recommendations in the Phase 1 interim report in this area centred around the need for
insurers to insist that patients are treated at the lowest possible cost consistent with quality. In
particular insurers were urged to query cases claimed as an inpatient which might have been
carried out on a day basis. I also recommended a case-based charging system using
Diagnosis Related Groups (DRGs) for private patients in public hospitals.
The introduction of such a charging system would have a dual benefit of driving cost
efficiency, because fixed payments encourage hospitals to eliminate unnecessary services,
and of reducing lengths of stay. There would also be additional advantages as restructuring
of care would have an even greater benefit to the State for public patients in public hospitals
given the higher proportionate impact on cost in the public system. The Department of
Health, health insurers and the IHCA have supported this recommendation.
46 | P a g e
Phase 2 Recommendation

A timetable for implementation of case-based charging should be agreed as part of the
process for implementing Money Follows the Patient.
4.5 Age Structure
The interim report outlined the difficulty being experienced in the private health insurance
market because of its age structure. As was outlined “the market requires a sizeable cohort of
younger members, who are generally healthier, to offset the high cost of members who are in
the older age brackets, especially those 70 years or over. Data from insurers indicated that
the average cost of claims in the 70+ age group is ten times that of the 30-39 age group. The
retention of high numbers and attraction of new members in these age brackets is critical to
the sustainability of a community rated system”.
Despite the improving economic situation, the increase in employment and the reduction in
unemployment, there has been no impact of any significance to date in the age structure of
the market in the percentage of the population covered. A study published since the interim
report was issued, Salary scales for new graduates 2004-2012, Thomas Conefrey and
Richard Smith highlighted:
“From their peak in 2007, weighted average nominal salaries across all facilities
decreased steadily to €23,777 in 2012, a fall of 11.7%. The decline in 2012 brought
overall salary levels back to below 2004, highlighting the extent of the adjustment in
graduate pay”.
This observation illustrates the difficulty of affordability and the challenges for the market in
attracting younger and healthier members.
Conclusion
The more younger people we encourage into the market, the easier it is to provide an
affordable community-rated premium for everyone and I acknowledged this in the
recommendations I made in the Phase 1 report.
On 7 July the Minister for Health signed into law a new measure, lifetime community rating,
to encourage people to take out private health insurance at a younger age and thereby help in
controlling premium inflation across the market. Because younger people claim less on
average, their continued participation is vital to keep premiums down for everybody.
I also welcome the announcement by the Minister for Health of his plans to introduce a
sliding scale of rates for young adults up to age 24 in 2015. While my recommendation in
Phase 1 was to introduce discounts up to age 29, this initiative is consistent with my thinking
47 | P a g e
and will go some way to addressing the large price increases faced when student rates no
longer apply usually after age 21.
4.6 Clinical Audit and Utilisation Management
In the interim report, I indicated that I had been provided with details of clinical audit and
utilisation management by the insurers. I was satisfied that each company was investing in
this area but believed overall that this was a recent phenomenon. I had hoped to assess in
Phase 2 if the arrangements were in line with the robustness of international practice.
I suggested to insurers that the issue could be addressed by outlining their system to an
independent evaluator or by completing a template which would assess their system against
best practice.
Insurers, at an individual level, did show me evidence of cost reductions or changed clinical
practice arising from such programmes but they remain adamant that such issues are
commercially sensitive.
My reasons for dwelling on this issue arise from the following:

Milliman, who are actuarial advisors to the Department of Health, pointed out in a
report referenced in the interim report that “In the U.S. and other first world settings,
utilisation management can reduce inpatient hospital admissions by 10% and total
inpatient hospital bed days by as much as 30%”.

Ireland has poor integrated clinical management programmes for chronic conditions
by international standards at present, (although good progress is being made by the
HSE in some areas) which usually leads to inappropriate admissions and lengths of
stay.

The analysis carried out by the HIA shows how increased capacity has affected
increased utilisation and the international literature points out the difficulty in the
private health insurance industry of supplier induced demand.
Conclusion
Clinical audit and utilisation management are proven tools to discover how well clinical care
is being provided and to learn if there are opportunities for improvements. While it was not
possible during the course of this exercise to verify independently the robustness of the
systems in Ireland, I would urge health insurers to examine the scope for further
improvements and for delivering strategies at industry level to address clinical audit and
utilisation management issues.
48 | P a g e
Phase 2 Recommendation

Insurers should vigorously pursue their individual respective approaches to clinical
audit and utilisation management so that the scope for reducing unnecessary treatment
is maximised, and that the available resources for healthcare are put to the best
possible use for patients.
4.7 Industry Approach to Private Psychiatry
In the Phase 1 interim report I pointed out that “private patients are poorly served by the
model of care which lacks a comprehensive and integrated approach by insurers and
providers”.
Private providers took exception to this statement both in my direct meetings with them and
in their submissions attached to this report. I was not blaming providers and pointed out that
“Insurers need to demonstrate that they will reimburse providers who re-structure their
service offering” and “providers need to benchmark their performance against best national
and international practice as regards admission rates and lengths of stay and restructure their
offering to include mental health teams, day hospital, day centres and outpatient clinics”.
My comments were based on the following assessment:

All private mental health inpatient facilities in Ireland are currently based in the
Eastern Region unlike other medical and surgical services.

Current service offerings by providers for private patients did not provide the
comprehensive range of services provided for public patients with mental health
needs.

The length of stay internationally (although this data needs to be treated with caution)
show considerably lower lengths of stay in other countries.

The Health Research Board statistics support the contention that independent/private
and private charitable centres have longer lengths of stay compared to general hospital
psychiatric units in Ireland.
Conclusion
There is considerable scope to change the nature of the care model and this has been
encouraged by providers and insurers. I am also encouraged by the evidence of discussions
already taking place, which will lead to improved access to community and day hospital
programmes, appropriately reimbursed, between providers and insurers.
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4.8 Fraud, Waste and Abuse
In the interim report, I set out a series of recommendations where the industry could work
together to ensure that the issue of fraud, waste and abuse could be highlighted and
cooperative action taken by the industry. Since that report, insurers have briefed me on cases
that have come to light and refunds made. I believe if these issues were highlighted in the
public domain, they would have an impact on the behaviour of public and private providers
and clinicians. I also believe the whistleblowers’ initiative, if marketed effectively, will
achieve results.
Since the Phase 1 interim report was published, health insurers, working with Insurance
Ireland have agreed a range of measures in line with the recommendations, which are due for
publication in the near future. I welcome the action taken in this area and would urge
insurers to continue their encouraging efforts in this regard.
4.9 Chronic Disease Management
The recommendations in the Phase 1 interim report have been well received and since its
publication, both the IHCA and representatives of the pharmaceutical industry have also
expressed a willingness to work on such initiatives. There are considerable benefits to
patients, clinicians, providers and insurers if such initiatives are well planned.
Phase 2 Recommendation

Further to my recommendation in the Phase 1 report, I now recommend as an
immediate priority the establishment of a joint initiative for an integrated model of
care for the treatment of chronic disease. The Department of Health, the HSE and
health insurers, should devise a project plan to determine what chronic diseases to
prioritise and to create supporting pilot programmes on a geographic or disease
specific basis.
4.10 Claims Processing
In the Phase 1 interim report, I outlined the benefits of speedy processing of claims for
patients, private providers and health insurers. Subsequently difficulties emerged when
insurers sought to introduce new forms as part of the reimbursement process without
consultation with public hospitals.
In an effort to move the issue on I chaired a joint working group to address the issue of forms,
bed designations and categories of consultant contracts. Both the HSE and insurers are now
working well on these issues and a series of dates and processes has been put in place to
50 | P a g e
resolve outstanding issues. I am still receiving claim and counter claim between providers
and insurers on such issues as:

The ability of public providers to make the initial claim in a timely manner, and

Whether insurers are deliberately making queries to slow down reimbursement to
providers.
From evidence I have seen, I believe public providers have improved their billing procedures
and are issuing bills in a more timely manner but they still lag behind private hospitals in the
organisation of this function. It is also clear that more claims from both public and private
providers are being challenged by insurers. If such challenges are appropriate then it should
help to control costs and reduce inappropriate reimbursement.
I am not in a position to verify the accuracy of the various claims. However, I believe that
both sides recognise the value of an efficient system of claims processing. I note that
progress is being made in implementing the recommendations in the Phase 1 report in making
the process more efficient.
Phase 2 Recommendations

I recommend that the Internal Auditor of the HSE be requested to investigate the
organisation of the claims management functions in publicly funded hospitals to
determine whether invoices are being prepared promptly and whether query
management, liaison with clinicians and dispute resolution practices are being
managed optimally. This report should be made available to the Consultative Forum
on Health Insurance.

I do not agree with the recommendation from the HSE that the hospital bill be
decoupled from the primary and secondary consultants’ bill. All of the recent work
on claims processing has been aimed at achieving a more integrated, streamlined
system; any element of decoupling would be undesirable in this regard.
4.11 Admission and Discharge Procedures and Processes
In the Phase 1 interim report I identified a range of issues that needed to be addressed
between insurers and particularly public hospitals. Many of these issues were not of
themselves significant but were causing tension in the relationship between the two parties.
I agreed to chair a forum to address these issues and the HSE undertook to represent all the
publicly funded hospitals (including voluntary hospitals), which was a welcome step as it
allowed a single point of contact between the parties. Insurance Ireland co-ordinated the
views of health insurers, which was also of benefit in dealing with such issues. The parties
have worked well together and no longer require external facilitation to progress the issues.
51 | P a g e
Agreement on how and when to progress the issues has been reached and it is now important
that both groups work together on the residual issues.
Phase 2 Recommendation

The forum established between the HSE and Insurance Ireland should continue to be
supported at a senior decision making level to maintain the momentum and build trust
between the parties to progress issues of a collaborative nature.
4.12 Private A&E Admissions
During Phase 2, I met with insurers individually and as a group to discuss the issues
discussed in this chapter. There was and still is, with some insurers, a concern that the
increase in private A&E facilities could lead to further supplier induced demand. There was
also a concern that such facilities are not available on a 24 hour basis and that the hospitals
may not have the expertise on site for the range of presenting conditions.
During the past year, some of these concerns have not been identified as causing actual
difficulties. In addition, health insurers have taken individual decisions to ensure that only
appropriate medical admissions are covered by their reimbursements. It is my view that this
is a matter for each insurer to deal with in their negotiations with private hospitals and no
action is proposed at this stage. Given that the main route of entry to public hospitals for
medical admissions is through emergency departments and this may become similar for
private hospitals who develop capacity to admit through emergency facilities, the issue of
opening hours and clinical competence on site is a matter that should be dealt with as part of
the proposed licensing arrangements which are planned by the Minister for Health.
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Chapter 5 Conclusion
At the commencement of this process twelve months ago, there were legitimate concerns
regarding the sustainability of the Irish community rated private health insurance market due
to a combination of factors. The issues causing concern included the reduction in numbers
holding private health insurance, the age of those holding private health insurance,
unsustainable increases in claim costs, unsustainable increases in premiums and the overall
economic climate.
Over the past year there have been some signs of a more stable economic environment
emerging. The decision of the Minister for Health to introduce lifetime community rating
from 1 May 2015 will hopefully lead to an improved age structure in the insured market by
encouraging people to take out private health insurance at a younger age and thereby
controlling premium inflation across the market. This in turn should help to keep rates of
premium competitive and affordable. As the economy continues to improve we should see
continued increases in employment and reductions in unemployment. Given the steady
increase in health insurance claims between 2008 and 2012, the initial figures for 2013 claims
are positive and if they are maintained as all claims for 2013 are settled, we will have seen
the first reduction in claims paid for a long number of years.
It is clear that insurers have put more resources and effort into clinical audit, utilisation
reviews and challenging of claims, which may already be having an impact. There is a
prospect of efficiencies arising from the decision to move towards product pricing in the
public hospitals, i.e. to move from the current per diem charge to a price based on the actual
cost of treating different types of case. Evidence from private providers would suggest that
this leads to incentives for providers to obtain efficiencies in admission on the day of surgery
and reductions in lengths of stay for many elective procedures.
While the public hospital system has greatly improved its rate of same day admissions and
day surgery, the reforms planned under the Money Follows the Patient initiative will enable
insurers and the public hospitals to adopt a similar approach.
This exercise showed weaknesses and gaps in certain types of data necessary to monitor
healthcare usage closely, understand the impact of the ageing of the population and
presenting of co-morbidities in patients. Patients have legitimate expectations that insurers
will seek to get the best care possible at the right price and rely on their insurer to do this by
negotiating on their behalf with public and private providers and clinicians. While there is a
good deal of data available through HIPE, it needs to be fully utilised for maximum effect.
As recommended, the HIA should collect and analyse medical and surgical data from insurers
as a matter of routine, as part of its ongoing analysis of the private health insurance market.
The scope for increased data sharing and use of HIPE data across the health system should
also be examined. This would allow an assessment to take place of whether the market is
sufficiently competitive to achieve maximum efficiency in negotiations with providers.
The benefit of the review I have engaged in over the last year has been to bring the key
parties together and agree a set of issues that require attention. Some of these have been
53 | P a g e
addressed already but the main benefit of such collaboration should be leveraged by the
Department of Health and the HSE in introducing the clinical pathways of care and the
necessary chronic disease management processes to enable health care to be delivered at the
lowest level of complexity, thereby reducing the need to attend hospitals. The necessary
structures at Consultative Forum level and HSE / Insurance Ireland level should allow the
agenda to be pursued without the presence of an independent Chairperson.
I am confident that the combined effect of the recommendations I have made will, if
implemented, have a positive impact on the private health insurance market to the ultimate
benefit of consumers. In order to achieve this, a continued focus on the issue of costs and its
drivers is required from all stakeholders. Consumers also have a role to play by continuing to
be vigilant in confirming that claims paid on their behalf by insurers are appropriate and also
by challenging insurers on the premiums they charge. Only then are we likely to see a
stabilisation of, or perhaps a reduction in, health insurance premiums.
I received full cooperation from all parties to this report and appreciate the briefings,
submissions and all material provided to me, for which I am grateful. I would like to thank all
those involved in the process - health insurers, the Health Insurance Authority and the
Department of Health - for their contributions and assistance throughout this process.
54 | P a g e
APPENDIX 1 Status of Recommendations made in Phase 1 Report
Status Report
Implemented
Implementation progressing
Implementation to be commenced
Recommendation
Stakeholder Description of
Responsible Progress
Status
1. Controlling Costs
The template agreed at the
Insurers
Forum and issued to insurers by
the HIA in respect of surgical
cases should be completed
within 6 weeks to enable their
independent validation. (This is
to help identify the true driver of
costs in PHI).
In future, the HIA should collect HIA/DoH
and analyse data in a similar
format to the template now
agreed, on a regular basis.
The insurers and the HIA should
agree a mechanism for
comparing medical cases early
in Phase 2 to enable a similar
exercise to be carried out.
Insurers/HIA
The issues identified in the
medical and surgical review
should form the basis of
decisions needed at an
individual insurer level and
industry level where appropriate
for the Phase 2 Report.
Insurers
Data returns from insurers
submitted to HIA; HIA
analysis of data completed
and presented in Phase 2
report.
HIA/DoH considering
preparation of Regulations
to provide for the collection
and analysis of claims data
based on the template
agreed between HIA and
health insurers.
There are difficulties with
agreed definitions for
medical cases - Insurers and
HIA are working to progress
this.
Analysis of data by HIA
reflected in Phase 2 Report
55 | P a g e
2. Care Settings and
Resources
In order to ensure that patients
are treated at the lowest possible
cost consistent with quality,
insurers should use existing
information on the appropriate
treatment locations for
individual procedures. Insurers
should use information of this
kind to query cases claimed as
an inpatient which might have
been carried out on a day basis.
Insurers
To be progressed by insurers
The Minister should pursue
DoH
implementation of a case based
charging system using Diagnosis
Related Groups (DRGs) for
private patients in public
hospitals.
Being pursued as part of
Money Follows The Patient
(MFTP)
The Department and the HSE,
DoH/HSE/
with appropriate input from the
Insurers
private health insurers, should
develop plans as early as
possible in 2014 for the
implementation of a case based
charging system using DRGs for
private patients in public
hospitals.
3. Age Structure
Being pursued as part of
MFTP
The Minister for Health should
consider introducing measures
to encourage younger members
into the market and discourage
by means of a financial penalty,
people who take out health
insurance for the first time after
age 30.
The Minister signed
Lifetime Community Rating
into law on 7 July.
LCR provides for late entry
loadings on the PHI
premiums of those who buy
PHI for the first time at age
35 and older.
DoH
Health insurers should prove
Insurers
their commitment to retaining
and attracting persons in the 1829 age group by discounting
premiums for full time students
up to age 23, which is allowed
at present under health insurance
Insurers currently apply
discounts up to age 21.
56 | P a g e
legislation
4. Clinical Audit and
Utilisation Management
The current clinical audit and
utilisation arrangements should
be assessed in Phase 2 to
determine if they are in line with
the robustness of international
practice.
The extent of clinical audit
being carried out by each insurer
should be independently
evaluated in Phase 2 of this
work.
Insurers in
conjunction
with Chair
Insurers to pursue
individually rather than
collectively due to
commercial sensitivities
Insurers in
conjunction
with Chair
Insurers to pursue
individually rather than
collectively due to
commercial sensitivities
The potential for national
procurement of drugs, a national
drug formulary and adherence to
NCPE outcome assessments
should be assessed in Phase 2.
DoH and HSE
DoH and HSE will pursue.
5. Private Psychiatry
The Minister for Health should
DoH/Mental
use his existing powers under
Health
legislation to authorise the
Commission
Mental Health Commission to
establish and maintain a system
of accreditation of
comprehensive mental health
services in line with the
principles of a Vision for
Change. Such a system should
be developed in partnership with
the various stakeholders and
should be self-funded. Insurers
could then fund accredited
providers on the basis of an
integrated model of care.
DoH are progressing and
will then pursue with MHC
Health insurers and providers
should engage in negotiations to
put in place a service model
with minimum benefits which is
in line with international best
practice.
The scope to change the care
model has been
acknowledged by providers
and insurers.
Insurers
57 | P a g e
While restructuring of the
service offering will take time,
the Chair plans to report on the
progress made by the insurers
and providers at the completion
of Phase 2 of this exercise.
Chair
Chair reports in Phase 2 that
there are discussions taking
place which will lead to
improved access to
community and day
programmes, appropriately
reimbursed, between
providers and insurers.
There is a need for the health
insurers to publicly
acknowledge that
fraud/malpractice exists and to
publish data on the extent of
monies recovered from hospitals
and consultants.
Insurers
Under the auspices of
Insurance Ireland, Health
Insurers will appoint a
representative from their
respective organisations to
Insurance Ireland’s AntiFraud Forum, to address
fraud, abuse and
inefficiencies. Terms of
reference are currently being
prepared.
Private health insurers should
adopt a co-ordinated industry
approach to the identification
and tackling of fraud, waste and
abuse within the healthcare
market.
The industry should engage with
the Data Protection
Commissioner to ensure all its
actions are within their
legislative competence.
The industry should develop a
plan over the next three months
which will be reported on in
Phase 2, which builds on
national experience of other
insurance and financial
providers who have addressed
this issue. This has been
achieved through a co-ordinated
approach in conjunction with
law enforcement. The
international experience of other
countries which have such a coordinated approach should also
be evaluated.
The industry should fund a
whistleblower initiative which
Insurers
As above
Insurers/DPC
As above
Insurers
As above
Insurers
This will be implemented
shortly via Insurance
6. Fraud, Waste and Abuse
58 | P a g e
Ireland’s existing
confidential hotline
dedicated to receiving fraud
tip offs.
has an online anonymous
reporting facility, and hotline
facilities and actively promote
the initiative within the
customers of the industry and
public and private providers.
7. Chronic Disease
Management
As part of the commitment to
DoH, HSE and
develop and update the existing Insurers
Chronic Disease Management
Framework, the Department of
Health and the HSE should
engage closely with private
health insurers to develop an
integrated model of care for
treatment and management of
chronic disease. The updated
Framework should in particular
consider how best insurers could
play a role in incentivising
patients towards prevention and
management of chronic disease.
Insurers who commit to such
DoH/HIA
programmes should be
incentivised through the risk
equalisation scheme which can
recognise the upfront costs of
such programmes.
8. Claims Processing
DoH will pursue this with
Chief Medical Officer and
HSE Head of Clinical
Programmes
Public hospitals should have as
part of the National Service Plan
requirements for 2014 debtor
management performance at
least equivalent to that in
operation in the private
hospitals.
The HSE and all health
insurers have put a process
in place to progress
implementation of this and
other recommendations.
HSE
A report on performance against HSE
this target should be provided by
the end of Phase 2 by the HSE.
There should be a roll-out plan
Insurers and
agreed between health insurers
HSE
DoH to examine this in
context of Risk Equalisation
legislation – in consultation
with HIA and stakeholders.
They will continue to work
together to deal with a range
of claims processing and
admission and discharge
issues.
As above
Intention is to build on
previous work re e-claiming;
59 | P a g e
and public providers to mandate
all public hospitals and
consultants with admitting rights
therein to switch to electronic
claiming no later than the end of
2015.
Health insurers should seek to
agree written 'terms of trade'
with HSE hospitals and
voluntary hospitals regarding
how they interact in relation to
claims and payment
arrangements. There should be
a specific agreement on the
timescale for submission of
completed claims by hospitals
and for final processing by
insurers (i.e. clarification of
queries, payment of claims or
rejection).
All hospitals should submit
agreed final claims to insurers
within the timeframes agreed in
the ‘terms of trade’. Failure to
respect agreed time frames
would mean that the insurer
would pay a specified
proportion (e.g. 90% or 95%) of
the value of the claim.
Conversely, should insurers fail
to settle claims within an agreed
time frame, they could be
required to pay the provider,
public or private, an additional
specified percentage (e.g. 5% or
10%) of the value of the claim.
This situation should be
monitored by the HIA to ensure
it is working effectively and
fairly. The implications of
implementing this
recommendation at an
operational level will be
considered under Phase 2 of this
process.
HSE and Insurers will work
to progress this.
Insurers/HSE
This is being progressed
through the HSE/Health
Insurer process referred to
above.
DoH
DoH to consider.
While the issue arises only in a
HSE
relatively small number of cases,
it should be open to the HSE to
DoH and HSE to consider.
60 | P a g e
suspend the admitting rights of
consultants who repeatedly fail
to complete and sign claim
forms for private insurance
within a reasonable period of
time.
9. Admission and Discharge
Procedures and Processes
The HSE should introduce
standard procedures for public
hospitals, following consultation
with the industry, which ensures
that it is clear that a patient has
exercised their choice as to
whether they wish to be treated
as a public or private patient.
Public hospitals should take
responsibility for ensuring that
consultants are adhering to their
contract type.
Health insurers should have
access to the contract type of
each consultant and where it is
claimed that there is a separate
side agreement in place, this
information should be brought
to the attention of the office of
the Director of Acute Services in
the HSE who can determine the
issue.
Patients on discharge should be
provided with the opportunity to
confirm the details of the
treatment received and the
names of the treating
consultants. This would provide
clarity to the hospitals,
consultants, insurers, and
patients on issues that
subsequently can delay claims.
HSE
The HSE and all health
insurers have put a process
in place to progress
implementation of this and
other recommendations.
They will continue to work
together to deal with a range
of claims processing and
admission and discharge
issues.
HSE and
relevant
hospitals
Being progressed through
HSE/Health insurer process.
HSE/Insurers
Being progressed through
HSE/Health Insurer process.
Insurers
Being progressed through
HSE/Health Insurer process.
61 | P a g e
Appendix 2
FURTHER ANALYSIS OF HIA CLAIMS DATA
62 | P a g e
Summary Sheet - Total Claims 2007 - 2012
Increase in Total Cost
51%
Cost
2007
€556,518,600
Percentage Nominal
2012 Increase
Increase
Public Hospitals
€ 467,031,330
€ 573,398,014
23%
€ 106,366,684
Private (Newer)
Private (Extended)
Private (Other)
€ 71,920,010
€ 211,536,326
€ 338,512,889
€ 266,755,875
€ 322,304,138
€ 483,061,127
271%
52%
43%
€ 194,835,865
€ 110,767,812
€ 144,548,239
Total Private
€621,969,224
€1,072,121,141
72%
€ 450,151,916
€1,089,000,555
€1,645,519,155
51%
€ 556,518,600
Total
Frequency
Public
2007
Percentage Nominal
2012 Increase
Increase
280,907
252,850
-10%
-28,057
29,732
71,269
126,847
134,660
327%
89%
97,115
63,391
Private (Other)
140,023
216,055
54%
76,032
Total Private
241,024
477,562
98%
236,538
Total
521,931
730,412
40%
208,481
Private (newer)
Private (extended)
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
8%
36%
40%
Average Cost per Procedure
2007
Percentage Nominal
2012 Increase
Increase
Public
€1,663
€2,268
36%
€605
Private (newer)
Private (extended)
Private (Other)
€2,419
€2,968
€2,418
€2,103
€2,393
€2,236
-13%
-19%
-8%
-€316
-€575
-€182
Total Private
€2,581
€2,245
-13%
-€336
Total
€2,086
€2,253
8%
€166
Average public cost as a %
of average private (2012)
Average Length of Stay
101%
2007
Percentage Nominal
2012 Increase
Increase
Public
3.9
3.2
-18%
-0.7
Private (newer)
Private (extended)
Private (Other)
1.8
2.2
3.2
1.7
1.9
2.7
-3%
-11%
-18%
-0.1
-0.2
-0.6
Total Private
2.7
2.2
-19%
-0.5
Total
3.4
2.6
-24%
-0.8
63 | P a g e
Summary Sheet - Total Claims for which Breakdown Received 2007 - 2012
Increase in Total Cost
46%
Cost
2007
€194,351,202
Percentage Nominal
2012 Increase
Increase
Public Hospitals
€ 135,241,959
€ 154,003,706
14%
€ 18,761,747
Private (Newer)
Private (Extended)
Private (Other)
€ 40,249,274
€ 101,929,786
€ 140,670,683
€ 134,817,470
€ 138,851,302
€ 184,770,425
235%
36%
31%
€ 94,568,196
€ 36,921,516
€ 44,099,742
Total Private
€282,849,742
€458,439,197
62%
€ 175,589,454
Total
€418,091,701
€612,442,903
46%
€ 194,351,202
Frequency
2007
Percentage Nominal
2012 Increase
Increase
Public
98,348
87,315
-11%
-11,033
Private (newer)
Private (extended)
17,774
42,764
61,166
61,236
244%
43%
43,392
18,472
Private (Other)
78,277
103,633
32%
25,356
Total Private
138,815
226,035
63%
87,220
Total
237,163
313,350
32%
76,187
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
8%
28%
32%
Average Cost per Procedure
2007
Percentage Nominal
2012 Increase
Increase
Public
€1,375
€1,764
28%
€389
Private (newer)
Private (extended)
Private (Other)
€2,265
€2,384
€1,797
€2,204
€2,267
€1,783
-3%
-5%
-1%
-€60
-€116
-€14
Total Private
€2,038
€2,028
0%
-€9
Total
€1,763
€1,955
11%
€192
Average public cost as a % of
average private (2012)
Average Length of Stay
87%
2007
Percentage Nominal
2012 Increase
Increase
Public
2.2
1.9
-15%
-0.3
Private (newer)
Private (extended)
Private (Other)
1.4
1.5
1.5
1.4
1.3
1.3
-1%
-10%
-16%
-0.0
-0.2
-0.2
Total Private
1.5
1.3
-11%
-0.2
Total
1.8
1.5
-18%
-0.3
64 | P a g e
Summary Sheet - 1619 Chemotherapy 2007-2012
Increase in Total Cost
64%
Cost
2007
Public Hospitals
€23,111,083
Percentag Nominal
2012 e Increase Increase
€ 7,231,703 € 11,375,182
57%
€ 4,143,480
Private (Newer)
Private (Extended)
Private (Other)
€ 4,280,836 € 14,367,961
€ 20,204,855 € 25,467,506
€ 4,170,250 € 7,788,077
236%
26%
87%
€ 10,087,125
€ 5,262,651
€ 3,617,827
Total Private
€28,655,941
€47,623,544
66%
€ 18,967,603
Total
€35,887,643
€58,998,726
64%
€ 23,111,083
Frequency
Public
2007
Percentag Nominal
2012 e Increase Increase
19,109
19,731
3%
622
Private (newer)
Private (extended)
2,347
7,882
6,530
9,747
178%
24%
4,183
1,865
Private (Other)
2,324
3,131
35%
807
Total Private
12,553
19,408
55%
6,855
Total
31,662
39,139
24%
7,477
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
13%
15%
24%
Average Cost per Procedure
2007
Percentag Nominal
2012 e Increase Increase
Public
€378
€577
52%
€198
Private (newer)
Private (extended)
Private (Other)
€1,824
€2,563
€1,794
€2,200
€2,613
€2,487
21%
2%
39%
€376
€49
€693
Total Private
€2,283
€2,454
7%
€171
Total
€1,133
€1,507
33%
€374
Average public cost as a % of
average private (2012)
Average Length of Stay
23%
2007
Percentag Nominal
2012 e Increase Increase
Public
1.0
1.0
-1%
-0.0
Private (newer)
Private (extended)
Private (Other)
1.0
1.0
1.0
1.0
1.0
1.0
0%
-5%
-4%
0.0
-0.0
-0.0
Total Private
1.0
1.0
-4%
-0.0
Total
1.0
1.0
-2%
-0.0
65 | P a g e
Summary Sheet - 3910 Knee Replacement 2007 - 2012
Increase in Total Cost
101%
Cost
2007
€19,431,104
Percentag Nominal
2012 e Increase Increase
Public Hospitals
€ 3,654,450
€ 3,390,303
-7%
-€ 264,147
Private (New)
Private (Extended)
Private (Other)
€ 2,999,002
€ 4,662,850
€ 7,948,907
€ 17,718,298
€ 5,711,398
€ 11,876,313
491%
22%
49%
€ 14,719,296
€ 1,048,548
€ 3,927,407
Total Private
€15,610,759
€35,306,010
126%
€ 19,695,251
Total
€19,265,209
€38,696,313
101%
€ 19,431,104
Percentag Nominal
2012 e Increase Increase
Frequency
2007
Public
601
466
-22%
-135
Private (new)
Private (extended)
175
248
1,086
313
521%
26%
911
65
Private (Other)
486
803
65%
317
Total Private
909
2,202
142%
1,293
1,510
2,668
77%
1,158
Total
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
21%
54%
77%
Average Cost per Procedure
2007
Public
Percentag Nominal
2012 e Increase Increase
€6,081
€7,275
20%
€1,195
Private (new)
Private (extended)
Private (Other)
€17,137
€18,802
€16,356
€16,315
€18,247
€14,790
-5%
-3%
-10%
-€822
-€555
-€1,566
Total Private
€17,174
€16,034
-7%
-€1,140
Total
€12,758
€14,504
14%
€1,745
Average public cost as a % of
average private (2012)
45%
Percentag Nominal
2012 e Increase Increase
Average Length of Stay
2007
Public
10.3
6.5
-37%
-3.8
Private (new)
Private (extended)
Private (Other)
7.5
8.9
10.8
6.2
7.7
7.5
-18%
-13%
-31%
-1.3
-1.2
-3.3
Total Private
9.7
6.9
-29%
-2.8
Total
9.9
6.8
-31%
-3.1
66 | P a g e
Summary Sheet - 455 Colonoscopy 2007-2012
Increase in Total Cost
47%
Cost
2007
Public Hospitals
€17,543,313
Percentag Nominal
2012 e Increase Increase
€ 8,757,712 € 13,257,164
51%
€ 4,499,452
Private (Newer)
Private (Extended)
Private (Other)
€ 4,149,372 € 7,951,627
€ 5,053,149 € 6,659,849
€ 19,725,145 € 27,360,051
92%
32%
39%
€ 3,802,255
€ 1,606,700
€ 7,634,906
Total Private
€28,927,666
€41,971,527
45%
€ 13,043,861
Total
€37,685,378
€55,228,691
47%
€ 17,543,313
Frequency
2007
Percentag Nominal
2012 e Increase Increase
Public
9,431
10,782
14%
1,351
Private (newer)
Private (extended)
3,055
3,891
5,741
5,072
88%
30%
2,686
1,181
Private (Other)
14,664
19,632
34%
4,968
Total Private
21,610
30,445
41%
8,835
Total
31,041
41,227
33%
10,186
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
8%
30%
33%
Average Cost per Procedure
2007
Public
€929
€1,230
32%
€301
Private (newer)
Private (extended)
Private (Other)
€1,358
€1,299
€1,345
€1,385
€1,313
€1,394
2%
1%
4%
€27
€14
€49
Total Private
€1,339
€1,379
3%
€40
Total
€1,214
€1,340
10%
€126
Average public cost as a % of
average private (2012)
Average Length of Stay
Percentag Nominal
2012 e Increase Increase
89%
2007
Percentag Nominal
2012 e Increase Increase
Public
1.1
1.1
7%
0.1
Private (newer)
Private (extended)
Private (Other)
1.0
1.0
1.0
1.1
1.0
1.0
3%
1%
0%
0.0
0.0
0.0
Total Private
1.0
1.0
1%
0.0
Total
1.0
1.1
3%
0.0
67 | P a g e
Summary Sheet - 5090 Cardiac Catheterisation & Coronary
Angiography 2007-2012
Increase in Total Cost
159%
Cost
2007
Public Hospitals
€13,170,537
Percentag Nominal
2012 e Increase Increase
€ 939,172
€ 2,437,622
160%
€ 1,498,450
Private (Newer)
Private (Extended)
Private (Other)
€ 1,367,506
€ 3,113,137
€ 2,840,111
€ 6,338,940
€ 7,397,600
€ 5,256,300
364%
138%
85%
€ 4,971,434
€ 4,284,464
€ 2,416,189
Total Private
€7,320,754
€18,992,840
159%
€ 11,672,087
Total
€8,259,925
€21,430,463
159%
€ 13,170,537
Percentag Nominal
2012 e Increase Increase
Frequency
2007
Public
687
1,880
174%
1,193
Private (newer)
Private (extended)
498
1,198
2,624
3,088
427%
158%
2,126
1,890
Private (Other)
1,036
1,978
91%
942
Total Private
2,732
7,690
181%
4,958
Total
3,419
9,570
180%
6,151
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
15%
157%
180%
Average Cost per Procedure
2007
Percentag Nominal
2012 e Increase Increase
Public
€1,367
€1,297
-5%
-€70
Private (newer)
Private (extended)
Private (Other)
€2,746
€2,599
€2,741
€2,416
€2,396
€2,657
-12%
-8%
-3%
-€330
-€203
-€84
Total Private
€2,680
€2,470
-8%
-€210
Total
€2,416
€2,239
-7%
-€177
Average public cost as a % of
average private (2012)
Average Length of Stay
52%
2007
Percentag Nominal
2012 e Increase Increase
Public
2.0
1.3
-33%
-0.7
Private (newer)
Private (extended)
Private (Other)
1.1
1.0
1.2
1.1
1.0
1.4
-2%
1%
9%
-0.0
0.0
0.1
Total Private
1.1
1.1
1%
0.0
Total
1.3
1.2
-9%
-0.1
68 | P a g e
Summary Sheet - 5961 Intracardiac Catheter Ablation 2007 - 2012
Increase in Total Cost
226%
Cost
2007
Public Hospitals
€10,751,045
Percentag Nominal
2012 e Increase Increase
€ 277,659
€ 207,498
-25%
-€ 70,161
Private (Newer)
Private (Extended)
Private (Other)
€ 655,230
€ 3,578,472
€ 245,646
€ 2,316,781
€ 9,331,172
€ 3,652,601
254%
161%
1387%
€ 1,661,550
€ 5,752,700
€ 3,406,956
Total Private
€4,479,348
€15,300,554
242%
€ 10,821,206
Total
€4,757,007
€15,508,052
226%
€ 10,751,045
Frequency
Public
2007
Percentag Nominal
2012 e Increase Increase
76
68
-11%
-8
38
210
124
489
226%
133%
86
279
14
211
1407%
197
Total Private
262
824
215%
562
Total
338
892
164%
554
Private (newer)
Private (extended)
Private (Other)
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
6%
161%
164%
Average Cost per Procedure
2007
Public
Percentag Nominal
2012 e Increase Increase
€3,653
€3,051
-16%
-€602
Private (newer)
Private (extended)
Private (Other)
€17,243
€17,040
€17,546
€18,684
€19,082
€17,311
8%
12%
-1%
€1,441
€2,042
-€235
Total Private
€17,097
€18,569
9%
€1,472
Total
€14,074
€17,386
24%
€3,312
Average public cost as a % of
average private (2012)
Average Length of Stay
Public
16%
2007
Percentag Nominal
2012 e Increase Increase
4.1
2.8
-33%
-1.4
10.3
2.5
1.9
2.8
2.3
1.8
-73%
-9%
-4%
-7.5
-0.2
-0.1
Total Private
3.6
2.2
-38%
-1.4
Total
3.7
2.3
-39%
-1.4
Private (newer)
Private (extended)
Private (Other)
69 | P a g e
Summary Sheet - 3660 & 3666 Hip Replacement 2007-2012
Increase in Total Cost
31%
Cost
2007
Public Hospitals
Percentag Nominal
2012 e Increase Increase
€ 5,933,508
-22%
-€ 1,695,224
Private (Newer)
Private (Extended)
Private (Other)
€ 4,652,096 € 15,554,440
€ 5,938,188 € 6,433,867
€ 13,357,087 € 13,466,815
234%
8%
1%
€ 10,902,343
€ 495,679
€ 109,728
Total Private
€23,947,371
€35,455,121
48%
€ 11,507,750
Total
€31,576,102
€41,388,629
31%
€ 9,812,526
Frequency
Public
€ 7,628,731
€9,812,526
2007
Percentag Nominal
2012 e Increase Increase
1,210
825
-32%
-385
Private (newer)
Private (extended)
345
417
1,236
483
258%
16%
891
66
Private (Other)
981
1,086
11%
105
Total Private
1,743
2,805
61%
1,062
Total
2,953
3,630
23%
677
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
19%
9%
23%
Average Cost per Procedure
2007
Public
Percentag Nominal
2012 e Increase Increase
€6,305
€7,192
14%
€887
Private (newer)
Private (extended)
Private (Other)
€13,484
€14,240
€13,616
€12,584
€13,321
€12,400
-7%
-6%
-9%
-€900
-€920
-€1,215
Total Private
€13,739
€12,640
-8%
-€1,099
Total
€10,693
€11,402
7%
€709
Average public cost as a % of
average private (2012)
57%
Percentag Nominal
2012 e Increase Increase
Average Length of Stay
2007
Public
10.1
6.8
-32%
-3.2
Private (newer)
Private (extended)
Private (Other)
7.6
9.0
10.1
6.2
7.8
7.4
-18%
-13%
-27%
-1.4
-1.2
-2.7
Total Private
9.3
6.9
-26%
-2.4
Total
9.6
6.9
-28%
-2.7
70 | P a g e
Summary Sheet - 2802 Cataracts 2007-2012
Increase in Total Cost
31%
Cost
2007
Public Hospitals
Percentag Nominal
2012 e Increase Increase
€ 2,483,669
-36%
-€ 1,403,166
Private (Newer)
Private (Extended)
Private (Other)
€ 2,492,221 € 6,268,700
€ 2,995,684 € 4,743,848
€ 11,278,679 € 13,625,929
152%
58%
21%
€ 3,776,478
€ 1,748,164
€ 2,347,250
Total Private
€16,766,584
€24,638,476
47%
€ 7,871,892
Total
€20,653,420
€27,122,146
31%
€ 6,468,726
Frequency
€ 3,886,835
€6,468,726
2007
Percentag Nominal
2012 e Increase Increase
Public
2,142
1,384
-35%
-758
Private (newer)
Private (extended)
945
1,057
2,775
2,131
194%
102%
1,830
1,074
Private (Other)
3,578
5,890
65%
2,312
Total Private
5,580
10,796
93%
5,216
Total
7,722
12,180
58%
4,458
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
25%
33%
58%
Average Cost per Procedure
2007
Percentag Nominal
2012 e Increase Increase
Public
€1,815
€1,795
-1%
-€20
Private (newer)
Private (extended)
Private (Other)
€2,637
€2,834
€3,152
€2,259
€2,226
€2,313
-14%
-21%
-27%
-€378
-€608
-€839
Total Private
€3,005
€2,282
-24%
-€723
Total
€2,675
€2,227
-17%
-€448
Average public cost as a % of
average private (2012)
Average Length of Stay
79%
2007
Percentag Nominal
2012 e Increase Increase
Public
1.3
1.0
-25%
-0.3
Private (newer)
Private (extended)
Private (Other)
1.0
1.4
1.3
1.0
1.0
1.0
-3%
-27%
-23%
-0.0
-0.4
-0.3
Total Private
1.3
1.0
-21%
-0.3
Total
1.3
1.0
-22%
-0.3
71 | P a g e
Summary Sheet - 3821 & 3822 Knee Cartilage 2007-2012
Increase in Total Cost
65%
Cost
2007
€5,671,328
Percentag Nominal
2012 e Increase Increase
Public Hospitals
€ 1,416,491
€ 1,248,284
-12%
-€ 168,208
Private (Newer)
Private (Extended)
Private (Other)
€ 2,389,454
€ 813,948
€ 4,084,607
€ 7,444,674
€ 314,904
€ 5,367,967
212%
-61%
31%
€ 5,055,219
-€ 499,044
€ 1,283,360
Total Private
€7,288,009
€13,127,544
80%
€ 5,839,535
Total
€8,704,501
€14,375,828
65%
€ 5,671,328
Frequency
2007
Percentag Nominal
2012 e Increase Increase
Public
1,013
767
-24%
-246
Private (newer)
Private (extended)
1,210
444
3,720
166
207%
-63%
2,510
-278
Private (Other)
1,928
2,515
30%
587
Total Private
3,582
6,401
79%
2,819
Total
4,595
7,168
56%
2,573
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
1%
62%
56%
Average Cost per Procedure
2007
Percentag Nominal
2012 e Increase Increase
Public
€1,398
€1,627
16%
€229
Private (newer)
Private (extended)
Private (Other)
€1,975
€1,833
€2,119
€2,001
€1,897
€2,134
1%
3%
1%
€27
€64
€16
Total Private
€2,035
€2,051
1%
€16
Total
€1,894
€2,006
6%
€111
Average public cost as a % of
average private (2012)
Average Length of Stay
79%
2007
Percentag Nominal
2012 e Increase Increase
Public
1.0
1.0
0%
0.0
Private (newer)
Private (extended)
Private (Other)
1.0
1.0
1.0
1.0
1.0
1.0
0%
0%
0%
0.0
0.0
-0.0
Total Private
1.0
1.0
0%
-0.0
Total
1.0
1.0
0%
-0.0
72 | P a g e
Summary Sheet - 194 Upper GI Endoscopy 2007-2012
Increase in Total Cost
39%
Cost
2007
€5,619,602
Percentag Nominal
2012 e Increase Increase
Public Hospitals
€ 5,301,700
€ 7,386,245
39%
€ 2,084,545
Private (Newer)
Private (Extended)
Private (Other)
€ 962,285
€ 1,507,959
€ 6,791,706
€ 2,368,147
€ 2,079,536
€ 8,349,322
146%
38%
23%
€ 1,405,863
€ 571,577
€ 1,557,616
Total Private
€9,261,949
€12,797,006
38%
€ 3,535,057
€14,563,649
€20,183,251
39%
€ 5,619,602
Total
Frequency
2007
Percentag Nominal
2012 e Increase Increase
Public
7,966
7,368
-8%
-598
Private (newer)
Private (extended)
1,084
1,801
2,670
2,481
146%
38%
1,586
680
Private (Other)
7,275
8,892
22%
1,617
Total Private
10,160
14,043
38%
3,883
Total
18,126
21,411
18%
3,285
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
6%
18%
18%
Average Cost per Procedure
2007
Public
€666
€1,002
51%
€337
Private (newer)
Private (extended)
Private (Other)
€888
€837
€934
€887
€838
€939
0%
0%
1%
-€1
€1
€5
Total Private
€912
€911
0%
-€0
Total
€803
€943
17%
€139
Average public cost as a
% of average private
(2012)
Average Length of Stay
Percentag Nominal
2012 e Increase Increase
110%
2007
Percentag Nominal
2012 e Increase Increase
Public
1.1
1.1
4%
0.0
Private (newer)
Private (extended)
Private (Other)
1.1
1.0
1.1
1.1
1.0
1.0
2%
2%
-2%
0.0
0.0
-0.0
Total Private
1.1
1.1
0%
-0.0
Total
1.1
1.1
1%
0.0
73 | P a g e
Summary Sheet - 2190 Caesarean Delivery 2007 - 2012
Increase in Total Cost
17%
Cost
2007
Public Hospitals
€4,857,690
Percentag Nominal
2012 e Increase Increase
€ 24,807,016
€ 30,092,242
21%
€ 5,285,227
Private (Newer)
Private (Extended)
Private (Other)
€ 898
€ 431
€ 3,762,458
€0
€0
€ 3,336,249
-100%
-100%
-11%
-€ 898
-€ 431
-€ 426,208
Total Private
€3,763,786
€3,336,249
-11%
-€ 427,537
€28,570,802
€33,428,491
17%
€ 4,857,690
Total
Frequency
Public
Percentag Nominal
2012 e Increase Increase
2007
6,504
5,158
-21%
-1,346
Private (newer)
2
-
-100%
-2
Private (extended)
1
-
-100%
-1
Private (Other)
715
543
-24%
-172
Total Private
718
543
-24%
-175
7,222
5,701
-21%
-1,521
Total
Market size related Inc in Freq
Age Related Inc in Freq
Other Inc in Freq
Total Inc in Freq
-5%
-4%
-13%
-21%
Average Cost per Procedure
2007
Public
€3,814
Private (newer)
Private (extended)
Private (Other)
€449
€431
€5,262
Total Private
Total
Percentag Nominal
2012 e Increase Increase
€5,834
-
-
€2,020
-
€6,144
17%
€882
€5,242
€6,144
17%
€902
€3,956
€5,864
48%
€1,908
Average public cost as a % of
average private (2012)
Average Length of Stay
53%
95%
Percentag Nominal
2012 e Increase Increase
2007
Public
5.6
Private (newer)
Private (extended)
Private (Other)
4.5
4.0
5.7
Total Private
Total
5.3
-
-5%
-
-0.3
-
5.4
-5%
-0.3
5.7
5.4
-5%
-0.3
5.6
5.3
-5%
-0.3
74 | P a g e
75 | P a g e