THE GOVERNMENT is to eliminate the subsidy provided for private medical treatment carried out in public hospitals.
The move, which involves further increasing the cost of private beds in public hospitals, will generate about €18 million in additional revenue. However, it will also undoubtedly lead to additional rises in the cost of private health insurance.
According to sources, the Government is looking at the potentially far larger amounts which could be obtained if it imposed charges on insurance firms for subscribers treated in public hospital beds which are not specifically designated for fee-paying patients.
Such a move could generate about €370 million for the public health system. However, it would have huge implications for the finances of insurance firms and for premium prices. At present it is estimated only about half of all private patients treated in public hospitals are charged.
Details of the move to close the current subsidy and to raise charges to reflect the full cost of treatment were set out by Minister for Health James Reilly in a written parliamentary answer to Caoimhghín Ó Caoláin of Sinn Féin on Thursday.
The Minister did not specify the level of increase in the bed charges to be put in place in 2012 to close the subsidy and generate an extra €18 million.
While insurers claim every 10 per cent increase in the cost of private beds pushes up the price of health insurance premiums by more than 3 per cent, the Department of Health uses an estimate of a 2 per cent increase in premiums for every 10 per cent rise in private costs.
The Department of Health currently charges a daily rate for a private bed in a regional or voluntary teaching hospital of just over €1,000, and €889 for semi-private accommodation.
In his answer, Dr Reilly said current regulations stipulated public hospitals could only impose charges on private patients (and their insurance companies) in cases where they were treated in the 20 per cent of beds officially designated for private or semi-private patients.
Asked whether the department was examining charging the full economic cost of using beds in public hospitals, including those not specifically designated for private patients, a spokesman for the Minister said “in the current economic climate and given the potential scale for reduced funding in the area of health, no specific measure can be ruled out at this stage”.
