MINISTER FOR Health Mary Harney said last night the VHI was paying out too much to hospitals and could make savings of at least 10 per cent if it managed its dealings with them more aggressively.
Speaking in the Dáil, Ms Harney said she planned to introduce measures which would see people who take out private health insurance at a young age pay less than those who took out their first policy when they were older. This, she said, could incentivise people to buy private health insurance earlier.
Making her first substantive comments on the VHI price increases of up to 45 per cent, announced two weeks ago, Ms Harney said she was “extremely disappointed” and accepted it would make it hard for many people to continue to buy private health insurance. She pointed to “many alternative plans” which “offer the same or very similar benefits for a lower price”. Ms Harney also addressed the Milliman report, commissioned last summer to examine the VHI’s claim costs but withheld because it contained “commercially-sensitive” information.
Last night, Ms Harney agreed to publish some elements of the report. She said it had found the VHI had given limited focus to what it was paying hospitals for, and had failed to invest in ways of managing claims to better yield savings. She said it could make “savings of a minimum of 5 per cent to 10 per cent in this area”.
Ms Harney said the report showed “that VHI can and must address its claims costs aggressively, rather than relying on other elements such as risk-equalisation – or indeed huge price increases – to help sort out its difficulties”.
