Saturday 27 December 2014

Why health cover isn't delivering

Health Minister James Reilly with newborn Alex Kavanagh when he opened new patient facilities at Mount Carmel in 2012. Brian McEvoy
Poor prognosis: Model Pippa O’Connor opening a new unit at Mount Carmel hospital. Brian McEvoy
Hospital shock: Meav Doyle with her three boys — Paul (12), Michael (15) and five-year-old Christopher. Photo: Ronan Lang.
First-rate: Tara O’Connor who had her first child in Mount Carmel
Mount Carmel staff & INMO reps (L to R) Marian Hendrick, Eileen Finn, Philip McAnenly, Eleanor Byrne Patricia Kelly Maloney at Mount Carmel Hospital in Dublin where the directors of the hospital have applied to the High Court for the appointment of a liquidator. Photo: Gareth Chaney Collins
Poor prognosis: Model Pippa O’Connor opening a new unit at Mount Carmel hospital. Brian McEvoy
First-rate: Tara O’Connor who had her first child in Mount Carmel
Staff and union representatives after it was announced that Mount Carmel is to close. Gareth Chaney, Collins
Happy to go public: John Ryan who cancelled his VHI cover after a cruciate ligament injury. Ronan Lang
Derek Davis. Photo: Mark Condren

The shock closure of Mount Carmel, which delivered its last baby yesterday, is only the latest of a long list of crises to hit the private health sector. And with more premium hikes announced this week, is it any wonder 250,000 people have quit?

Tara O'Connor is due to give birth on Thursday. But it will be the Coombe, rather than Mount Carmel, where she welcomes her second child.

She missed the cut-off point by less than a week. Yesterday marked the final day for births at the private hospital in south Dublin, which had first opened its doors in 1949.

Mount Carmel is the most significant indicator of how beleaguered Ireland's private health service has become. Having thrived in the Celtic Tiger years, the hospital's 300 staff have been made redundant and face an uncertain future in an environment that has seen a cap on recruitment.

With the hospital in NAMA control and in debt to the tune of €35m, it was always going to be an uphill task to stay afloat.

Mount Carmel's woes serve to put extra strain on the capital's already over-stretched maternity hospitals. And the Beacon Medical Group's ambitious 2010 plan to build a 127-bed private maternity hospital in Sandyford, south Dublin, has been shelved.

Other exclusive hospitals are feeling the strain, too – including the Mater Private, which has been tied up in labour relations disputes over 95 redundancies and the closure of a pension scheme.

While health insurance was a basic necessity for many in the boom years, the so-called squeezed middle have had to make tough choices – especially as premiums have doubled since 2008. It is thought that 6,000 people per month are abandoning expensive policies, with more than 250,000 former private customers now in the public health system.

And this week, with the country's largest insurer, VHI, announcing that it was putting up the prices of some of its plans by 6pc, and Laya Healthcare introducing a 20pc hike, it is certain that yet more will not renew their policies.

Catherine Whelan, CEO of the Independent Hospitals Association of Ireland (IHAI), says the sector is facing "its most challenging period to date. And it's not just people quitting health insurance, but the figure that we're never told about is the tens of thousands who are downgrading their policies".

She added: "There is a perception out there that difficulties experienced by private hospitals has no impact on the public system, but that's not the case at all. It puts it under even more pressure and that's borne out in the facts that 45,000 are waiting for elective procedures and more than 378,000 are waiting on a first appointment with a consultant."

Insurance expert Dermot Goode says "the elephant in the room" is the decision by Health Minister James Reilly to charge patients with private health insurance for public beds.

"Rather than the existing €75 fee per night, insurance companies are having to pay €813 for those public beds. That will cost the industry €140m in 2014 alone – so it is a certainty that further hikes are on the way for beleaguered customers. And then there's the fact that from March 1 health insurance levies, introduced by the minister, go up by 15pc. What that all means in brass tacks is more than €700 extra per couple who are on one of the more comprehensive plans," he adds.

Mr Goode says it is "unsurprising" that the closure of private hospitals such as Mount Carmel is making those most likely to abandon health insurance – the 25 to 34 age group – rethink what they are getting for their hard-earned cash.

Genevieve MacKenzie, who had two children at Mount Carmel in 2006 and 2010, says its closure may encourage yet more people to abandon the private health option. "Some people will be asking themselves if it is worth the expense," she says, "when the element of choice is taken away.

"I'm one of those who feels that it is very important to have health insurance and if that means not upgrading the car or putting off family holidays, so be it. It's a priority for me and my family and I was lucky that I was able to have my children in Mount Carmel because the experience there was second to none."

Ms MacKenzie says the €4,000 bill for each birth – on top of the health insurance premium – was comparable to the fees she would have expected to pay in the private wings of Holles Street or the Rotunda.

Irish Independent

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