Competition in the Irish Private Health Insurance Market

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1.5 In the case of Ireland we have mainly relied on our knowledge of the Irish system gained in our work with HIA over the last few years and figures from various HIA staff reports on whether the HIA should recommend the commencement of risk equalisation payments. We have also had regard to the following document Private Health Insurance in Ireland, A Case Study Francesca Colombo and Nicole Tapay OECD Health Working Papers No 10 12 Feb 2004 1.6 This report is prepared for HIA by the Government Actuary’s Department (GAD) for the reason indicated in paragraph 1.1 above. The report has been prepared for use by persons technically competent in the areas covered. Except with the written consent of GAD, the report and any written or oral information or advice provided by GAD must not be reproduced, distributed or communicated in whole or in part to any other person, or be relied upon by any other person. GAD has granted permission for the HIA to disclose the report to third parties including publishing it on the HIA website, and also for particular third parties to disclose the report, subject to the agreement of the HIA. This permission has been granted on the specific understanding that: 1.7 This report has been prepared to meet the specific purposes of the HIA and not for use by any third party. The work performed in producing the report was not carried out in the knowledge or context of any specific requirements which any third party may have. This report is not intended by GAD to form the basis of any decision by any third party to do or omit to do anything. Any third party is not entitled to place any reliance on our report or GAD’s skill and advice generally, but should carry out its own investigations and obtain independent professional advice on all matters covered (or which ought to have been covered) by this report. 1.8 This report is disclosed without responsibility on our part and no representation, warranty, promise or undertaking, express or implied, is or will be made or given in relation to the truth, accuracy or completeness of the report. No responsibility, liability, or duty of care whatsoever (other than for fraudulent misrepresentation) is or will be accepted by GAD in relation thereto. 1.9 The report must be considered in its entirety as individual sections, if considered in isolation, may be misleading. If reliance is placed contrary to the guidelines set out above, GAD disclaims any and all liability which may arise. Particular attention is drawn to the parts of the report stressing the approximate nature of the calculations applying the Australian equalisation approach to the Irish data. Brief Overview of the Irish and Australian health care systems 1.10 The table below sets out a high level a comparison of the Australian and Irish health care systems, concentrating primarily on the private health insurance market. It can be seen that at a high level there are many similarities. In particular both countries have universal tax funded health systems and PHI cover is largely taken out voluntarily in order to secure health provision that the consumer regards in some way as preferable to or a supplement to the public system. 141
Australia Ireland Public hospital Universal publicly funded Universal publicly funded Private cover available Private cover available Private hospital Private cover voluntary and available to all Private cover voluntary and available to all Population 21m 4m Population covered by PHI 43% 51% Tax incentives for PHI Yes Yes Product approval required for PHI Yes Minimum benefits required Premium approval for PHI Yes No, except for Vhi PHI Waiting period and pre existing condition exemptions allowed Yes Yes PHI Community rated Yes Yes PHI Open enrolment Yes Yes PHI Lifetime cover Yes Yes PHI Late entry premiums Yes No 142
Page 1 and 2:
A Report to the Minister for Health
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CONTENTS TABLE OF FIGURES _________
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CONSUMER ATTITUDES TO SWITCHING ___
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EXECUTIVE SUMMARY AND RECOMMENDATIO
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As a result it does not have to sat
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Recommendation 7 The Minister for H
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indicates that consumers of PHI hav
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Recommendation 13 The Minister for
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is quite unclear, so far as the Aut
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1.4 For the next number of months t
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other insurers were to enter the ma
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2.6 Private health insurance (PHI)
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2.17 Open enrolment and lifetime co
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• 2001: The Health Insurance Auth
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Figure 2: Annual Change in PHI memb
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of medical inflation and the higher
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VIVAS Health is rising steadily. In
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• Table 1 below shows the annual
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Figure 6: PHI Products BUPA Ireland
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• Work-based group schemes where
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from year to year and also during t
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3. DEFINING THE PRIVATE HEALTH INSU
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Figure 7: Key features of Related H
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price increase unprofitable by a hy
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4.6 Aspects of the exemption from i
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and quarterly management accounts t
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Table 4: Regulation of PHI Firms 48
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4.31 This is a positive step. Just
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obliges Vhi Healthcare to seek appr
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4.41 In the regulatory approval pro
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4.50 However, the Authority is clea
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Unfunded Lifetime Community Rating
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President of the Society of Actuari
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− The main other deterrent at pre
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o The former members of the Advisor
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materially affected by any seasonal
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It may also be noted that the propo
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4.94 There are 37 health insurers i
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Interviews with Possible New Entran
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have shown that new sales and switc
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not binding on incumbents and no in
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5.33 In this context Vhi Healthcare
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5.44 As the former incumbent monopo
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5.52 Vhi Healthcare’s first mover
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• Psychological costs 6.5 Transac
Page 91 and 92: 18-24 9% 13% 25-34 34% 19% 35-44 31
Page 93 and 94: 6.24 The provision of renewal notic
Page 95 and 96: The HIA publishes on its website a
Page 97 and 98: Recommendation 10 Following consult
Page 99 and 100: Recommendation 11 The insurance com
Page 101 and 102: Regulations were established to aff
Page 103 and 104: transferred and the amounts require
Page 105 and 106: Buyer Power and Concentrated Market
Page 107 and 108: The Supply of Private Medical Facil
Page 109 and 110: VIVAS Health claims that Vhi Health
Page 111 and 112: approval on coverage of facilities
Page 113 and 114: Supplier-Induced Demand 7.36 The Vh
Page 115 and 116: Questions Relevant evidence Irish P
Page 117 and 118: to restrict individual choice of pr
Page 119 and 120: 8. CONCENTRATION AND MARKET POWER I
Page 121 and 122: gives us some indication of the com
Page 123 and 124: wishes to retain the flexibility to
Page 125 and 126: largest price increase that is prof
Page 127 and 128: scheme. Employees may be under the
Page 129 and 130: elevant regulatory requirements, ex
Page 131 and 132: Table 7 Vhi Healthcare Financial Re
Page 133 and 134: • There is limited buyer power fr
Page 135 and 136: Breaking up Vhi Healthcare would di
Page 137 and 138: expertise and other staff resources
Page 139 and 140: APPENDIX 1 Other forms of health re
Page 141: APPENDIX 2 Report of UK Government
Page 145 and 146: Australia Ireland Risk equalisation
Page 147 and 148: 1.22 The Irish data is not split at
Page 149 and 150: Conclusion of normal claim payments
Page 151 and 152: APPENDIX 3 Consumer Attitudes to Sw
Page 153 and 154: Survey Respondent factors promoting
Page 155 and 156: APPENDIX 5 OECD Review of PHI The O
Page 157 and 158: not-for-profit insurers has posed c
Page 159 and 160: 114. Private insurers have not impl
Page 161 and 162: APPENDIX 6 List of Submissions The
Page 163 and 164: Understanding and Comparing Private
Page 165 and 166: Benefits Outpatient Cover Cover for
Page 167 and 168: Dobson, P., M. Waterson and A. Chu,
Page 169: Vhi Healthcare (2005), Annual Repor
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Competition in the Irish Private Health Insurance Market

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