Competition in the Irish Private Health Insurance Market

2.6 Private health insurance (PHI) provides for the reimbursement by
health insurers of all or part of the fees arising from a hospital inpatient
stay and ancillary healthcare services that are medically
necessary. Generally, fees include all hospital charges and consultants’
fees.
2.7 Private health insurance products offer semi-private 2 and private
accommodation in three different categories of hospitals:
• Public hospitals (i.e. hospitals that are operated by the State);
• Privately owned and operated hospitals (other than the Blackrock
Clinic and Mater Private Hospital); and
• The Blackrock Clinic and Mater Private Hospital (which charge
higher fees than other private hospitals).
The Role of Private Health Insurance in Ireland
2.8 The entire population can avail of public care in public hospitals for a
daily charge of €60 up to an annual maximum charge of €600. Slightly
less than thirty percent of the population qualify for a medical card and
are exempt from the €60 charge. 3 Ireland’s public hospitals have a
substantial proportion of private (pay) beds, where patients also pay
for consultant treatment/care. There are also twenty-eight private
hospitals. (More new hospitals are due to open in the near future.)
They vary considerably in size and in the range of medical and surgical
treatment offered.
2.9 For public patients, there are substantial waiting periods for many
elective hospital admissions for adults and children, although the
waiting periods vary considerably between medical and surgical
conditions and between adults and children.
2.10 Prospective patients for elective treatments who are willing to pay for
private care (or more likely have private health insurance) can gain
access to private beds in most of the public hospitals relatively quickly
(as well as having access to private hospitals) and be treated privately
by the appropriate consultant attending the public hospital. Private
secondary medical care is provided mainly by hospital consultants who
are paid either directly by the patient or on their behalf by insurers.
Private patients usually, but not always, occupy separate sections in
public hospitals.
Statutory Background to Private Health Insurance in Ireland
2.11 Prior to 1 July, 1994, the provision of private health insurance in
Ireland was subject to the terms of the Voluntary Health Insurance
Act, 1957. This Act established the Voluntary Health Insurance Board
(VHI Healthcare) and required other bodies engaged in the business of
health insurance to be licensed by the Minister for Health. Under this
system, VHI Healthcare developed as a virtual monopoly because
2 A room which contains not more than 5 beds.
3 Universal entitlement to public health care in Ireland is mainly a feature of secondary care. Public
health care provision is much more restricted in primary and tertiary care and only those who satisfy
the medical card means test are entitled to free primary GP care.
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