Competition in the Irish Private Health Insurance Market

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Figure 5: Market Share by Age Groups Market shares by age groups 100% 96% 98% 90% 88% 80% 70% 72% 75% 69% 76% 81% 60% 50% 40% 30% 20% 10% 0% 30% 26% 23% 23% 18% 11% 4% 2% 2% 2% 2% 1% 0% 2% 0% 0% 17 & under 18 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 - 79 80 & over Age Groups VHI BUPA VIVAS Note: This graph compares April 2006 figures for BUPA Ireland, Vhi Healthcare and VIVAS Health. The data are from RE returns and are the latest available. Therefore, the base data is slightly different from the data used for the total market share graph above. Private Health Insurance Products 2.52 There is a wide variety of PHI policies available, offering various degrees of insurance cover at different prices. 25 PHI policies are differentiated by, amongst other things; • The freedom of choice with regard to hospital usage (whether the policy-holder’s choice of hospital is unrestricted, or alternatively limited to specific hospitals); • The standard of hospital accommodation offered (whether the policyholder is entitled to a private or semi-private room); and • Whether or not there are cost excesses (some policies offer reduced rates if the subscriber accepts an excess on the amount payable by the PHI provider). 25 Appendix 7 contains a comparison table of the various plans which the HIA publishes on its website. 35
Figure 6: PHI Products BUPA Ireland Essential Vhi Healthcare Plan A Vivas Health Me Plan (Level 1) BUPA Ireland Essential Plus Vhi Healthcare Plan B Vivas Health I Plan (Level 2) BUPA Ireland Healthmanager Gold Vhi Healthcare Plan E Vivas Health I Plan (Level 5) Basic Cover More Cover and Better Hospital Accommodation Low Price High Price 2.53 PHI policies range from very low levels of cover to extensive cover which is reflected in the price, as illustrated in Figure 6. There is a wide range of different PHI plans currently on the market which can be broadly grouped into three levels of cover: • Each of the insurers offers what can be described as a ‘basic’ plan. The most basic, and lowest priced PHI policies (e.g. BUPA Ireland Essential, VIVAS Health Me Level 1, Vhi Healthcare Plan A), which offer cover for semi-private accommodation in public hospitals only with re-imbursement of all consultants’ fees and other normal hospital charges while an in-patient or a day patient. • The next level of policy and by far the most popular is the range that includes BUPA Ireland Essential Plus, VIVAS Health Me Plan Level 2 and Vhi Healthcare Plan B. These plans provide full cover for treatment in a private room in a public hospital and in a semiprivate room in all private hospitals, except the Blackrock Clinic and the Mater Private Hospital, as well as all other normal hospital charges and consultants’ fees. The most popular PHI plans are shown in the table below. A large majority of all PHI consumers are covered by one of these plans. 36
Page 1 and 2: A Report to the Minister for Health
Page 3 and 4: CONTENTS TABLE OF FIGURES _________
Page 5 and 6: CONSUMER ATTITUDES TO SWITCHING ___
Page 7 and 8: EXECUTIVE SUMMARY AND RECOMMENDATIO
Page 9 and 10: As a result it does not have to sat
Page 11 and 12: Recommendation 7 The Minister for H
Page 13 and 14: indicates that consumers of PHI hav
Page 15 and 16: Recommendation 13 The Minister for
Page 17 and 18: is quite unclear, so far as the Aut
Page 19 and 20: 1.4 For the next number of months t
Page 21 and 22: other insurers were to enter the ma
Page 23 and 24: 2.6 Private health insurance (PHI)
Page 25 and 26: 2.17 Open enrolment and lifetime co
Page 27 and 28: • 2001: The Health Insurance Auth
Page 29 and 30: Figure 2: Annual Change in PHI memb
Page 31 and 32: of medical inflation and the higher
Page 33 and 34: VIVAS Health is rising steadily. In
Page 35: • Table 1 below shows the annual
Page 39 and 40: • Work-based group schemes where
Page 41 and 42: from year to year and also during t
Page 43 and 44: 3. DEFINING THE PRIVATE HEALTH INSU
Page 45 and 46: Figure 7: Key features of Related H
Page 47 and 48: price increase unprofitable by a hy
Page 49 and 50: 4.6 Aspects of the exemption from i
Page 51 and 52: and quarterly management accounts t
Page 53 and 54: Table 4: Regulation of PHI Firms 48
Page 55 and 56: 4.31 This is a positive step. Just
Page 57 and 58: obliges Vhi Healthcare to seek appr
Page 59 and 60: 4.41 In the regulatory approval pro
Page 61 and 62: 4.50 However, the Authority is clea
Page 63 and 64: Unfunded Lifetime Community Rating
Page 65 and 66: President of the Society of Actuari
Page 67 and 68: − The main other deterrent at pre
Page 69 and 70: o The former members of the Advisor
Page 71 and 72: materially affected by any seasonal
Page 73 and 74: It may also be noted that the propo
Page 75 and 76: 4.94 There are 37 health insurers i
Page 77 and 78: Interviews with Possible New Entran
Page 79 and 80: have shown that new sales and switc
Page 81 and 82: not binding on incumbents and no in
Page 83 and 84: 5.33 In this context Vhi Healthcare
Page 85 and 86: 5.44 As the former incumbent monopo
Page 87 and 88:
5.52 Vhi Healthcare’s first mover
Page 89 and 90:
• 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 and 142:
APPENDIX 2 Report of UK Government
Page 143 and 144:
Australia Ireland Public hospital U
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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