Driving Innovation in the Private Health Insurance Market - An Overview

Transcription

1 12 th February 2014 Driving Innovation in the Private Health Insurance Market - An Overview CIPD Southern Region Breakfast Briefing John O Dwyer, Chief Executive

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3 Agenda 1. Ireland s Healthcare System 2. Private Health Insurance Market 3. Key Market Challenges 4. Future Vision for Health Universal Health Insurance (UHI) 5. Preparing for UHI some recommendations 3

4 Ireland s Health System Primary Care 40%+ of the population free access to GP remainder fee for service system Primary Care Private Healthcare Public Hospital Care Public Hospital Care 35% of the population free at point of usage nominal charge for all other users paid on a budget basis with limited private income based on daily charge private insurers are price takers prices set by regulation Private Healthcare health insurance is a voluntary purchase (combination of individuals and companies) private hospitals and consultants operate on fee-for-service basis 4

5 Private Health Insurance Market Market Rules Community Rating: Everyone is charged the same rate for the same product regardless of their age, sex or health status Key characteristics: Open Enrolment Lifetime Cover Minimum Benefits Why do people choose private health insurance? Choice (hospital and consultant) Accommodation (comfort and choice) Speed of access Fear of financial cost associated with illness 5

6 Key Market Challenges Today 45% of population has health insurance vs. 51% in 2008 Dec million insured vs. Sept million insured. 1. Affordability - Need to keep younger people in the market - Need to offer a wide range of plans that meet varying healthcare needs and financial limitations of all people in the market - Need to stabilise the market first and get it to function in a normal way through a effective risk equalisation scheme. 2. Cost Containment - Need to manage and reduce costs so that health insurance remains affordable - Comprehensive cost containment programme in place - 3% average price increase in Lowest in market for the last 2 years. - Government needs to implement recommendations of Pat McLoughlin Report 3. Cherry Picking and Market Segmentation key factors 6

7 Universal Health Insurance no perfect solution Key Objectives Equal Access to Care for all Delivery of high quality and efficient healthcare services Delivered through Compulsory standard package of care Free GP services Competing health insurers Competing health providers A Single-Tier Health Service supported by Universal Health Insurance What Success will look like Equal access to care for all More efficient delivery of healthcare Financially sustainable healthcare system Better healthcare outcomes especially for the sickest and most vulnerable 7

8 Ireland can do Healthcare Reform NTPF Money Follows the Patient a Mini UHI Introduced in 2002 Waiting times 2-5 years for simple procedures like colonoscopies, hips, cataracts, knees NTPF brought order to what was a chaotic system In 2007 waiting times reduced to 2-5 months Satisfaction rates persistently high i.e. 99% 8

9 The Dutch Experience What can we learn? Prior 2006 Dutch healthcare systems had similar problems to our own including Long waiting lists, Lack of efficiency and innovation from providers Lack of certainty around costs for consumers A very fragmented insurance market. Universal Health Insurance Introduced in 2006 According to the European Health Consumer Index published in 2012 Dutch system should set the standard for reform it s the best in the world It is ranked best in the EU We can Learn from this 9

10 The German Experience shift from Risk Management to Better Managing Healthcare outcome Through Cost Management, Costs of Chronic Patients can be Lowered example Germany Process for cost management (example) Early detection Predictive Modelling Provide screen Offer special blood tests Counsel on lifestyle changes for those with risk factors Acute Chronic Claims Defined appropriate hospitals & contract appropriate consultants Ensure appropriate treatment through provider management Implement disease management programs by: - Provide coaching - Offer nutrition advice - Encourage compliance / adherence - Tele-medicine programs Check claims for completeness, accuracy and appropriateness: - Automatically validate - Manual audit esp. medical - Closed file review - Medical audit Fraud detection Cost and RES -allocation per member EUR Profit Loss Risk Equalisation allocation / benchmark Cost per member Prevention Managed care Claims management Vhi Competitor 10

11 Preparing for UHI Some Recommendations Healthcare Reform Programme is about the implementation of UHI. It is challenging but is an opportunity to improve the health of the nation. Pilot UHI for children up to 17 years. 540k Standard product with 90%+ effective Risk Equalisation. Everything 44% else risk rated. Introduce Lifetime Community Rating/Modified Community Rating to support the market. Rules of competition must focus on the customer, not risk selection. 11

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