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Private Patient Charges

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Tuesday 01 July 2014

Health and Social Services Department response to Guernsey Press Enquiry

Guernsey Press enquiry:

Can the department please answer the following questions:

- Is the department deliberately overcharging private healthcare patients thousands of pounds in order to reduce its overspend?

- How would Mark Dorey and Malcolm Nutley respond to allegations they had voiced this to a member of the public who complained about the excessive charges they were receiving from the department?

- Is the department aware its private healthcare costs are nearly three times what they are in many private wards in the UK?

- Does it have a reason why this is so? How does the department decide what to charge private patients?

- How would the department respond to allegations that despite the higher cost, the quality of care received is lower, because those performing operations are not leaders within their fields?

- Has the department negotiated with insurance companies to charge inflated invoices? If so, which insurance companies are they?

- Is the department aware health premiums in the island may have increased up to 40% because of this move, how would it respond?

- Does the department provide patients with an estimated cost of operations and other medical costs before they come into hospital? If so, when did this practice start, if not, why not?

- Have charges increased since the department began overspending?

- The department only recently put the charges for private patients on its website, what prompted this move?

Health & Social Services Department response:

Is the department deliberately overcharging private healthcare patients thousands of pounds in order to reduce it's overspend?

At the beginning of 2011 the HSSD board at that time agreed to a significant increase in hospital charges for private patients. This followed a comparison of HSSD's charges with UK private providers. HSSD then held negotiations with the 4 largest health insurers, which resulted in those insurers accepting the increases in tariffs. The tariffs have been increased approximately in line with inflation since 2011.

Hospital treatment is funded from General Revenue through taxes and for the Medical Specialist Group and visiting consultants from social security payments. Patients, who choose to go private, will have very good treatment in the hospital and stay on Victoria Wing if they require a bed.

Private patient services are established and operated as a commercial part of the HSSD. The charges form an important source of income for HSSD which reduces our need for financing from taxes.

The charges for private patients are package prices for the HSSD services. They cover the treatment, care and all the costs incurred by the Department including overheads and the risk if a patient does not recover as quickly as expected and has to stay in hospital for longer as well, as including an element of profit.

The Medical Specialist Group charges private patients separately for the services of the medical consultants. Private patients may also receive separate bills from States Employed Consultants, for example for radiology services.

How would Mark Dorey and Malcolm Nutley respond to allegations they had voiced this to a member of the public who complained about the excessive charges they were receiving from the department?

The response to such allegations would be that they are untrue and, if made, would reflect a misunderstanding or misrepresentation of what had been said. The Department is reluctant to comment further on individual cases or specific meetings with members of the public.

Is the department aware its private healthcare costs are nearly three times what they are in many private wards in the UK?

The Department is aware that some charges for private patients are high in comparison to some UK providers. A review of the private tariffs is planned for later this year. The Department has committed, in its 2014 Operational Plan, to identify opportunities for improving private services, as well as maximising income generation. To do this, we will ensure that all charges are fair and appropriate for that part of HSSD's business operation.

Does it have a reason why this is so? How does the department decide what to charge private patients?

In 2011, HSSD completely changed its charging structure for private patient services. The Department introduced a "package pricing" system for all surgical in-patient and day-patient treatments. Package pricing systems are generally preferable, as they provide predictability and certainty to patients, insurers and providers in terms of cost. But they also transfer risk to the provider (in this case, HSSD), which would have to pick up the additional costs of a hospital stay over-running, or a procedure requiring more support than planned. This risk is reflected, to some extent, in the package prices.

In preparation for moving to a package pricing system, HSSD benchmarked its surgical procedure prices against comparable private hospitals in the UK, in summer 2010. At the time, it found that Guernsey rates were much lower, justifying a substantial increase in private fees going into 2011. In the event, private patient fees were increased by approximately 30%. This increase was discussed and negotiated with insurers beforehand, in order to make sure that it would remain acceptable to them.

Since 2011, HSSD has increased private patient charges in line with inflation. This ensures that the value of the private tariff is not eroded.

The current HSSD Board has recognised that a review of the full tariff is due, and is carrying this out in 2014.

How would the department respond to allegations that despite the higher cost, the quality of care received is lower, because those performing operations are not leaders within their fields?

The Medical Specialist Group comments:

"The quality of care to all patients in the Bailiwick, whether private or under the States contract, is very high due to the 'consultant only' service provided. Also, the waiting times available under the States contract are very short compared to the UK. The benefits of going private in Guernsey have nothing to do with the standard or quality of care, but rather with the services surrounding that care which include access to Victoria Wing for inpatients with the very high standards of catering and more flexible visiting times. For outpatient clinics, there is greater flexibility and choice of appointments with many being available in the evenings and at weekends to accommodate people who have work commitments. There may also be a choice of consultant in certain circumstances. Certain procedures or drugs are not available under the contract but are available to private patients. There is some preventative care covered by private medical insurers, such as annual checkups and exercise physiology, which the States contract does not cover.

The Medical Specialist Group has an excellent track record of attracting very high calibre consultants to the island across all specialities and they are required to meet the same standards of clinical governance, revalidation and performance measurements as their UK counterparts. The care provided by the MSG in conjunction with HSSD is subject to regular audits and reviews and the results consistently indicate that we achieve very high standards of performance, particularly when taking into account the local context."

Has the department negotiated with insurance companies to charge inflated invoices? If so, which insurance companies are they?

The private patient charges that were set by the Department in 2011 based on relevant research and were discussed with representatives from the 4 largest health insurers at that time. The agreed tariffs were within the scope of the benchmarked charges. As part of the upcoming review, further consultation on any revisions to the tariffs is likely to be referred once again to the insurance market as appropriate.

Is the department aware health premiums in the island may have increased up to 40% because of this move, how would it respond?

HSSD has received no information or indications that any increase in health premiums in Guernsey is directly attributable to the current private patient charges.

Does the department provide patients with an estimated cost of operations and other medical costs before they come into hospital? If so, when did this practice start, if not, why not?

Private patients are usually provided with a letter prior to admission informing them of the estimated cost of their planned procedure. As a consumer of the services provided by the Health and Social Services Department, private patients need to be comfortable they understand the costs and implications of the procedure to determine if they can afford the procedure and before choosing whether or not to opt for private care in Guernsey.

In emergency cases or when procedures are added to a theatre list late for clinical reasons, such written notification may not be received by the patient prior to admission. Wherever possible efforts are made to ensure that the patient is informed in these cases.

Have charges increased since the department began overspending?

See answers above.

The department only recently put the charges for private patients on its website, what prompted this move?

The Department aims to provide relevant and up to date information by appropriate means including online. The move to publish private patient charges on gov.gg was undertaken earlier in 2014 in order to make this information freely and widely accessible and available.

-ENDS-

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