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Department publishes review of VHI claims costs

Milliman’s report into VHI’s cost control, and how it can streamline its operations, is published in redacted form.

Image: Niall Carson/PA Archive

THE DEPARTMENT of Health has published a redacted form of a review into the VHI’s costs of claims, and how the insurer can present a more viable business structure.

The report, compiled by the Department’s actuarial advisors Milliman, had been commissioned to examine the reasons behind the ongoing increases in VHI’s costs.

It found that the insurer should introduce a “utilisation management” system in order to ensure that clients were given “the right treatment at the right time in the right facility” – a management technique it said was already used in various international health systems, including that of the Netherlands.

It found elsewhere that VHI “currently lacks the infrastructure” to calculate whether it was paying out for treatments with a proven medical value, or whether treatments offer the best quality of care.

The report further recommends that the VHI be more attentive to the length of time, and the cost, that procedures take in each hospital, so as to identify how procedures can be made more efficient.

Former health minister Mary Harney had told the Dáil last month that the introduction of the report’s findings could save the insurer between 5 and 10 per cent a year.

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VHI welcomed the publication, explaining that the recommendations would see it move from a model where it funds a customer’s needs, to one where it “actually determines what level of care and the type of treatment which our customers would receive.”

The transition to that American-style model would require significant investment, VHI said, though the report had not been able to identify exactly how much investment would be required.

The redacted report can be viewed on the Department of Health website.

About the author:

Gavan Reilly

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