ECONOMY

Medical insurance contracts depend on tough negotiations

A new round of tough negotiations begins next month between insurance companies and hospitals in anticipation of signing a new agreement. Insurance firms’ representatives suggest that negotiations with the major private hospitals in the country will not only determine the pricing policy of the insurance sector in health – that is, the increases that the insured will have to pay – but also test whether the current status of collective negotiations will continue, with hospitals or separate contracts being signed by each insurer with every private clinic. If the latter happens, every insurer will negotiate the rates of services offered to its clients depending on the company’s portfolio, which will expand non-contracted hospitals. Such a development would weigh heavily on people insured, who would have to pay for their tests and then claim the amount they will have given according to their insurers’ invoices. The country’s major private hospitals such as Hygeia, Erricos Dynan, Metropolitan and Athens Medical Center (which had not consented to the previous collective contract) will be invited to discuss with the Association of Insurance Companies – Greece, in another effort to rationalize hospital expenses. The new round begins under the weight of the negative experience of the previous three-year agreement, signed in 2003 and expiring this summer, which in the end failed to reduce the costs of health programs. Although insurers and hospitals reached an agreement on considerable discounts, mainly as far as doctor’s fees are concerned, the representatives of the insurance sector argue that the deal was put aside in practice, so that the cost of healthcare has not subsided after all. Insurers suggest that the health sector’s loss index, representing the ratio of total expenses to revenues, is reaching 120 percent, which makes the sector another loss-making activity. Quite a few of them are now questioning the sector’s very survival, associating it with that of car insurance. Even though insurance companies point out that insurance programs in Greece are cheap based on the costs they generate, the consequences of this situation are bound to end up with clients, either in the form of premium increases or in the companies’ rejection of compensation claims, raising questions about the need for certain tests or medical acts, or even revoking cover exceptions provided by contracts. The average cost of a hospital program for a 40-year-old man or woman comes to about 300-400 euros per year for contracts with a waiver of 1,500 euros, while the cost of contacts without waivers reaches 500-600 euros per year. Despite the low tariffs, relations between companies and insured clients are often tense, with clashes increasing, while criticism grows over annual rises in contracts. In this context, the underlying conflict between insurance firms and private hospitals is culminating, with accusations being made from both side in an effort to milk the other side financially, in an increasingly unhealthy relationship. Common cases of discontent include needless and costly tests, and excess charging for a series of supplementary services. The beginning of this cold war can be traced back 15 years, with the creation of health cards. Now insurers argue that special material is priced excessively, without any official rates to confirm real costs. The medical sector for its part pleads scientific progress and talks about tactics that hold patients and doctors hostage. However, the insurance industry in this country – which according to official data is «unhealthy» in terms of its low growth rates and profits – argues in favor of imposing strict rules to contribute in cost control and avert phenomena of health abuse. Insurers suggest that the redemption of health insurance and the restoration of relations between insurers, hospitals and clients also require the establishment of medical protocols in Greece, which would clearly determine the procedures and the handling of each health incident. There are international rules guarding against abusive practices, not only for the sake of the insurance sector but also of the public health system, since in the countries where they operate they determine similar procedures. Such an attempt requires not only the initiative of the insurance sector and time, but also the political will from the competent ministries. Without these conditions, the conflict will continue in advance of the forthcoming negotiations.