Private hospitals refuse to renew contract with HIO

Private hospitals asserted on Thursday that they cannot – and will not – renew their contract with the Health Insurance Organisation (HIO) on what they say is a take-it-or-leave-it basis, warning that this could leave the national health system in limbo.

In a statement, the association of private hospitals (Pasin) asked the state to step in and ensure that negotiations with the HIO – the agency running the national health system or Gesy – resume.

Without the talks between them and the HIO having been completed, Pasin stressed, they could not sign off on the new contract.

Pasin said they received a letter from the HIO concerning a “unilateral cancellation” of the current contract with the hospitals regarding their provision of healthcare services, as part of Gesy.

Moreover, the HIO said the current contract will expire on August 31, and called on the private hospitals participating in Gesy to sign a new contract by or on September 1.

But given that Pasin considers that discussions about their remuneration package have yet to wrap up, the association said it cannot possibly sign on the dotted line.

“Essentially the HIO demands that the hospitals sign a blank cheque, something which we cannot accept.”

The association, however, did not outright threaten to pull out of Gesy. It said it remained committed to Gesy “in a way that ensures the viability of the system and of the healthcare providers, in an environment of healthy competition, where patients can choose their provider and where respect exists among the contracting parties.”

Pasin called on the state to step in and “put a stop to the distortions relating to the equal treatment of private and public hospitals in terms of the new method of compensation, and to make the HIO revoke the letter by which it terminated the current contract.”

The Employers and Industrialists Federation – of which Pasin is a member – likewise sounded the alarm over the fate of the national health system itself should the private hospitals decide to walk out.

It said the HIO wants private hospitals to immediately sign a new contract “before an agreement has been reached with Pasin and the other hospitals, and before agreeing the financial terms, the remuneration and other important parameters which impact the hospitals’ viability.”

The federation called on the HIO to “return to the negotiating table in order to find a commonly acceptable arrangement for the good of the patients and the healthcare system.”

Some 70 private hospitals are currently contracted with the HIO and participating in the national health system. Most – but not all – are members of Pasin.

Director-general of the Employers and Industrialists Federation, Michalis Antoniou, told the Cyprus Mail that on August 1 the HIO sent hospitals a letter notifying them about the termination of the current contract.

In the same letter, the HIO gave hospitals from August 7 to August 31 to sign on to a new contract, which would take effect on September 1.

And all this is happening while the hospitals do not even know what compensation/rates they will receive under the new contract.

Asked whether the HIO has put anything in writing about the financial aspect in the new contract, Antoniou said no.

“Until yesterday [August 2] there was nothing on that.”

He declined to speculate on why the HIO was acting in this way.

Asked whether a crisis could be looming on the very survival of Gesy, Antoniou offered:

“I’m hoping they’ll find a sweet spot, so that at least most of the hospitals will stay inside Gesy.”

The HIO may have decided to dispel with the niceties and issue what essentially amounts to an ultimatum, because a proposal they had floated earlier on hospitals’ remuneration had taken flak from both the private and the public hospitals.

Both sides were unhappy with the proposal, each seeing it as favouring the other.

One contentious point regarded the HIO’s proposal to bump up by 10 per cent the rates paid to hospitals for “specialised services.”

Pasin said that in practice this reference to “specialised services” would benefit the public hospitals which, in the meantime, continue receiving financial support from the state – as the date for them to become fully self-funding has been pushed back.

For their part, the state health services organisation (Okypy) argued that public hospitals offer a variety of services which are often loss-making – so they should be compensated fairly.

As examples of specialised services offered by public hospitals but not by private facilities, Okypy cited the Aids clinic, the transplant clinic, the tissue compatibility lab, and the neonatal intensive care unit.