THE Consumer Association of Ireland has accused the VHI of reneging on its commitment to provide people with "peace of mind" during illness. It advised members to consider carefully whether the insurance company was giving value for money.
Yesterday's newspaper advertisement by the VHI - which warned its 1.2 millions subscribers that they must settle their accounts directly. with 18 private hospitals from April 4th - was an unfair burden on patients already worried about their health, said CAI chief executive Ms Caroline Gill.
"In their literature they say join up here and you get peace of mind and now they are saying that if you are sick and you go to a private hospital you have to pay the bill yourself. . . People will really have to examine what they are getting for their money and should look at the public health services before deciding whether to join the VHI," said Ms Gill.
The consumer, she said, would lose out on the new arrangement which followed failure by the VHI and the Independent Hospitals' Association of Ireland (IHAI) to agree a price rise for 1996.
But there was no breach of contract by the VHI, added Ms Gill, as policies stated that it could alter hospital benefits during the hospital year with four weeks' notice. This was deemed given if published in the national morning daily newspapers.
Meanwhile, Mr Michael Heavey, chief executive officer of IHAI, rejected VHI claims that its demand for a 3.5 per cent increase would lead to a 10 per cent rise in VHI costs. He said the IHAI was seeking to have the 3.5 per cent pay rise extended to all hospitals and this would cut the VHI less than 0.5 per cent of its total payments of £230 million.
The 3.5 per cent had originally been offered to all hospitals but was rejected by the 18 private hospitals listed by VHI because it did not meet their costs, said Mr Heavey.
"I see this whole thing as a way by the VHI to intimidate people and is saying to hospitals `if you do not deal with us, we will not deal with you'. If that is not a misuse of their monopoly position, I do not know what is," said Mr Heavey.
The VHI denied this or that it threatened any hospital. The medical director, Dr Bernadette Carr, said they had failed to deal with the IHAI and would now approach hospitals individually. She said the VHI was seeking to influence costs in hospitals in the interests of its subscribers. It was important that hospitals became more cost effective and no longer relied on the VHI to fund constantly escalating costs.
Dr Carr said the 18 hospitals accounted for 33 per cent of hospital claims and subscribers would be reimbursed by the VHI.
Patients unwilling to pay hospitals themselves could use health board, voluntary or smaller hospitals. They could also attend the Mater Private Hospital in Dublin which has agreed an individual deal with the VHI. Hospital sources said the Mater accepted the 3.5 per cent increase because it had not exceeded the 1995 patient budget allotted by the VHI.