Management and staff of the VHI are preparing to strongly resist any attempt to break up the State-owned health insurance company, write Martin Walland Mark Hennessy
VHI chief executive Vincent Sheridan told staff in an internal message yesterday that the company would demand that anyone arguing for such a break up provide reasoned arguments based on advantage to consumers "rather than sound bites relating to the benefits of competition" and "the evils of monopoly etc".
"I firmly believe that reasoned arguments are all on our side," he said.
The Amicus trade union, which represents 800 VHI staff, said it would use all its resources, including industrial action if necessary, to oppose a break-up of the company.It claims any move by the Government to split the VHI without consultation would be a breach of the partnership agreement Towards 2016.
Amicus is to meet the Irish Congress of Trade Unions to discuss the issue next week.
The Irish Timesrevealed yesterday that the Government would consider proposals to break up the VHI into a number of entities as a means of generating competition, following the announcement by Bupa Ireland that it is to withdraw from the market. A report by the Competition Authority, to be given to the Minister for Health Mary Harney next month will recommend that the VHI should be broken up.
Bupa was strongly criticised yesterday by Taoiseach Bertie Ahern, who said the company's refusal to compensate the VHI for its older client base would have led to older people not being able to get health insurance.
Speaking in Brussels where he was attending the EU summit, Mr Ahern said Bupa was aware of the rules before it established operations here. "What we were being asked by Bupa - and let's not put a tooth in this - was that people who are all well and healthy can pay cheap insurance while the old people then get screwed. I am not going to do that while they get greater profits," he said. "I'll look after the people who need looking after. If insurance is all about going out and getting a 100 people who are unlikely to get sick for the next 10 years so they make greater profits, that's great, that's marvellous.
"And I am meant to be impressed by that argument? And then you get 100 people who are like myself and half-crocked and we have to pay far more for it. That's fair? Market forces? Competition? Who are they codding," said the Taoiseach.
Bupa announced on Thursday it would wind up its Irish operation, blaming the introduction by the Government of risk equalisation for its decision. It claimed risk equalisation - which has resulted in Bupa having to pay millions to the VHI to compensate it for its older client base - was costing €1 million every week, making its business unviable.
EU Internal Market Commissioner Charlie McCreevy said yesterday that the VHI now had in effect a monopoly in the Irish health insurance market, and he warned that the EU wanted to ensure that there was effective competition.However, Minister for Health Mary Harney said yesterday that the Government "could not even contemplate" a situation where there would be only one single monopoly supplier in the health insurance market.