Jan O'Sullivan (Limerick East, Labour)

This is a complicated issue, as we are dealing with VHI in transition after 50 years in existence. We should congratulate the body on that length of service. An EU directive exempted the company from rules governing coverage in the market, with many other similar types of health insurance system in Europe, but we are now moving to a point where the European non-life insurance directive must be implemented. In effect, VHI is moving from a relatively protected and limited status to competition in the broader market.

Much of what is in front of us raises many questions, rather than providing answers. As with previous speakers from Fine Gael, I have a number of questions on the legislation. We have had competition since 1994 but in some ways it is very limited. It is in the context of protecting consumers through community rating and the vagaries of risk equalisation. The Labour Party strongly supports the concept of community rating but the devil is in the detail of how risk equalisation is implemented.

VHI has a very large corner of the market, which is probably inevitable because it has been in existence for so long and has a very large cohort of loyal customers. By and large, it has given very good service to its customers. The broader question to be asked by the Labour Party is whether we should stay within the system in place, an unequal and somewhat contradictory one.

Some 50% of the population is covered by Voluntary Health Insurance while at the same time having a right of access to public hospital beds. The other percentage of the population, in effect, has less equitable access, as the services for which we pay through Voluntary Health Insurance are not available to them.

The system is complicated and, in the context of the move to greater privatisation of the system with co-located hospitals and so on, it has become even more complicated. Adding further to this complication is the transitional phase at which we are looking up to the end of 2008, when VHI must have €140 million in place to comply with the same solvency rules as its competitors. In the meantime, the insurer's competitors have relatively small percentages of the market. I understand VHI has approximately 75% of the market; Quinn Healthcare, 20% and VIVAS, 5%. One wonders why many other larger companies which provide insurance in other countries with a health insurance system are not entering the Irish insurance market. We must live with our competitive market and therefore must work out a system which would have more players in the market. However, I do not support reducing protection for sectors of society that, by their nature, place more demands on the health services, such as the elderly and people with disabilities. It is vital we protect the interests of those sectors and do not encourage insurers to discourage them from becoming customers. We must, therefore, ensure the balance is maintained and that level of protection remains. These figures are worked out mathematically in accordance with statistics, percentages and volumes of use. I am not expert enough to say whether the risk equalisation balances should be changed. I do not know and in many of these matters we must rely on levels of expertise of those who deal with these issues all the time.

I am not sure of the position on the issue going through the courts, to which the Minister referred. Could the Minister clarify it? I am confused about what the Minister said about section 3(d), that the Government considers it appropriate that VHI have the maximum flexibility on how it achieves the level of solvency required to satisfy the Financial Regulator. He said if the State was assisting, "the Government and the European Commission would have to be satisfied in advance that any such investment by the State did not constitute state aid". I assume VHI will have to come up with this €140 million by the end of 2008. I am unsure what the parameters are on achieving that. VHI members would like to know if that will increase premiums. I do not know if there are clear answers to the questions I pose.

The Minister says the Government should seek specialist advice on how the VHI could be authorised by the end of 2008 and that the consultants are due to produce a report for the Departments of Finance and Health and Children by the end of this month. They will then determine the provisions that will be required to comply with the authorisation by the end of 2008. The legislation is going through before those reports. Why was that information not in place before we dealt with the legislation?

I have some questions on whether it is intended to break up VHI. Again, there are more questions than answers around this possibility. What kind of subsidiaries might there be and what are the parameters for their operation? Would they be free to make profits, as Deputy Neville asked? There is much vagueness around this issue. The public will be as confused as I am on the intention of this legislation. It is pre-emptive to present this Bill without having the answers to so many of those questions. I support Deputy Neville's comments on psychotherapy and other services that are not covered. As Deputy Mitchell said, we attended a meeting with the representative groups of a number of organisations that look after the interests of the elderly where strong views were expressed, particularly on nursing homes and the fact that a large percentage of people's incomes and estates would be required for them to have nursing home care. They raised the question of ageism and equity. One must ask why certain categories of people and care are not generally included in health insurance, not specifically VHI.

I have a problem with the fact that HIQA does not cover private facilities so people who pay large amounts of money to health insurance companies do not get the same level of protection on the facilities they use as patients in public hospitals. While we rightly debate the plan to centralise the excellence required for cancer services in the public system, private organisations can supply cancer services in facilities that are not subject to HIQA's standardisation procedures, the general principle of numbers of patients, throughput and the other issues debated around public facilities. This divide must be addressed. All patients are entitled to the highest quality standards, whether public or private, and in this case private patients must be protected rather than public.

In other areas public patients must be protected. The Labour Party has serious concerns on the move towards greater purchasing of health services from private facilities, particularly the co-location of private hospitals on the grounds of public hospitals. We all have significant questions on how that will operate, how the rare experts in specialist areas will be allocated. There might be only one expert in a particular field located in a certain area. Such people should be available to private and public patients and we should not have to decide between the two groups.

We object to the idea that patients who come in to an accident and emergency department in a public hospital will be diverted to one hospital or the other depending on whether they are private or public. We are concerned about how the public hospitals will be funded when the 1,000 new private beds are open in the co-located private hospitals. Money that would previously have gone to the public hospital system from the VHI and other health insurers will go to the private hospital, which will already benefit from substantial tax relief funded by the taxpayer.

There are serious questions for the public service and patients. I do not know if anybody has done a study on the costs of this transfer, the costs foregone in the public hospital and those associated with private provision. We are entering unknown territory with these co-located hospitals. We have no detailed idea how they will operate. However some of the deals, including the one in my constituency, were signed in the last few days. The Labour Party vigorously opposed these co-located hospitals before the general election and will continue to do whatever we can to ensure there is an equitable system open to all. We do not support the concept of co-location. We are going through a transition phase from what was a monopoly health insurance company coming into competition with other health insurance companies and about to be broadened out to an even more competitive environment by the end of 2008. We seem to be moving in the direction of more of the population having private health insurance. As that happens we will have more of a two-tier health system. For the private system to work, inevitably the public system will need to get worse. There will be an incentive for those being paid through the private system to ensure enough of the population go in that direction. Already it is very high in Ireland.

That is part of the context in which the Labour Party proposed the concept of universal health insurance in 2001 and presented it as the central core of our public health policy in the 2002 general election. At that time is did not get much credence and was rubbished by Fianna Fáil. It was implied that we were doing all sorts of things that we were not doing. In the current climate there is more support for the concept. Two weeks ago the Irish Nurses Organisation stated it supported the idea of universal health insurance. It has been supported by a number of senior medical and surgical clinicians. The general public is beginning to ask why it cannot have a system that is fair and equal as operates in so many other countries. Since I became health spokesperson I have tried to read myself into my brief and in doing so I have tried to understand how universal health insurance is implemented in a number of other countries in Europe and beyond. I believe that is the only way for this country to go.

I hope the provisions in this legislation are temporary and will fit into a broader concept of universal health insurance, whereby those with the ability to pay will pay their full insurance costs, as do 53% of the population now. Those who are not able to pay should have it paid by the State and those in the middle would have a sliding scale of payments. That would be the most appropriate and fairest direction for the Irish health system. More people now want to know more about the concept as a way of coming to terms with the extraordinary problems with the health system, which we will be debating in tonight's motion of no confidence in the Minister for Health and Children.

We intend to enlarge the dialogue on universal health insurance. We intend to raise the matter in every way we can. We intend to encourage people who are thinkers about the health system — those who work in the health system and, more important, people who need to use the health system — to consider the possibility of universal health insurance. There are different ways to implement it. It is done in different ways in different countries. Essentially it is based on the concept of excellence and equity. It also has the capacity to raise standards in the delivery of health services and to ensure the best possible use of the available money.

Many things that happen in health do not encourage the best possible use of money. Fixed amounts are paid for certain things, including bed-nights, different procedures etc. There is no great encouragement for patients to avail of the appropriate care at the appropriate time. Many other parts of the system do not encourage the best possible use of the existing expertise and capacity. Everybody in the House would like to see considerably more use of community services. While agreeing with it, it still has not happened in any meaningful way. Many people who are in acute hospitals should not be there and would be more appropriately cared for in the community. In the context of the meeting we attended at lunchtime, many people being forced to go into private nursing homes would be much better off in their own community if the full support services existed in their community.

We need to have a debate about all the structures in the health service including how certain patients are insured and others are not insured leading to services being provided in different ways to different patients. There is direct competition at times between public and private lists, which is appalling as was highlighted above anything else in the past year by the death of Susie Long. In commemorating Susie Long we need to listen to her voice which clearly said that she believed in one system of health care that was universally available to all on the basis of need. She actually refused to have private health insurance because she believed in such equity of access. While I do not know whether she could afford it, she clearly said that she did not believe in it because she felt there should be equity of access.

We believe we need to reach that point. Obviously we are not there yet. Even if we were in government next week, it would take some time to implement it. It is certainly where we would like to get to. I hope we will have vigorous and informed debate on the issue.

The Bill represents a transition; it raises more questions than it answers. There is considerable confusion about what will happen up to the end of 2008 in order to bring VHI under regulation and away from its current position as a somewhat protected organisation. I look forward to the response of the Minister of State to those questions. I am pleased to have had the opportunity to contribute to the debate. As we move on to the other Stages of the Bill I hope we will be able to get clearer responses. I am conscious that as a former Minister for Health, the Leas-Cheann Comhairle knows as much about this matter as anybody else in the room. I look forward to the rest of the debate on the Bill.

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