Mary Harney (Dublin Mid West, Progressive Democrats)

To be fair, psychiatrists in the private system are not the high earners. I am talking about acute services, excluding psychiatry, although private psychiatric hospitals exist, such St. Patrick's, which is a completely private institution.

There is a hive of private activity in the public hospital system. Much of my approach recently has been to try to separate that and ensure every patient gets access to those facilities on the basis of medical need. If there is private provision of health care and money to be invested in health care, I want to encourage it, provided everybody can have access to high-quality treatment.

Senator Bradford accused me of tampering. In the court case and other reviews, it has always been suggested that the form, rather than the principle, of risk equalisation should be constantly reviewed. A few months ago, we got rid of the three-year holiday where companies came into the market and paid nothing for three years. We never envisaged that a corporate structure could be used to take over an existing entity and avail of that three-year exemption. That loophole was closed. By virtue of closing it, we must bring in an order to facilitate any risk equalisation from that company. That order was necessary. We are going with the figure of 80% recommended by the Barrington report. There is also an EU dimension that felt that getting rid of the three-year exemption may have been a bit harsh and that we needed to be more proportionate.

This represents a loss of €8 million to €10 million to the VHI per year. To put it into perspective, the VHI earns more than €1 billion in premium income. The loss is less than 1% of what it earns. The Senator's party opposed the emergency legislation. If this had not come in, the VHI would have lost 15 times more than it will lose through this particular measure. It would have lost €150 million. There are other issues.

This is not a wide debate on everything. The Government has decided that by the end of 2008, the VHI must be authorised by the regulator. This means it must meet the solvency requirements of its competitors and that the derogation goes. The landscape will be changed completely. I hate to use words such as "market" after hearing Senator Norris, but the reality is that we want to see a number of companies providing good products. One does not get innovation where there is a single supplier in any market. Competition is not perfect but it is much better than if none exists, as we see in many other markets. One gets more innovation and more price-sensitive products. The VHI has a 75% share of this market. If we were to go back to a situation where the VHI had a 100% share of the market, it would not be satisfactory and nobody would favour it.

For many reasons, we must continue to review the level of the risk equalisation. The VHI argues that we do not risk equalise enough. There are a number of recommendations about lifetime cover, lifetime community rating and encouraging young people by giving them incentives to join early so that one has a pool of young people and, therefore, one makes insurance more affordable. That has been put out for discussion. Owing to the fact that we have open enrolment in Ireland, anyone with an insurance company, no matter how sick he or she is, can switch to another company without any penalty or loss of time. This is not understood and is among the changes that will be introduced on foot of the Barrington report, which is pro-members and pro-subscribers to private health insurance, which is a good thing.