Liam Twomey (Fine Gael)

I welcome the Minister. The Minister and I have been dealing with risk equalisation for the past two and a half years and in some respects it has turned us into private health anoraks regarding debates of this nature. While the Minister and I appear to understand the issues, no one else outside the Houses of the Oireachtas appears to do so. I refer in particular to risk equalisation, which has given rise to an incredibly confusing debate for the past two years.

One must consider what is happening. Half the population has private health insurance, which mainly covers hospital care. However, such care is a right, to be delivered free to all patients. Consequently, the sight of 50% of the population seeking private health insurance constitutes a vote of no confidence in the manner in which the public health service is run by the Government. A massive increase in the numbers taking up private health insurance has been noted. While the Minister, Deputy Harney, may wish to portray this increase as having taken place because the economy is performing better, this is not necessarily so. In the context of this Bill, Members are considering the VHI's privatisation, because it is leading to the company's eventual privatisation. Consequently, premiums will increase according to market conditions or to what the VHI wishes to charge its customers, with little or no way of stopping it. The Minister's comments regarding ministerial responsibility for controlling increases in premiums were interesting. In 2001, the year before the general election of 2002, the then Minister, Deputy Martin, did not allow an increase. However, two increases took place after the general election. Consequently, there may be some merit in removing political interference from the VHI.

Members should consider the VHI itself. No one who attends hospital and pays VHI premiums has any idea what he or she pays for as the bills are not itemised. The customer does not receive an itemised bill. Members should consider what would happen if a person presented a bill he or she received from an Irish hospital after attending as a private patient to an insurance company that requires itemised bills. For instance, somebody who was previously a Member of the European Parliament or who worked for the European Union is entitled to private health insurance through the European Union but if that person receives hospital care, he or she must present the European Union with an itemised bill of all the costs incurred. That does not happen with the VHI and we do not know for what we are paying as VHI, or indeed BUPA or VIVAS Health, customers.

If the Minister is going down this road and is concerned with protecting the consumer so that he or she will not be abused because of the monopoly position of the providers in this market, we must ensure transparency in how patients are charged and therefore we must look at the idea of itemised hospital bills. There is no point in someone being told his or her hospital stay cost €10,000 and that bill being handed to the VHI for payment, only for the VHI to state it incurred costs of €900 million last year, it wants to make a profit of €100 million and will therefore charge customers accordingly on a take it or leave it basis. That is essentially what is happening in the private health insurance market at present. I am all in favour of competition, and much of what the Minister is doing in this Bill will probably prove good in the long term, but if we continue with this secrecy in regard to how the VHI charges customers and how hospitals and the VHI work together, we will see nothing arising from this that will be beneficial to patients who are the customers of the VHI. The Minister is not assisting patients in that respect.

On the €140 million shortfall, the Minister is well aware of what may be happening in Europe and she should push this in Europe, and certainly with her former colleague, Charlie McCreevy. There is no need for an insurance company which exclusively deals with health to hold such large reserves as, for instance, another insurance company which writes life or accident insurance. There is always a possibility that a hurricane will hit Ireland for which an insurance company would require substantial reserves, but both the Minister and I know from looking at private health insurance over the past decade that there will be no major calamity which requires such large reserves of a health insurance company. There is no need for such a reserve.

The VHI could more then adequately keep its reserves at €300 million. There is no need for the customer to be charged an additional €140 million before the end of next year to make up that shortfall, and the Minister knows that is the case. The turnover of the VHI is less than €1 billion and therefore she is speaking of it making up 10% in its reserves this year and next year. That is impossible to achieve before the end of 2008. If, for instance, the turnover of the VHI is approximately €800 million, it means that the company must bring in €870 million this year and next in order to make up this reserve of €140 million of which the Minister speaks. It is not necessary. It is not achievable. We need a little more clarity in such debates in this House. I would be interested in hearing the Minister's views on that.

When one speaks of privatising the VHI one is very much speaking of the corporatisation of other aspects of Irish health care. The VHI has got heavily involved in the SwiftCare clinics and no doubt it will get involved in other aspects of health care provision. That means the Minister is now privatising and corporatising services like general practice, emergency care and pharmacy care. There has been no clear debate in this House on whether people want to follow this model. This happened in Australia a number of years ago and it failed. All that happened was that the service to patients became worse, the cost to consumers increased and it did not work out as expected. The quality of care disimproved.

Before we start going down that road and facilitating a vast company like the VHI, which will have a significant monopoly in the market and which could privatise many aspects of health care apart from private health insurance, we should have a proper debate in this House. In some respects the Minister should even be considering stopping or limiting the process or ensuring there is greater transparency. If we are not careful and if we do not look at these other aspects, merely privatising the VHI will create an unholy mess for the consumers. We have spoken previously about these other aspects and it looks like we will speak of them again, but there has been no clarity from the Government in this regard. I would like to see more clarity.