Sean Barrett (Independent) | Oireachtas source

As always, I welcome the Minister. As Senator MacSharry said, he is most assiduous in coming to the Seanad. I support the Minister's goals of abolishing the HSE - in fact, we tried to do it at a quicker pace when the Minister was last in the House - and establishing universal health insurance. However, I have serious misgivings about this Bill.

The Bill is based on a couple of fallacies. One of them, which we could debate and on which there is academic literature, is whether ageing is a major cause of increases in health expenditure. There is academic literature from both Oxford and Chicago to which I will refer on Committee Stage. The second and more serious fallacy is the way the Department, repeatedly and under several Ministers, scapegoats the competing insurance companies for the problems of VHI. The give-away line in the Minister's speech was when he referred to the need to stabilise the market. Competition does not stabilise the market. It is the dynamic of it. I am disappointed that the former Minister, Mary Harney, and other Ministers have fallen for the departmental line, which is to protect its in-house insurance company, VHI, from competition at all times.

I must strongly point out to the Minister that the competing companies never refused to recruit anybody on the grounds that they were old or sick or for any other reason. The Department failed to produce a single witness in all the court cases it has fought over this. Despite the accusations made, there are no victims and no witnesses. The Department concocted this model. In its view the only reason anybody left VHI was that the other companies cheated by not recruiting old people. It never addressed the alternatives.

Let us suppose that was the problem. How else could the Department have addressed it? It could have decided to close new membership of VHI to old and sick people, because VHI had its quota, and transferred them to these alleged cheating companies who had newly entered the market. It could have imposed a requirement that the new companies should recruit a proportion of their membership from the designated target groups. It could have devised measures to inform the old and sick customers that, as was shown in one of the reports at one time, there were savings of approximately one third. Why did it not tell the old people to move to the new companies where they would save one third of their money? It was because it was too busy protecting VHI.

That has always been the Department's goal, and the manner in which it has conducted itself is shameful. That is why it lost in the Supreme Court and in the European Court. It is why the Milliman report referred to the inefficiencies in VHI, its obsession with the age of its customers and its refusal to look at its own efficiency. The Minister referred to belated attempts in this regard, but we have been trying to do this since 1994. At every step the Government has intervened to protect its insurance company. That is shameful. It is a bad way for Ireland to represent itself abroad in respect of foreign investment. It is saying: "You can come to this country but do not compete with the State company because we will rig the rules, even if there is no validity for those rules." I am convinced there is none. The Minister has not shown us what private health insurance companies other than VHI refuse to recruit old and sick people. There are no witnesses. That is the basic fallacy underlining this Bill. If there was an ombudsman to deal with cases where health insurance companies denied cover, that ombudsman would have nothing to do because the Department has failed to produce a single case.

The Minister is increasing the powers of the Department. Given its losses in courts both here and in Europe and given what Milliman found in his report on the operation of the VHI, the Department lacks all credibility on this issue. The Minister wishes to extend the powers of the Health Insurance Authority. It also lacks credibility on this issue. We never let the market work so we do not know what market failure is. Talking about stabilising the market is really about protecting VHI. There are substantial savings available, as the Milliman report shows. I will table amendments based on that. The report shows VHI to be an organisation that is obsessed with the age of its customers, but not operating remotely near minimum cost.

This Bill is anti-consumer. If it is passed and we have compulsory health insurance, everybody will be subsidising the VHI. At present, it is just those who left VHI and saved money, as I did, who subsidise the VHI, but the entire population will be corralled into doing it. The McCarthy report reviewing State companies was published in April last year. It stated: "The VHI was excluded from the Review Group's terms of reference because the Government had already initiated a separate process that addresses both the sale of the VHI and the wider complexities involved in the private health insurance market." What has happened since then? We were told by the European court in October last year to transfer the Health Insurance Authority to the Financial Regulator, but we have not done that. There is a ¤300 million gap in the VHI finances, as was reported in The Sunday Times two weeks ago, which has not been provided for in the Estimates for this year. Is this the back door method of trying to keep the VHI going?

As the review group stated in 2007, the VHI enjoys an implicit subsidy through its sponsorship by the State, that is, its protection by the Department, as compared with competitors who must set aside financial resources from the equity provided by investors. The value of this subsidy might reasonably be quantified at ¤25 million to ¤45 million per annum. We must stop protecting this company.

I support the Minister's desire to bring it up to date. For example, the average length of stay for one treatment is 11.6 days whereas the best international practice has been cited as 3.7 days. Monopolies are bad and this one is defended relentlessly and ruthlessly in courts in Ireland and abroad with tame consultants used to support it. The VHI does not stand up to the test. I am afraid that we will adopt the wrong kind of compulsory health insurance because of the protectionism repeatedly shown by the Department of Health towards its in-house health insurance company since 1994. It is invidious that the owner of an insurance company also regulates the market. It is impossible and will not work in this Bill.