Adjournment Debate. - VHI Users' Council.

Gabhaim buíochas leat as ucht ghlacadh leis an rún seo uaim ar an athló.

There has been much understandable public disquiet about the VHI in recent months. The company has lost its second chief executive in a very short period. To lose one chief executive is serious, but to lose two in less than two years reflects the fact that the company is off course and requires to be stabilised.

There also has been serious concern about the VHI's fees policy. Recently the company again put up its premiums by 6 per cent. This came on top of a raft of increases in previous months. Over the past ten years, VHI premiums have gone up by 54 per cent. In the past four years, when inflation was running at less than 2 per cent per year, the compound VHI premium increase over the period was 35 per cent.

As if customers of the VHI were not paying enough, a row with the private hospitals has resulted in subscribers facing top-up bills at the hospitals. This unseemly row with the private hospitals has been played out in the media and has damaged confidence in the VHI's ability to run its affairs, especially as stiff competition in the health insurance market looms, for the first time.

To cap all this concern, it has now been reported that an official reprimand has been issued by the VHI to the subscribers' council. The reprimand arose when the subscribers' council urged the VHI to reach an agreement with private hospitals and stop the practice of extra billing for patients. This recommendation by the council was very sensible. However, because the board of the VHI was not consulted first and its consent sought, the council has been reprimanded. Inevitably, the people on the council are up in arms.

At the time the VHI (Amendment) Bill was going through the Dáil last February, I raised this very concern about the subscribers' council. I said that unless a statutory council was set up to deal with subscribers' complaints and concerns, the VHI would try to manipulate the council.

I put forward an amendment to that effect on Report Stage, providing for the establishment of a statutory council along the lines of the Broadcasting Complaints Commission. I argued that the VHI should not be allowed to act as judge and jury when it came to consumer complaints and concerns.

I believe the Minister for Health made a major mistake in not accepting that amendment. Because the VHI had taken cynical preventative action by establishing its own council that is now the subject of controversy, the Minister decided to opt for thestatus quo. He said at the time of the debate that, if the VHI's council did not work, at the end of 1996 he would review the situation and consider the establishment of a statutory council.

At column 356 of the Official Report of 7 February 1996 he said, "I am not accepting the amendment although I share many of the concerns expressed by the Deputy." At column 359 he said:

I accept its good intention and I hope the system works as intended. I share the Deputy's desire that the VHI should have independent redress. If the provisions I outlined this morning do not do that, I reserve the right to establish and legislate for a body independent of the VHI ... there is a lot of merit in her arguments. The measures in place are probably sufficient to meet the Deputy's requests. However, if there is a need for an independent body, depending on how this works out in 1996, I will provide it.

I urge the Minister to take this course. It is clear that the VHI council has limitations and that those who are appointed to it find themselves in an invidious position. A statutory users council is the only way to proceed.

This will be an important step in restoring consumer confidence in the VHI. As the State company faces into competition, it needs to be put on an even keel. Otherwise the company could lose droves of its subscribers to the looming competition. The VHI subscriber has to be brought centre stage in the company and has to be listened to.

I am replying to this matter on behalf of the Minister for Health, Deputy Noonan, who is unable to be present this evening. I apologise for his absence.

The VHI Members' Advisory Council was set up by the VHI in December 1995 and held its first meeting on 19 January 1996.

The terms of reference of the council are: to review all communications with VHI members, including product terms, and to suggest ways in which these can be improved; to propose codes of practice in relation to all aspects of VHI business including the standards of service required from hospitals and doctors; and to review such other aspects of VHI operations as are considered appropriate from time to time.

The council is chaired by Mr. Finbarr Flood, deputy chairman of the Labour Court, and other members of the council represent a wide spectrum of commercial, vocational and public sector interests.

There have been certain reports in the media regarding relations between the advisory council and the VHI board. I understand that the question at issue relates to media coverage of certain aspects of the board's operations which arose some months ago and which the VHI board felt that the council should have discussed with it in advance of going public on the matter. However, the board has also made it clear that the council is absolutely entitled to state its concerns on any aspect of VHI operations. I also understand that the board has indicated to the council its availability to discuss matters of mutual interest, and that an early meeting has been requested by the chairman of the council.

The Minister for Health recently indicated to the House that it is primarily a matter for the board to identify and implement whatever steps are required to deal with issues such as subscriber confidence and he is confident that such matters are being addressed by the recently enlarged board as a matter of urgency.

I note that the council has been given a wide remit with regard to its terms of refererence and that is to be welcomed.

Because the advisory council has been in operation for less than one year, it is too early to say whether the establishment of this body has been a success. It is up to the Voluntary Health Insurance Board to form an opinion on that matter in the first instance. The terms of reference of the insurance ombudsman provides additional consumer protection in regard to complaints, disputes and claims made in connection with or arising out of the VHI's policies. However, as indicated previously in the House to the Deputy, the Minister for Health will keep the issue under review.

In particular, he reserves the right to establish and legislate for a body that is independent of the VHI, if the circumstances so require. It is important that VHI members feel they have a forum through which their concerns can be expressed and that the board is responsive to those concerns. As I have indicated, the Minister is keeping an open mind on the matter and if there is a need for an independent body it will be provided.