Brian Cowen
Question:17 Mr. Cowen asked the Minister for Health the meaning of his statement to the VHI when he told the VHI that it needed to be cut loose from his Department; and if he will make a statement on the matter. [8125/97]
Priority Questions. - VHI Legal Status.
(Limerick East): Under the Voluntary Health Insurance Act 1957, the Voluntary Health Insurance Board was established as a body corporate with perpetual succession in respect of which the Minister for Health was given specific powers.
Following on the measures taken by me under the VHI (Amendment) Act, 1996, to enable the board to better equip itself for the changed competitive business environment in which it must now operate, I am of the opinion that a change in the board's legal status should be examined. I have requested the board to examine and report to me on this matter, that I may consider what further steps, if any, should be taken in the interests of the VHI's members. I emphasise that it is a matter for the board, in the first instance, to propose to me any measures regarding a change in its legal status that it considers appropriate and beneficial to its effective operation as a modern insurance undertaking.
Furthermore, with the recent commencement of competition in our private medical insurance business, the Minister for Health must fulfil the role of independent regulator of the market. Accordingly, I am anxious that this new reality should be taken into consideration as regards the Minister's statutory relationship with the VHI.
The Minister may not be aware that the speech he made at the VHI anniversary dinner was not circulated.
(Limerick East): It was not scripted.
Given the situation of the VHI, every statement the Minister made at the dinner was made with intent. The Minister suggested that the VHI may have to cut loose. He suggested the company should enter a strategic alliance with one other international partner. It is interesting that the Minister, the Government and the Department direct policy for the VHI. However, the Government believes strategic alliances are a matter for body corporate. Who directs the future policy of the VHI? Is it the Minister or the VHI? Will he confirm that he suggested a strategic alliance for the VHI at that dinner?
(Limerick East): I did not have a script to circulate but I spoke with intent. There were certain ideas I wished to promote and there was a suitable audience present. The VHI board members present were not surprised as I had already communicated my ideas to them.
The question of separating the VHI from the Department raises three issues. First, is the status of the VHI the most effective vehicle for the operation of a modern health insurance company in a competitive market. When I introduced the first amending legislation since the 1957 Act, I stated that it was a legislative instalment and not the final word in the structure which the VHI would need to move into a competitive environment.
Second, the VHI may be of the view that it requires flexibility in its legal status to enable it to take on the challenges of a competitive market. Alternatively, it may feel that a joint venture would be preferable. If it feels either of these arrangements would benefit its members it will have to examine its legal position. The legal basis of the 1957 Act is unusual and has no parallel in the State sector.
Third, the Health Insurance Act, 1996, stipulates that the Minister for Health is regulator of the competitive health insurance market. This sits uneasily on the shoulders of the Minister as long as the VHI operates under the aegis of the Department. Any Minister is capable of wearing a regulator's hat on one set of issues and a ministerial hat on a different set of issues. This may present a difficulty for competitors. If legislation is being introduced the regulatory function should be removed from the Minister. Perhaps it should pass to the Department of Enterprise and Employment which regulates the insurance market and cash plans in the health insurance market. Alternatively, if the VHI is removed from the aegis of the Department it would be appropriate for the Minister to retain the regulatory function. These were the issues I discussed informally at the VHI dinner. They will face any future Minister and so it is important that there be a public debate.
The Government will make the decision regarding a strategic alliance for the VHI. The VHI must bring forward a strategic plan for its future. If I am advised that the strategic alliance route is the preferred option I will present this idea to Government. That is preferable to giving the VHI carte blanche to examine any arrangement. The board of the VHI runs the company through its acting chief executive and board members and we all know there are foreseeable difficulties, which must be confronted, resulting from current competition in the marketplace. Consequently the board, management and I consider that change is necessary. Under its new chairman I have asked the VHI to submit a strategic plan to me. If that involves recommendations for legislative change, I will examine them and take them with my views on their proposals to Government.
I am glad of that detailed reply from the Minsiter which appears to suggest the direction in which he is thinking but I must remind him we are in the real world, each of us having served in Government. The Minister mentioned policy ideas, maintaining that the board of the VHI would be aware of them. Were his Cabinet colleagues aware of or did they approve these ideas? If this Government wishes to contest the next general election as one coherent unit — endeavouring to achieve some degree of coherence as it faces the electorate — will it indicate to the electorate and VHI policyholders whether it is in favour of a strategic alliance which could be appropriately pursued? Are there ideological differences within the Government on this question? Is the Minister not seeking to suggest that he was giving some personal musings at the anniversary dinner on the direction he considered should be followed henceforth? Is he not aware, as he suggested, of the views of the board of the VHI, under its former and present chairmen, as to which direction the board should go? Will the Minister indicate whether this Government will implement a proposal to allow the VHI enter a strategic alliance? Why must the Minister couch his language in such careful terms if there are not other members of the Government very displeased that he brought these issues into the public domain at what they regard as a politically sensitive time?
While I have sympathy with the Minister in his difficulty in getting his Cabinet colleagues to agree on a certain policy direction which would enable him and the VHI to perform their rightful functions, that will be impossible and the uncertainty of direction of the VHI will continue until such time as the Government refuses to delegate its responsibility and to set the policy direction to enable its chairman and board to proceed.
An Leas-Cheann Comhairle
I remind the Deputy that this is Question Time.
Otherwise what the Minister is suggesting will be a waste of time.
(Limerick East): Deputy Cowen is in the wrong forum, he should have been at the Academy Awards last night when he would have received the best award in the fictional category.
I await the statements of the Tánaiste and Leader of Democratic Left when they see the Minister's statement. Does the Minister of State, Deputy O'Shea, agree with his suggestion?
An Leas-Cheann Comhairle
In deference to other Members I am anxious to make progress.
I am entitled to a straight answer.
(Limerick East): This is fiction, there is no discordance in Government about this issue.
The Minister will not take a decision.
(Limerick East): The only politician I have heard raise this issue with me, publicly or privately, is the Deputy.
If the Minister will not circulate his speech nobody else can raise it with him either.
(Limerick East): Nobody has raised this with me.
An Leas-Cheann Comhairle
There must be no further interruptions. Let us hear the Minister's reply.
(Limerick East): As for private musings in an after dinner speech ——
(Interruptions.)
Personal musings.
(Limerick East): They were not personal musings. It was a statement by me, as Minister for Health, in respect of the policy position I believed should be explored by the VHI.
Can the Minister confirm it is Government policy.
An Leas-Cheann Comhairle
We cannot continue to have this level of interruptions.
We must have a response from the Minister.
An Leas-Cheann Comhairle
The Deputy has had quite an innings. He will now listen silently to the Minister's reply, please.
He is not dealing with the matter.
(Limerick East): Government policy recognised the potential difficulties of the VHI and mandated me, through the board and acting chief executive, to ensure that the future of private health insurance and of the VHI's 1.4 million subscribers is guaranteed but has not specified how that should be done.
The Government does not want to know.
(Limerick East): I have indicated to the board, to the former and new chairman of the VHI, the public and to the House how I think that should proceed.
Round and round it goes.
(Limerick East): I am awaiting proposals from the VHI. I do not know whether anybody wants to enter a strategic alliance with the VHI.
The Minister does.
(Limerick East): There are companies which are interested in exploring that option. When I receive a proposal from the VHI I will take it to Government, the Government will then decide the matter harmoniously, as it has already on an extraordinary number of issues since taking office. I do not expect to run into any of the difficulties foreseen by Deputy Cowen.
Then the Minister is more naive than I thought.