I move amendment No. 1:
In page 4, after line 49, to add a new subsection as follows:
"(6) Cross subsidisation whereby less expensive schemes make a subvention to more expensive schemes shall not be permitted.".
We have all been satisfied with the mix of private and public health care in this country. On Second Stage I pointed out that the VHI, which is the only provider of health insurance at present, had managed to keep approximately 30 per cent of the population as its subscribers. Over the past five or ten years there have been financial problems in the VHI and this has led to a certain inequity towards its subscribers. Over 80 per cent of its subscribers are in plans A and B. Approximately 11 per cent are in plan A which gives semi-private accommodation in a public hospital; over 70 per cent are in plan B which gives private accommodation in a public hospital; approximately 10 per cent are in plan C which gives semi-private and private accommodation in private hospitals other than the Blackrock Clinic and the Mater Private Hospital; approximately 6 per cent are in plan D where patients can have semi-private cover in the Blackrock Clinic and the Mater Private Hospital; and approximately 3 per cent, 39,000 people, opt for plan E which gives private cover in both those institutions.
I have no problem with people choosing whichever plan they want. People will choose a particular plan depending on how much they can afford or whether they feel they will be better off in a private or a public institution. The more expensive plans were set up approximately 12 years ago. The institutions covered in those plans are described as high tech hospitals. However, it is important to point out that a lot of the technology there is also available in public hospitals. One does not have to go to these hospitals for high tech medicine. The hotel style accommodation in private hospitals is of a higher standard. I question the equity of people on the lower plans subsidising hotel accommodation in these institutions which are serving a small number of better off people in the higher plans.
It is difficult to get the VHI's figures. I have no intention of finding a mole in the VHI to ascertain what is happening in each category. There was a report in the Irish Medical News that the lower schemes were subsidising the higher schemes. Yesterday in the Irish Independent the chief executive of the VHI was quoted as saying:
Those who pay the more expensive premiums can be treated in hospitals such as the high-tech Blackrock Clinic and Mater Private.
Mr. Duncan said these plans were profitable and if axed subscriptions would rise by about 5pc. "It is correct to say that claims are greater than subscription income from plans C, D and E," he said. However, it is incorrect to say they were being unfairly subsidised by plans A and B.
They must be subsidised by someone. It is unfair that people who cannot afford to subscribe to the higher plans are subsidising those plans. The money must be coming from somewhere if the claims are more than the subscriptions in plans C, D and E. Plans D and E are the problem plans. It is not as if an important technique can only be carried out in these institutions. I am concerned that the maintenance is being subsidised.
I pointed out on Second Stage that clinicians are not making many of the decisions on what will or will not be an in-patient process. Day care is now mandatory for certain procedures. These decisions are made by people who work in the VHI. I wonder are the same procedures mandatory for people on plans D and E as for those on plan B. Equity needs to be shown in this regard. When a former Minister for Health, Mr. Barry Desmond, allowed the VHI to introduce plans D and E, he wanted separate payment systems so that there would not be cross-subsidisation. A firm policy was agreed with the chief executive of the VHI, but that was over ten years ago.
The VHI does not have to disclose its internal costings and it is not under the insurance ombudsman, who only deals with insurance companies covered by the Department of Enterprise and Employment. The VHI got into such a terrible mess about five years ago as a result of these expensive plans that the then Minister for Health had to call in someone to review them. Deputy Harney pointed out that the VHI might have been trading illegally because its reserves were not sufficient to cover the claims. I cannot remember the exact details, but I know that Mr. Noel Fox was brought in and he introduced a plan in 1993 to try to rectify this financial situation. Part of his plan stated:
The introduction of two special plans D and E to cater for the high tech hospitals is now recognised to have been erroneous. The pricing of the two plans, particularly plan E, was bound to be at a level which would appeal to a relatively small number of subscribers. Furthermore, these subscribers are in the higher income brackets and older age categories, and as such have a greater demand for healthcare and a higher claims rate. It was inevitable that plans D and E would suffer from adverse selection (i.e. the tendency for those subscribers with a poor health record to select the highest level of cover they can afford). Anyone subscribing to plans D and E would also desire to be treated in the high tech hospitals even for procedures which could be treated just as effectively in another acute private hospital at a far lower cost to the VHI.
It is now clear that the present plan structure will need to be radically overhauled over the next two years. [I do not know if that happened]. . . . . . Any member wishing to avail of their facilities [those of the high tech hospitals, although we should not refer to them as that because modern technology is now more widely available] for procedures which can be carried out effectively in one of the traditional acute private hospitals will be given the option of purchasing additional cover. This additional cover will not be subject to community rating but will be economically underwritten.
I do not believe that ever happened. This plan made many recommendations which were never put into place. It also stated that "Larger increases are being applied to plans C, D and E in an attempt to bring them a step closer towards becoming self-financing.". This happened initially but it did not continue, otherwise the chief executive would not be quoted as saying that "claims are greater than subscription income from plans C, D and E".
This is a great inequity for over 80 per cent of VHI subscribers who are not the most affluent in our society but who value private health care. I pointed out before that under this system people had a choice of doctor and they also had control over the timing of an elective procedure. We have to see if it is just to subsidise hotel accommodation for the higher schemes from the moneys collected from the lower schemes.