Amendments Nos. 6 and 7 are related and may be discussed together.
SECTION 4.
I move amendment No. 6.
In page 5, lines 39 to 44, to delete subsection (2).
I raised this matter on Second Stage and I want to tease out why the Bill places a limit on health service providers only. It is the only professional group on which a limit regarding membership of the VHI board is placed. What about accountants, company directors, lawyers and other professionals? Why is the Minister taking this opportunity to provide that only two health service providers may be on the board? Does he have a difficulty in that regard?
It is strange, given that the board deals primarily with health care, that the Minister seeks to limit the number of health service providers. Is the director of a large company, which was indirectly involved in the provision of health services in a peripheral way, covered by the limit of two? Must the people be directly involved in the medical field?
The VHI review group chaired by Mr. David Kennedy, with which Deputies are familiar recommended that appointments to the board should be on a non representative basis. I do not want a board which includes a chief executive officer, a chief executive, somebody representing VHI staff, two consultants, a hospital manager, a nurse and a GP. I want a non representative board which makes commercial skills available to the VHI which may not be available at present.
It is limited to two because, by definition, service providers, even though they would contribute expertise about the provision of a particular service, would also be in a position from time to time to have to build Chinese walls in their minds. Their interests as service providers could be different from their interests as board members. The service providers on the board at present are aware of this aspect and have acted properly on all occasions.
However, I do not want a dominance of service providers on the board. The VHI needs a more commercial approach and the board should include people who have actuarial, accounting, marketing and sales skills. It should also include people who represent the perspective of individuals who are insured. It is most important to include a representative of the consumer.
I am not sure whether this view is shared by Deputies, but, if some restricton along these lines is not included, in the normal course of the political process when a Minister appoints a board, he could end up with a board which includes up to eight service providers. He would be lobbied by his colleagues; Deputies and Senators would push for consultants and GPs because that line of thought would be brought to bear. It relates to medical matters so medical people should be appointed. I decided to include a restriction for the reasons outlined and because of how it will work in practice when a Minister appoints a board.
I accept the board should be regarded as non representative. I also accept the interests of service providers can from time to time be in conflict with their membership of the board and the policies it wishes to pursue. However, I am not sure, just because a person is a health service provider his interests could be in conflict. The same type of conflict could exist for a lawyer who was a member of the board and also for an actuary, accountant or other professional. I am not sure it is fair that only the number of health service providers should be limited to two.
Perhaps the Minister will outline whether he proposes to make the chief executive officer a member of the board. If he is a member, it means 11 other members must be appointed and there could be two health service providers and nine accountants, lawyers or company directors. I agree the board should be non representative, but I am not sure it is fair that only health service providers are singled out when other professions could have equal conflicts of interests as members of the board.
The convention wisdom is that the VHI is primarily about health. However, this is not the case from the perspective of the board; it is about insurance. The skills of health care provision are not necessary on the board, rather skills appropriate to an insurance company.
Yes, I agree with that.
If such a restriction was not included in the Bill, it could end up that the board includes many people who are excellent regarding the provision of health care but who may know very little about insurance. The other effect is that once the restriction is included it guarantees there will be at least two health care providers. It would be difficult for a Minister to appoint less than two.
Unfortunately, I did not have an opportunity to put down any amendments. However, if I had that opportunity, I would have put down amendments to this section, not so much along the lines suggested by Deputy Geoghegan-Quinn but regarding the number of members of the board. The Minister is making a mistake.
As subsection (1) refers to 12 members, there is a belief that is the total. However, if one examines subsection (3), there is no limit to the number of people who can be appointed. It could be 20 or 25 if the Minister made a regulation to that effect and this is wrong. The figure of 12 members is too many for a start, but the possibility of more than 12 is wrong.
The figure of 12 is not compulsory under subsection (1) as it is a chairman and not more than 11 others. It could be five or six others. However, subsection (3) gives rise to concern and I do not understand the point. Surely 12 is more than enough; why would one want to increase it? If one wants to decrease the number, it is not necessary to make a regulation. This can be done under subsection (1) which states a chairman and not more than 11 others. I do not see the point of subsection (3). I cannot put down an amendment now but I intend to do so on Report Stage to reduce the figure of 11 ordinary members in subsection (1) and to delete subsection (3) which is unnecessary. It could be dangerous if the board is packed to this degree.
I was speaking on a motion recently about a notoriously unsuccessful board set up a little over a year ago. I said I thought one of the reasons it was not successful was that there were so many people on the board. Each one of the 15 members saw themselves as being there in a representative capacity. If one has a large board, such as the one proposed, the members will all inevitably think of themselves in a representative capacity.
I agree with Deputy Geoghegan-Quinn to the extent that if it is specified what people may not be on a board or if a limit is put on what they may be, it ensures that those appointed in that category see themselves as shop stewards, so to speak.
Whatever the faults of the VHI over the last 30 years, those who served on the board and who were themselves health service providers did not see themselves as shop stewards. They were not there just to argue the medical or hospital case and they took a broad view. The five member VHI board was reasonably successful for a lot of its time and I do not think the Minister will improve it by having 12 or more people on it.
The Minister is right to make the point that it is an insurance company and health is just the risk it insures against. If one was to bring the contrary argument to its logical conclusion one should say that the board of every life assurance company should consist of doctors only because they insure people against dying. Obviously, that would be pointless. I am sure the Minister's intentions are good but he should rethink this section. He should look at the recent example of a board on which there was a big extension of the number of members which added nothing to that board's effectiveness. It may also mean that a lot of people who have nothing to offer the board will not be shy about offering their services — we all have experience of such people. The Minister only leaves himself open to greater pressures from those who have nothing to contribute.
I have dealt with many boards in my time and what one needs is a reasonable number of people — in the region of five to seven — capable of and prepared to take a broad commercial view; not people who see themselves as representative of particular interests. Where boards are being appointed, representative of particular interests, they are a disaster because they spend most of their time fighting with one another. The greatest examples of that are in the field of agriculture where there are often serious conflicts of interest between primary producers and processors and boards become stultified as a result.
This section merits rethinking. The numbers should be reduced; subsection (3) — and perhaps subsection (2) — should be taken out.
Some of the VHI's recent problems have been through non-consultation with the medical profession. Therefore, I would like to see more flexibility than just two nominations. If the Minister thought there were others who could be of assistance he should be able to nominate them.
The board has not been successful in controlling insurance costs. Practically every time one gets a policy reminder the annual premium has gone up. One may find oneself forced to move from one scheme to another because of the rising cost. If service providers are part of the health service and the provision of health care they ought to have some input to the board. The service providers have an understanding of the issues in general and ought to have a reasonable voice on the board. I do not think they would necessarily have a negative effect on the operation of the board and its efficiency. The board requires to have available to it far greater expertise at that level than perhaps is has had up to now.
I accept Deputy O'Malley's point that in making appointments we have to ensure they are relevant by putting people on the board who have a keen interest in the issue, who have an understanding of the board's remit and who are able to make a genuine and definite contribution which will permeate through the organisation. For too long boards have been appointed comprised of people who may have a commitment but little expertise. That must have an effect on those in an organisation or an industry; they may see people on the board in control of the organisation who have little understanding or feel for the remit of the board, no matter how well intentioned they may be in offering their services.
Consequently, I would not be inclined to rule out the service providers by restricting their numbers to two but the Minister is giving himself the opportunity to bring others on the board, if he sees fit, by regulation and that is a good move.
This subsection should be deleted. The constitution of any board is a matter best left to the discretion of the Minister who has responsibility. I agree with Deputy O'Malley and Deputy Flood that for quite a number of years now Governments have been quick to appoint people who have special skills whether professional, financial etc., who in the past Governments did not always see fit to include on State boards. A board such as the VHI needs the strength the Minister wants to appoint to it. However, the Minister is tying his hands and those of his successors. A limit should not be put on one sector and including that in the Bill makes it difficult for the Minister or his successors. The Bill would be better if that particular subsection were deleted.
The present chairman of the board is Mr. Noel Hanlon who is also chairman of Aer Rianta. Of the other four on the board two are consultants, both male, and there are two women, a tax lawyer and a former VHI higher executive officer who is now involved in other activities.
The VHI and health insurance is in the process of major change and, as the shareholder rather than the Minister, I want to bring other skills on the board, ones which would be appropriate to an insurance company in times of rapid change. The VHI needs good control from the board to ensure it is a cost-effective organisation. It also must enter the market place and face whatever competition will come. Even if the challenge is less than we expect it still must enter the market place so that it continues to have a strong base of young people to ensure the continuance of community rating. It needs people who can project the risk into the future. That will exist in-house through executive and actuarial staff but it is important to have those skills on the board also. What I have in mind is that those skills should now be brought in.
Other changes must be managed when the new board is in place, one of which I raised, what the corporate structure would be. It is appropriate that I have a range of skills to drive that agenda forward and provide advice for the Minister of the day. The regulatory section gives the Minister the option to decide along the lines suggested by Deputy O'Malley. Once the process of change is in place and things have settled down, it might be appropriate to have seven or eight people. By regulation, the Minister of the day could decide to peg the figure at eight or nine and that would have regulatory force. This is the process I have in mind.
Despite the good work of the present board, which is bringing relevant skills to bear, one can see there are other skills which would also be relevant. I am strongly of the view that it should not be a representative board and I am glad there is a level of agreement on that. On Deputy Flood's point, if I was to appoint a series of service providers, I believe the perspective of the service provider could be different from that of the consumer and the rights of the person who pays the premium must be protected at board level. With the best will in the world, a person whose experience of life is solely in the provision of health services would want to deliver the best health services possible but might not have the same rigorous view of the level of premia which would be appropriate as those who would have more of a consumer's perspective.
I hope the Minister was speaking tongue in cheek when he suggested a Government or Minister in the future would bring in regulations to reduce the membership on the board. Three of us have been Ministers and neither of the two on this side would suggest a Minister of a future Government would propose to introduce regulations to reduce the number of members on a board; normally Governments would be inclined to increase the figure. I agree with Deputy O'Malley that the smaller the board, the more efficient it usually is.
We all agree with the Minister that the board should not be a representative one but we suggest the composition of the board should be left, as it is in other instances, to the discretion of him, his successors and the Government of the day. We should not be introducing a section which provides that only two representatives of a section of the community should be on that board. I am pressing the amendment.
Amendment put.
The Select Committee divided: Tá, 19 Níl, 12.
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Tá |
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Coughlan, Mary. |
O'Malley, Desmond J. |
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Flood, Chris. |
Smith, Brendan. |
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Geoghegan-Quinn, Máire. |
Walsh, Joe. |
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Martin, Micheál. |
Woods, Michael. |
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Moffatt, Tom. |
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Níl |
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Ahearn, Theresa. |
Lynch, Kathleen. |
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Bradford, Paul. |
McCormack, Pádraic. |
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Costello, Joe. |
McGinley, Dinny. |
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Fitzgerald, Frances. |
Mulvihill, John. |
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Flaherty, Mary. |
Noonan, Michael (Limerick East). |
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Kenny, Seán. |
Pattison, Séamus |
Amendment declared lost.
Amendment No. 7 not moved.
Question proposed: "That section 4 stand part of the Bill".
Before the select committee divided, the Minister said that his idea was that when the board settled down he would use the power under subsection (3) to reduce the figure below 12, because he though a lower figure was preferable. He does not need the power under subsection (3) because under subsection (1) it shall be a chairman and such number, not being more than 11, of other members as the Minister may, from time to time determine. He can reduce the number anyway under subsection (1) so he does not need the power under subsection (3). He need not appoint 12 people in all, he could appoint a lesser number and if after a period it seemed appropriate to have still smaller number, he can determine that there should be a smaller number. It seems, therefore, that subsection (3) is superfluous if it is put in for the purpose for which the Minister states.
Subsection (3) is not just superfluous from that point of view, it is positively dangerous from another point of view in that it would allow a Minister who was given to large numbers of those who might adulate him he could increase it, as I said earlier, to 25 of whatever ilk.
Is Deputy O'Malley one of those who adulate the present Minister?
No. It seems to me, therefore, that it is most unwise to leave subsection (3) in that you could end up with a huge number, if you do not need it to reduce the number below 12. I propose that subsection (3) be removed for that reason; I am sure we could do it by agreement. It is not necessary to reduce the numbers and can only be used therefore, in practice, to increase them still further. I am sure the Minister agrees that increasing it beyond 12 is totally undesirable and would not happen in practice.
When a section is framed on the basis of a Chairman and not more than 11 other members, the political dynamic takes over, and the Minister will be pushed to fill all existing vacancies. I had an example of it here during the vote when a colleague came over to me and said: "I hear you have a vacancy on such and such a board, I am the person for it." That is the political dynamic. It would not be pegged below a level simply by a Minister deciding not to appoint the full 11 members.
On the question of whether the provision to increase by regulation is absolutely necessary, I will look at that between now and Report Stage and consider the points made. My first correspondence with the new board will include a request that it looks at its own corporate structure and bring forward proposals. If we were to change the corporate structure these arrangements will fall anyway, because new arrangements will have to be put in place then in terms of the board.
It is not true that if a section allows a Minister to appoint not more than 11 he must, therefore, appoint 11. He is under no obligation to do so. I can recall many boards with whom I dealt. One of the ways of dealing with the problem of appointing people is to leave vacancies; often the boards were more effective for that reason. I sometimes felt that if I filled the vacancies I would be filling them with people to whom I would prefer not to give those positions. It was a convenient way of not doing so. The political dynamic is not so strong that if the law allows you to appoint a lower number you cannot appoint a lower number. In practice, subsection (3) can be there only for the purpose of increasing the number. I think even the Minister agrees this is undesirable, therefore it should be taken out and we should agree to do so.
I will not agree to take it out now, but I will think about it again between now and Report Stage. I am not using that as a formula to get it off the table today, I will seriously consider what the Deputy has said between now and Report Stage.
Will the Minister explain what a determination under section 5 (1) of the Principal Act is? Unfortunately members in this building do not have access to a library and I could not look up the 1957 Act.
That information will be provided. I do not have it to hand at the moment. Section 5 (1) of the Principal Act says:
The board shall consist of a Chairman and such number, not being more than four, of other members as the Minister shall from time to time determine.
That is curious. It means the determination there already would remain in force. What is the point of that subsection?
It will remain in place until a determination is made under what we are enacting now. I want continuity; I do not want an interregnum.
I find it difficult to agree. I know the Minister said he is not just fobbing us off by saying he wants to think about the points we made in relation to this section between now and Report Stage, but when we get to Report Stage we are not entitled to vote against the section, we are entitled only to move amendments moved here and not passed. If the Minister comes back with this section on Report Stage as it is here, with no change, we do not have an opportunity to vote against it so it creates a difficulty for us.
I will make clear what I am considering. I am not considering changing the section; I am considering changing the regulatory provision which would allow a Minister to increase the board above 12 or to reduce it below 12. That is what I am considering; nothing else in the section.
Question put.
The Select Committee divided: Tá, 12; Níl,7.
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Tá |
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Ahearn, Theresa. |
Lynch, Kathleen. |
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Bradford, Paul. |
McCormack, Pádraic. |
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Bree, Declan. |
McGinley, Dinny. |
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Fitzgerald, Frances. |
Mulvihill, John. |
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Flaherty, Mary. |
Noonan, Michael (Limerick East). |
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Kenny, Seán. |
Pattison, Seamus. |
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Níl |
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Flood, Chris. |
O' Malley Desmond. |
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Geoghegan-Quinn, Máire. |
Smith, Brendan. |
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Lawlor, Liam. |
Woods, Michael J. |
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Moffatt, Tom. |
Question declared carried.
On a point of order, have we agreed to attempt to conclude at 5.30 p.m.? It is difficult for rural Deputies and the whips to extend much longer beyond the Dáil Sitting without warning people in advance.
The target is 5.30 p.m.
We hope to conclude by 5.30 p.m.
It would be wiser to proceed. It is likely we will be finished by then.