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| Sean Quinn (right), founder and chairman of the Quinn Group; pictured with Ian Pearson, former Northern Ireland Minister for Enterprise; and Viola McBride, call centre agent, at a Group call centre in Enniskillen. |
Vhi Healthcare today welcomed the decision of the European Court of Justice that the European Commission acted within its powers in facilitating the introduction of Risk Equalisation in Ireland.
According to Vincent Sheridan, Chief Executive, Vhi Healthcare: "The decision of the European Court today to dismiss the Bupa action is very good news for consumers in Ireland since a negative judgment could have meant the end of Community Rating for health insurance in this country.
Community Rating has been the basis of health insurance in Ireland for the past 50 years. Indeed the decision will be welcomed right across Europe as evidenced by the involvement of the Dutch Government in the case".
He continued "Today's decision is bad news for those who wish to use Community Rating as a means of generating windfall profits by way of regulatory arbitrage . It also marks another failed attempt by BUPA to destroy Community Rating in Ireland"
The State-owned Vhi is subsidised by the two other companies, Quinn Group's company Quinn Healthcare, that traded as Bupa Ireland until its acquisition in early 2007 and VIVAS Health because Vhi's subscriber base has an older profile and premiums are not related to age.
More than 50% of Irish adults have private health insurance because the standard of the public health service is low.
Speaking today in favour of the Irish Government, Oliver Tattan, Chief Executive, VIVAS Health said:
“While we are disappointed that the Commission has endorsed a system of subsidisation of the most dominant player in the market and has deemed that this form of state aid is legal the CFI case was just one of many legal investigations underway at a local and European level. The outcome of the other cases may not be known for a substantial period of time. Until all investigations are resolved the market will continue to suffer from a lack of investment and from limited competition.
“There is a need for urgent action by the Irish Government to address the wide range of issues facing competitors in the health insurance market in Ireland – the most critical of which is the dominance of the Vhi. The ongoing implementation of the risk equalisation scheme will only serve to further exacerbate this issue – these issues have been recognised and raised both by the Government commissioned Barrington Report and by the Competition Authority .
“We are calling on the Government to reform the market regulatory regime; to outline how it plans to ensure that the Vhi will achieve its required solvency levels within the next ten months; to set out a workable form of Risk Equalisation that is equitable, fair and sustainable and to develop a plan for reducing Vhi’s overall market share.
“The government has an opportunity to address this issue in the upcoming Vhi Bill by ensuring that a market reduction plan for the Vhi is the centre piece of that bill. If the dominance of the Vhi is allowed to continue this will have a significant impact on other developments in the wider health system such as the co-location of private hospitals on public lands and investments in new treatments and medical innovation all of which will be massively reliant for survival on coverage from the Vhi.
“We look forward to the outcome of the outstanding legal actions but are highlighting the need for market reform to continue in parallel with the ongoing legal deliberations. Without urgent reform consumers will suffer from a lack of choice and competition and the market will suffer from a lack of investment in treatments, hospitals and clinics.”
Statement from Quinn Healthcare:
We note the decision of the European Court of First Instance in relation to BUPA's case on Risk Equalisation but have not had a chance to review it in detail.
However, we believe that there are still serious competition issues in the Irish Health Insurance market as a result of the Vhi's dominant position and the fact that it is not subject to normal insurance regulation requirements. This lack of competition is clearly illustrated by the fact that there are only two private companies operating in the health insurance market compared to over 20 Irish and overseas insurers operating in the rest of the general insurance market in Ireland.
Clearly, the Vhi's dominance and the lack of competition in the market is an issue for government to consider in the context of their ongoing support for the Vhi.
