Bupa to pull out of Ireland

fatboypee

Heard this morning that some institution is to recommend VHI be broken up...

thereby the excuse for the government to step up and float VHI, secure in the knowledge that risk equalisation will ensure a good flotation price as the VHI stock will not be seen as a vulnerable investment...

Great job Mary, as per usual.....

Tazz T

aidanodr wrote:

Well Guys,

I realise Health is far more important but I have to say the following -

Bupa now gone ala VHI and recently SMART gone ala EIRCOM. The incumbants are screwing any chance of competition in Ireland PLC. As was with the 45000 Smart customers, the bulk of the 450,000 Bupa customers will go back to VHI - OUT OF FEAR. As with the Smart situation people will basically say hey back to VHI with me, at least they aint goin under and I am stayin put from here on in. This now ruins any hope for new competition to enter the market in the future, not alone in health but in all other market areas.

Also - look out for general health price increases and win back ads on the radio, tv and the web from VHI and VIVAS

Cheers
Aidan [ already bitten by the smart/eircom situation ]

Totally agree with your sentiment Aidan. Can I add ESB and the Vintners Association to your tally of organisations that the gov has assisted in making the Irish market one of the most uncompetitive in the world.

fatboypee

parsi wrote:

Strange really how everyone's mileage varies. I haven't had any issues with VHIs claims service - it fact for me it has been painless. Their customer service agents that I have dealt with have been fine. And of course they have increases every year. But so do Bupa. And so do the doctors and so do the hospitals.

It would be nice if we didn't have to have health insurance but hey that would have to be funded from taxes and the PDs hate taxes.

Indeed it would be great if we didn't have to have private health insurance, but as we do, would'nt it also be great if it was truely private as well ? I.E. NOT just public health care plus coverage of a PUBLIC HEALTH CONSULTANT only quicker !!!!? ??

Kashkai

Just reading through all the posts, there's a lot of FF/PD bashing going on. But do you honestly believe that an alternative government would have done anything different? They would be equally afraid of losing the grey vote (I'm no FF/PD supporter - I hate all politicians equally:mad: ).

The heart of the matter was that the VHI were carping on that they had an older age profile amongst their members and thus they had a higher proportion of people making claims than the younger membership of BUPA. Thus they had to make higher payouts and therefore weren't as profitable as BUPA. However, BUPA wasn't turning away older people trying to take out health insurance. It was just a case that the older members of the VHI didn't feel comfortable leaving their trusty health insurer (who's been fleecing them for years) and joining the new kid on the block. Thats why BUPA's membership was generally younger as it is the younger generation in this country who won't take crap from the likes of Eircom, established Banks and the VHI and who are more likely to move their telephone/mortgage & banking/health insurance to a new competitor who will actually value their custom and will provide an efficient and courteous service.

I'm covered with BUPA until January 2008 and I'm holding out the hope that Charlie McCreevey will stick his oar in (in the guise of the EU competition laws) and might make it possible for BUPA to stay. If this fails, I'll consider joining VIVAS or going public. I'm not going back to the VHI - BTW did you see their chief exec on the telly last night "regretting" BUPA's decision to pull out. I bet he bloody is as now he won't be getting €160m over the next three years.

fatboypee

Prosperous Dave wrote:

...I bet he bloody is as now he won't be getting €160m over the next three years.

Yep, but he's still got the security that risk equalisation has brought. Worth more than the 160m to mister monopoly and his government cronies...

Kashkai

fatboypee wrote:

Yep, but he's still got the security that risk equalisation has brought. Worth more than the 160m to mister monopoly and his government cronies...

True and with the knowledge that he can have the taxpayers sheltering him from true competition, this "public service" hack can sit back and award himself a nice christmas bonus - unlike the BUPA staff who are facing an uncertain future.

I love Ireland but I hate (and I very rarely use that word) the assholes who stifle any attempt to break the monopolies who have fleeced Sean and Mary citizen since the founding of this state. They are all a truly parasitical breed who have the protection of their cronies in the Dail (solicitors/barristers. publicans, auctioneers, doctors.) Our esteemed representatives are drawn from these professions and they represent their interests in lieu of the people who voted for them. However, whats the alternative, all the parties are the same no matter what they call themselves. God help us all:eek:

ken90

BUPA knew the rules before they came into Ireland.
The biggest mistake was letting them away with it for years and letting them make extraordinary profits.

NEXT TIME A HOSPITAL BILLS YOUR HEALTH INSURER_CHECK IT.

Every time I have checked, I have found massive overcharging to the point of FRAUD. We are paying for this

MrPudding

Santa Claus wrote:

No government will ever get rid of risk equalisation, because then the older member would be charged more....

The amount older people get charged has nothing to do with risk equalisation. It is community rating that ensures we all payt he same regardless of our age.

The removal of risk equalisation will not automatically mean that older people get charged more. No one is suggesting a removal of community rating.

MrP

dahamsta

Devon wrote:

VHI aren't obliged to "take on" older sicker people if they don't want to, and if they do, their premiums should be representative of their condition, just like car insurance. The VHI bosses will be popping corks about now...

You need to read about the subject you're commenting on if you want to look like you actually understand what you're talking about.

1. VHI aren't necessarily "taking on" older people (they're not necessarily "sicker" either btw), they already have them, and those people don't want to leave VHI for one reason or another.
2. Premiums are fixed via community rating, VHI couldn't charge a premium "representative of their condition" if they wanted to. And I wonder if you'll feel the same way when you're "older [and] sicker".

On the subject in general, I'm a VHI customer, carried forward from the policy my parents set up for me as a child. I've had to use it once, thank the gods, and my claim was handled with zero input from me. Super efficient.

BUPA knew what they were getting into. Good riddance to bad rubbish.

adam

Hotblack Desiato

Prosperous Dave wrote:

I love Ireland but I hate (and I very rarely use that word) the assholes who stifle any attempt to break the monopolies who have fleeced Sean and Mary citizen since the founding of this state. They are all a truly parasitical breed who have the protection of their cronies in the Dail (solicitors/barristers. publicans, auctioneers, doctors.)

I would include BUPA in this. They didn't come in here to compete with VHI, but to create a cosy duopoly which was exceedingly profitable for BUPA.

There wasn't real competition, there was O2/Vodafone style competition as it was before Meteor got big. Similar but not identical plans, designed to make it as hard as possible for the consumer to compare directly, with a broadly similar cost.

The big difference between BUPA and a mobile phone operator is that community rating applies so everyone pays the same - but there is a huge difference in your costs depending on the make-up of your consumer base. On the news the other day it said that the cost of claims from one older consumer can eat up the profits from seven younger ones. BUPA have been creaming off most of the new health insurance consumers and much of the large corporate market in tech firms etc. with a young average age.

They've been undercutting VHI, but only very slightly, while having claim costs far less than VHI's due to their customer base. They've been laughing all the way to the bank and now that the playing pitch is being levelled they're grabbing the ball and going home.

As dahamsta said, good riddance to them, we can't maintain community rating without some sort of equalisation scheme, and BUPA do not want to be seen to publically back down on their threat.

B*tch about the VHI all you like, the real question is - if VHI is as inefficient and costly as you claim and BUPA is so wonderful and efficient as you claim, why on earth aren't BUPA's premiums FAR lower than VHI's are?

They've been profiteering and taking advantage of community rating to line their pockets. And you call this 'competition' ??

Santa Claus

I wouldn't be suprised if we see some work-around on the situation and BUPA end up staying after all...Was talking to the local FF TD when I was at the doctor this morning as his office is next door and he was saying that the TD's/Councillors from cork are kicking up murder about the job losses and something is going to have to be done!

fatboypee

ninja900 wrote:

I would include BUPA in this. They didn't come in here to compete with VHI, but to create a cosy duopoly which was exceedingly profitable for BUPA.

There wasn't real competition, there was O2/Vodafone style competition as it was before Meteor got big. Similar but not identical plans, designed to make it as hard as possible for the consumer to compare directly, with a broadly similar cost.

The big difference between BUPA and a mobile phone operator is that community rating applies so everyone pays the same - but there is a huge difference in your costs depending on the make-up of your consumer base. On the news the other day it said that the cost of claims from one older consumer can eat up the profits from seven younger ones. BUPA have been creaming off most of the new health insurance consumers and much of the large corporate market in tech firms etc. with a young average age.

They've been undercutting VHI, but only very slightly, while having claim costs far less than VHI's due to their customer base. They've been laughing all the way to the bank and now that the playing pitch is being levelled they're grabbing the ball and going home.

As dahamsta said, good riddance to them, we can't maintain community rating without some sort of equalisation scheme, and BUPA do not want to be seen to publically back down on their threat.

B*tch about the VHI all you like, the real question is - if VHI is as inefficient and costly as you claim and BUPA is so wonderful and efficient as you claim, why on earth aren't BUPA's premiums FAR lower than VHI's are?

They've been profiteering and taking advantage of community rating to line their pockets. And you call this 'competition' ??

yes, BUPA profiteering, have VHI been doing it all for free then ? How do we know the real costs ? Why do we have to know the real costs ? Why are we in such a sh1t situation as to NEED health insurance when the country is so wealthy and we're getting tax back hand over fist ?

VHI is publicly owned, you talk about level playing fields when the government legislates in favour of its own company.... would it be the same if BUPA were requesting equalisation ? Think the legislation would be passed ?

I dont...

jimmycrackcorm

fatboypee wrote:

Ask yourself one question if you disagree, if BUPA had the older demographic, would BUPA get a look-in in risk equalisation to the cost of VHI ? I think NOT !

Fatboy.

Actually yes, they would. That was the whole point of Risk Equalization, to compensate any other competitors for their share of the older subscribers. In a few years time Vivas would have to pay and that would be shared between VHI and Bupa in proportion. The whole point was for community rating and not as a sop for the VHI.

Bupa made huge profits but yet still put up their prices so as not to make it worthwhile for them to take on older customers moving from VHI. Imagine how they would react if subscribers migrated en-masse due to lower premiums - they'd claim it was unprofitable and get out.

11.3 SECONDS

VHI constantly blame "medical inflation" as the cause for their ritual annual increase.

BUPA are going. If everyone left VHI and collapsed it I wonder how quickly this so-called medical inflation would collapse also. My cynical streak makes me think that medical inflation is caused partially by the availability of a ready supply of funds from private health insurance.

The only thing keeping VHI alive is the crap state of our public health system which makes people feel the need to have private cover.

I think that I will just go and live in France. At least I wouldn't have to listen to Harney....

miju

jimmycrackcorm wrote:

What BUPA are saying now that is in realistic market conditions the business is just not profitable enough to be in.

yes , risk equalisations means they'll lose over €1 million a week , thats not a million of profit that's a 100% negative loss

so in one fell swoop fiana failure have wiped 450 jobs , a profitable company AND competition in a market in Ireland all in one go ..... if only they were that effecient in everything else

roll on the elections

Santa Claus wrote:

he was saying that the TD's/Councillors from cork are kicking up murder about the job losses and something is going to have to be done!

and if you believe that , just lip service is all that is

jimmycrackcorm

miju wrote:

yes , risk equalisations means they'll lose over €1 million a week , thats not a million of profit that's a 100% negative loss

so in one fell swoop fiana failure have wiped 450 jobs , a profitable company AND competition in a market in Ireland all in one go ..... if only they were that effecient in everything else

roll on the elections



and if you believe that , just lip service is all that is

After 10 years, Bupa are leaving with €100 million in profit. Their profit margin here is over 17% while in the UK it is 5%. They knew before market entry that risk equalization was to be implemented. But what the hell, they realized that they could still delay it for as long as possible while they made a huge quick buck.

If Bupa were really so concerned about it, why didn't they offer huge discounts to the over 50's to get them to migrate from VHI. If they got enough then the risk equalization wouldn't have applied. But of course they matched the VHI price increases closely instead.

Your criticism of the government is misplaced. They were right to impose risk equalization because, after all, we'll all be older and more susceptible to illness at some stage. But Bupa knew that risk equalization was part and parcel of the deal and they engineered their products for maximum profits for as long as they could.

MrPudding

jimmycrackcorm wrote:

After 10 years, Bupa are leaving with €100 million in profit.

So they made 100 million in profit over 10 years? Are you sure of that figure? If it correct then the risk equalisation is even more retarded than I actually thought.

Is it the case that they have to pay roughly 50% of the profit they made in 10 years to their larger competitor each year?

MrP

mike65

They are not leaving with 100 profit, they have to settle outstanding claims for a start then they have to wind-down the ops. Anyway it does'nt matter if BUPA has a swag of a euro or a billion the issue is not profit (or lack of) its the failure of government to design a system that encourages competition. VHI has to be cut loose and broken up.

Mike.

mike65

If everyone left VHI and collapsed it I wonder how quickly this so-called medical inflation would collapse also. My cynical streak makes me think that medical inflation is caused partially by the availability of a ready supply of funds from private health insurance.

The only thing keeping VHI alive is the crap state of our public health system which makes people feel the need to have private cover.

Spot on, the government will never let VHI go bust though, its the states baby after all. The funding set-up is the worst model possible, the government set the budget and then the health system finds ways of spending the cash but as the HSE a sprawling mess run by the kind of people that would never last in private enterprise significant ammounts of money is squandered.

To fix this the health system should simply do the work then write a bill which is then paid by the dept of health. The "invoices" should be subject to random audit.

In other words the money should follow the service not the other way round.

Mike.

jimmycrackcorm

mike65 wrote:

They are not leaving with 100 profit, they have to settle outstanding claims for a start then they have to wind-down the ops. Anyway it does'nt matter if BUPA has a swag of a euro or a billion the issue is not profit (or lack of) its the failure of government to design a system that encourages competition. VHI has to be cut loose and broken up.

Mike.

Given their lower customer age profile then I don't think that will make much ofa dent.

So they made 100 million in profit over 10 years? Are you sure of that figure? If it correct then the risk equalisation is even more retarded than I actually thought.

Is it the case that they have to pay roughly 50% of the profit they made in 10 years to their larger competitor each year?

Yes - it is an audited figure. Don't forget that that is the profit from a startup business not a mature business. Again I say - had Bupa created attractive policies to encourage older customers to join then they wouldn't have to worry about risk equalization. It would be naive to think that Bupa are thinking of anything other than profit otherwise knowing full well in advance of the implications of RE, they could have strategized for it in a way other than the quick buckway.

scuby

Bupa were still hiring people up until last week !! friend was telling me that a girl in fermoy handed in her notice at work last week, to join bupa .... and now has no job, surely they knew at that stage they were going to pull out of ireland.... thats that girl shafted !! and surely not the only one......
but i still don't think they will leave ireland...

mickcarroll10

miju wrote:

yes , risk equalisations means they'll lose over €1 million a week , thats not a million of profit that's a 100% negative loss

so in one fell swoop fiana failure have wiped 450 jobs , a profitable company AND competition in a market in Ireland all in one go ..... if only they were that effecient in everything else

roll on the elections



and if you believe that , just lip service is all that is

The ultimate beneficiary of risk equalisation is the insured population, particularly the elderly and the ill, who would otherwise be vulnerable to the effect of risk selection, and would find the cost of health insurance unaffordable when it was needed the most.


So the PDs and FF in governement are trashed because they try to have a fair community scheme for all.

Yet if they didnt they would get lashed for neglecting the ill and the elderly.

You guys cant have it both ways

mickcarroll10

kizzyr wrote:

Applauds your point and agrees 100%. Bloody FF and bloody Mary Harney, God how I hate that woman. Not a hope that risk equalisation will apply to car insurance will it? :rolleyes: BUPA had approached VHI and together with VIVAS (who obviously know that they are the next target) offered to take all of the older more expensive clients from VHI at no expense to the client, no change in their cover etc etc as an alternative to paying out all that money. VHI, kind caring company that they are, with their clients health and welfare to the fore at all times, said no thanks we want the money. :mad: And what angers me most of all is that people are going to vote this shower of gangsters back in for another term and then wonder why they're being ripped off!!

How exactly are they ripping you off?

mickcarroll10

ejmaztec wrote:

Is this some other anti-monopoly (or otherwise) EU directive that the Irish Government is in breach of? The usual case of "We'll take the EU funds but we won't do anything to comply with agreements that we've signed"

Lets not let facts get in the way of a good moan

The need for risk equalisation to support community rating is supported by a number of international experts and organisations. The OECD has specifically endorsed the Irish scheme. The Irish scheme was also approved by the European Commission

Lemming

jimmycrackcorm wrote:

Given their lower customer age profile then I don't think that will make much ofa dent.

There's one thing that puzzles me here ..... BUPA have (had??) 22% market share. So that means that VHI have close to 80% market-share.

"Younger" people - and by "younger" I do put a very cynical parenthesis around that word because nobody has defined what that word means exactly in this case - do not constitute 22% or of this nations populace, or we would be truly f*cked economically.

So why aren't VHI still able to manage with a near monopoly as it stands? This issue goes beyond any smoke-screen arguments about who insures who, but on the efficiency (or lack there of) of the state-run medical industry.

Yes - it is an audited figure. Don't forget that that is the profit from a startup business not a mature business. Again I say - had Bupa created attractive policies to encourage older customers to join then they wouldn't have to worry about risk equalization. It would be naive to think that Bupa are thinking of anything other than profit otherwise knowing full well in advance of the implications of RE, they could have strategized for it in a way other than the quick buckway.

Ah ..... so offering lower policies isn't "attractive" enough anyway? As someone else pointed out, many older policy holders don't want to, or wont move, because they're "comfortable" where they are.

And Bupa would STILL have had to worry abotu risk equalisation since they control such a relatively small percentage of the market next to VHI who would then just claim that beceause they have MORE people they therefore demand "compensation"

MrPudding

mickcarroll10 wrote:

The need for risk equalisation to support community rating is supported by a number of international experts and organisations.

Much the same as it is also considered to ne ill advised by some economists.

MrP

kizzyr

mickcarroll10 wrote:

How exactly are they ripping you off?

The Governmnet? How aren't they? € 40.00 tax on my credit card, again on my laser card, an increase in health insurance premiums so the tax payer doesn't pay for the cost of their hospital care, what am I if not a tax payer? Take money for road tax yet we have a pathetic excuse for an infrastructure where by one car accident at 6.20am causes chaos for hours on end all over Leinster!, buy a "necessary" private government jet, get a new fleet of Mercs every single year at our expense, hefty pay rises apparently whenver they want it............the list goes on an on.

Ruu_Old

Some news from rte.ie, sorry if it has been posted already.

Enterprise, Trade & Employment Minister Micheál Martin has welcomed an announcement by health insurer BUPA that it is still willing to enter talks with the Government on its future in this country.

Minister Martin said he did not want to raise hopes, adding that there was an obligation on BUPA not to 'go for the nuclear option' but to explore all avenues to ensure that it continued operating in this country. He was speaking after a meeting BUPA representatives and employees in Fermoy in North Cork.

BUPA had earlier opened up the prospect that it might be willing to continue operating here five days after the company announced that it is to wind up its Irish operation. In a statement, BUPA said it was willing to discuss with Government any way that would allow it to remain in business.

Speaking on RTE radio, Anne Broekhaven, director of health services contracting at BUPA Ireland, said the company would consider any reasonable proposal from Government which would allow it to make a modest return and also to pay their statutory solvency requirements.

She said BUPA Ireland had fought hard to bring competition to the market and the company was willing to discuss any way in which it could stay here.

Lemming

Ruu wrote:

Some news from rte.ie, sorry if it has been posted already.

As welcome as the propsect that news might bring, I have to snort at Martin's "nuclear" remark. I would consider an inept government telling a company it must pay its rival (controlled by the government ... ho ho ho) over three times its fiscal earnings per year to be a very "nuclear option".

Meh ..... can't be arsed writing any more.

RainyDay

scuby wrote:

Bupa were still hiring people up until last week !! friend was telling me that a girl in fermoy handed in her notice at work last week, to join bupa .... and now has no job, surely they knew at that stage they were going to pull out of ireland.... thats that girl shafted !! and surely not the only one......
but i still don't think they will leave ireland...

In all fairness, BUPA had publically & repeatedly stated that they would pull out of the Irish market unless the risk equalisation rules were changed. Given that they lost the case a couple of weeks ago, it was foolhardy for her to hand in her notice. A few minutes of Googling them would have highlighted the risks.