Government encourage and reward inefficiency - BUPA confirm they are pulling out

jd

Zynks wrote:

Guys, have a look at the letter from TCD that hmmm linked above. It says that the average age for BUPA subs is 38 and 44 for VHI. Considering the critical mass VHI has with over 3/4 of the market, this age difference should be neglibible, unless the incompetence in VHI is ingrained.

The problem arises as people reach the age of about 60 or so, when health costs rise sharply. The average doesn't really give the full story, we need to see the percentage of of various age ranges in each company's customer base.

bk

Here is what should be done. Break the VHI into three separate companies, each with an equal number of customers and with a fairly dispersed age profile. Privatise each part selling it to the likes of BUPA/VIVAS and don't allow them to ever re-merge.

That way there is no massive company with an inbuilt monopoly (like Eircom) and all companies have the same age profile, meaning equalisation is not required and allows for the companies to compete with each other for customers.

This is a bit like what the US did with breaking up AT&T into mini-bells.

bk

jd wrote:

The problem arises as people reach the age of about 60 or so, when health costs rise sharply. The average doesn't really give the full story, we need to see the percentage of of various age ranges in each company's customer base.

But we also need to see what plan each age group is on. There is a lot of evidence that as people get older, they tend to go on the more expensive private plans which are far more profitable for VHI. There is a lot of evidence that you have BUPA with lots of younger people on very cheap (low margin) package having to subside older people on very expensive plans at VHI.

jd

bk wrote:

But we also need to see what plan each age group is on. There is a lot of evidence that as people get older, they tend to go on the more expensive private plans which are far more profitable for VHI. There is a lot of evidence that you have BUPA with lots of younger people on very cheap (low margin) package having to subside older people on very expensive plans at VHI.

Some doubt here, Shoegirl thinks they (high end plans) are less profitable. Anyone have any figures on this?

jd

bk wrote:

Here is what should be done. Break the VHI into three separate companies, each with an equal number of customers and with a fairly dispersed age profile. Privatise each part selling it to the likes of BUPA/VIVAS and don't allow them to ever re-merge.

.

I suggested something similar on a previous thread.
http://www.boards.ie/vbulletin/showthread.php?t=2055020793

mike65

Older clients tend to be on more expensive plans C,D and E. In Australia the risk-eqalisation applies only to those over 65 I belive. Its treated like a seperate market. There are over 20 private health insurers in Oz.

Mike.

Sean Barrett . A fair use of stats as always.

oscarBravo

hmmm wrote:

Get back to me if you need any of the big words explained.

One more crack like that and you'll be getting some time off from this forum. Get back to me if you need the charter explained.

Time Magazine

Deleted User wrote:

Sean Barrett . A fair use of stats as always.

Just thinking the same thing myself . He was at Michael O'Leary's wedding, don't you know.

Zynks

Bottom line of the story. From having some choice, we are now down to 3 options for health care:

- Public services which need no introduction
- An expensive white elephant enjoying a monopolistic position and totally backed by people who say they promote competition (oh, and who is running also the one above) and
- A company that is small, but backed by the second richest man in the country who is not in this business for any other reason than profit and one of the most profitable banks in Europe

Ah, isn't it great, we got rid of the odd one that had decent prices and a not-for-profit approach...

Judt

Though we all agree here, I think it might be worth noting that most of us are not the elderly and infirm, for whose cover this was proposed. Personally I don't think that this is a good idea at all, but we are mostly singing to the choir here as well.

Government has created a huge mess of the health insurance market. An improvement would be for community rating to be abolished, and for the government to pay lump sums to those who experience higher premiums that they cannot afford. It would be a far more efficient system. What we have now is a system, which to outside observer, seems to be designed to let rich people skip the queue in public facilities.

constitutionus

Deleted User wrote:

Government has created a huge mess of the health insurance market. An improvement would be for community rating to be abolished, and for the government to pay lump sums to those who experience higher premiums that they cannot afford. It would be a far more efficient system. What we have now is a system, which to outside observer, seems to be designed to let rich people skip the queue in public facilities.

correct me if im wrong but isnt that what the medical card is meant to be for ?:D VHI have been prataling on about old people compleatly forgetting theyre entitiled to free health care over 65, methinks its just a fig leaf to get rid of the competition.

first smart telecom (and guess who got their 3g liscence) and now BUPA. tell me exactly where am i meant to shop around?

i'll be honest, my solution? allow anyone in the country to insure themselves with any heath care insurer across europe! we're meant to be a single market damnit. after 30yrs of the EU the least we should be able to do is insure our cars in germany and get health insurance in france. of course that would mean crushing the cartels in the financial and health sectors in this country, something our lads in the dail arent interested in :mad:

True, medical card does cover people to a large extent. General idea I was trying to get at is that Community Rating has better alternatives. It served the VHI's interests more than anyone else, as they didn't have to bother assessing each individual's risk. Good point on the pan european market too. Charlie McCreevy should be making more progress towards opening up markets in general and especially insurance.

CJhaughey

Deleted User wrote:

Sure they should have registered as a charity,that'swhere they went wrong.

No there is a difference between a charity and a Not-for-profit organisation, Canadas health system is largely private but run on not-for-profit lines.
Where BUPA went wrong was entering a market which had a useless shower of corrupt incompetants in govt.
I think that the EU will have a look at this and just shake their heads in disgust and walk away laughing.

Captain Trips

hmmm wrote:

hah! an easy answer, you've obviously never dealt with the VHI.



From "Risk Equalisation and Competition in the Irish health insurance market" from TCD.

Get back to me if you need any of the big words explained.

Averages are not "properly" statistical though, and misrepresent the reality, IMHO. We need Medians and all that standard deviation stuff.:)

I do not either use VHI or work for them, but I would not like a cut throat mercenary attitude available to health insurance companies, which BUPA has clearly displayed, and is akin to models in the US.

The alternatives to risk equalisation would be VHI upping insurance to whatever it is to pay for expensive care for older people, with much longer durations of stay in hospital compared to younger.

"Average" age comparisons are utterly meaningless.

WOuld a suitable comparison be in car insurance? It's not about "biggest" in subscriber numbers, like someone mentioned regarding Quinn Direct, but if one company had the vast majority of young drivers, and the other companies had a new market of previously uninsured safe and experienced drivers. Those new companies would likely have far less claims (if we are to believe the hype around young drivers being inexperienced, that is a different matter).

A true "open market" would mean paying the $10,000/year family premiums so enjoyed by many American families in the current free/open/we-love-competition market.

Competition is for businesses and governments to deal with. As a citizen, you should only be concerned with paying the least possible for the best possible quality (IMHO!) - and if BUPA see to wish to profit elsewhere, as an obviously truly mercenary company would, then let them.

Has it meant your quality of insurance care/cover has worsened? Have your costs increased? Have those costs been in line with international norms - if it's all good, then you won't notice a thing.

I do not want a system where our parents/seniors/ourselves-in-30-years have to work in Tesco to pay for health insurance or prescription drugs - that is what a free market does and it is not very pleasant. NY Times has many stories on these problems.

LostinBlanch

constitutionus wrote:

first smart telecom (and guess who got their 3g liscence) and now BUPA. tell me exactly where am i meant to shop around?

You're definitely singing to the choir here.

constitutionus wrote:

i'll be honest, my solution? allow anyone in the country to insure themselves with any heath care insurer across europe! we're meant to be a single market damnit. after 30yrs of the EU the least we should be able to do is insure our cars in germany and get health insurance in france. of course that would mean crushing the cartels in the financial and health sectors in this country, something our lads in the dail arent interested in :mad:

Well I know of someone who was pulled up a couple of years ago for not showing their insurance disk. He was insured with a Dutch insurance co and was covered for travel throughout the EU and ahd a photocopy of the premium in place of the disk. Mind you he was a Dutch resident when he bought the insurance. Anyway he was brought to court, but they had a special sitting 30 minutes before the court was officially in session and he got off as he was insured and had shown proof of insurance.

bk

Captain Trips wrote:

I do not want a system where our parents/seniors/ourselves-in-30-years have to work in Tesco to pay for health insurance or prescription drugs - that is what a free market does and it is not very pleasant. NY Times has many stories on these problems.

And what is wrong with my suggestion of breaking the VHI into three separate companies of equal no and type of customers and then selling each to different private companies.

Then you have everyone starting off on a level playing field and no need for risk equalisation.

Time Magazine

Competition Authority to call for break up of VHI.

Maybe it's all a masterplan by Harney to rid us of the monster?

:rolleyes:

layke

That would suggest there's some sort of intelligent thought behind this. But in all honesty too little too late.

On another note, I just got quoted €642.02 from VHI (I am a 25 year old non smoker). That's nearly €200 more expensive then Bupa's last quote. I will not be paying this. I'd rather buy foreign health insurance and hop country if something goes wrong. Prolly cheaper too.

layke

Oooh.

Seems as though Ireland may be facing penalties from Europe over this.
Only time our Gov will sit up and pay attention though, when they get hit in the wallet.

Mr McCreevy pointed out that VHI operated in the Irish market under conditions that were 'very different' from those that applied to its competitors and that the Commission had been 'repeatedly contacted by other market operators'. Mr McCreevy said these companies had expressed strong concerns about 'this lack of a level playing field'.

http://www.rte.ie/business/2006/1214/bupa2.html

oscarBravo

Captain Trips wrote:

I do not either use VHI or work for them, but I would not like a cut throat mercenary attitude available to health insurance companies, which BUPA has clearly displayed, and is akin to models in the US.

Can you give an example of how BUPA has clearly displayed a cut-throat mercenary attitude?

bk

Ibid wrote:

Competition Authority to call for break up of VHI.

And I bet these guys got paid a fortune for what I came up with in 5 minutes.

jjbrien

bk wrote:

Here is what should be done. Break the VHI into three separate companies, each with an equal number of customers and with a fairly dispersed age profile. Privatise each part selling it to the likes of BUPA/VIVAS and don't allow them to ever re-merge.

That way there is no massive company with an inbuilt monopoly (like Eircom) and all companies have the same age profile, meaning equalisation is not required and allows for the companies to compete with each other for customers.

This is a bit like what the US did with breaking up AT&T into mini-bells.

i think mary harney must have been reading our tread as thats what she came up with at 9pm last night.

jjbrien

Deleted User wrote:

Sure they should have registered as a charity,that'swhere they went wrong.

Anyway, the lesson to be learned is, put FF back in as a single party government with an overall majority...

I think now this will start the downfall of the current govement. This happened on Betie's watch and he is the chief he could have stopped harney on this one but he didnt. FG are against this.

Solair

From the World Economic Forum Report the BBC used:
We're not doing too badly!

Quote:

Ireland, ranked just outside the top 10at 11th,has one of the three best enterprise environments in
Europe due to the ease of starting a business in the country, good access to capital (through channels
such as banks and venture capital) and relatively low levels of administrative red tape.

Lemming

layke wrote:

Oooh.

Seems as though Ireland may be facing penalties from Europe over this.
Only time our Gov will sit up and pay attention though, when they get hit in the wallet.

I will gladly watch and cheer if/when the current bunch of inept f*ckwits get screwed long, hard and deep up the @ss without lubrication by the EU over this.

For the record, I am a VHI subscriber although now I cannot shop around, nor can I do anything except hope that VHI don't go mental with their prices since we now effectively have a situation where you either pay VHI what they _want_ or else you throw yourself and any dependents at the mercy of the public system

Incidentally, reading the article linked by layke, I have to chuckle as McCreevy appears to be taking his revenge on Bertie for shafting him to stay in power. And it would appear McCreevy is taking his revenge served very, very, very cold. Whilst what he's doing is absolutely right, some of the apparent communications between himself and the government suggest that he's playing a rather good game of brinksmanship

metrovelvet

Does the EU/EEC endorse protectionism?

Lemming

metrovelvet wrote:

Does the EU/EEC endorse protectionism?

Not giving a qualified answer, but I don't think so. The fact that McCreevy is waving a rather large stick in the direction of the current inept muppets in government here would suggest that they don't and will step in with a large stick if the government doesn't get its house in order.

mike65

McCreevys remit is to open up services competition so its his duty to push for reform and hit the government hard as he can. All while being a good European!

Mike.