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VHI plan will make no difference says BUPA
Conor Brophy



BUPA will leave Ireland even if the VHI is broken up, Bupa Ireland chief executive Martin O'Rourke told the Sunday Tribune, arguing the plan would do little to promote competition.

"From our point of view if we were paying four semi-state bodies rather than one the fundamental problem of disproportionality remains, " he said.

Oliver Tattan, chief executive of Vivas Health, agreed, calling the breakup proposal "a red herring".

Even as it leaves, Bupa will still have to pay 58m in risk equalisation payments before it exits the market at the end of 2008, pushing it into the red, O'Rourke said. Bupa's UK parent will make up the shortfall, he added.

At least some of the 300 jobs at Bupa's call centre in Fermoy, Co Cork could be saved, however, under a plan to use the Fermoy centre to serve Bupa customers in other countries. "That's one possibility. We're going to look at all possibilities, " O'Rourke said.

Bupa would be liable to pay 161m to the VHI over the next three years under the controversial risk equalisation system to subsidise the semi-state's older, more expensive customers, which the company blames for its decision to exit the Irish market, wiping out a projected 64m profit.

Vivas' Oliver Tattan reaffirmed the company's commitment to the Irish market and rejected any suggestion that Vivas will exit the market when it becomes liable for risk equalisation payments next October.

"Our business plan always included this. We don't like the regime. We don't agree with it but we are committed to the market, " he said.

Tattan said Vivas remained confident, however, that the government will have to find an alternative to risk equalisation. "We always made this investment decision on the basis that government would have to do something to make this market attractive to competitors. That's the bet."




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