If fairness and equality had anything to do with funding and access to our health services, then the sale of the VHI might be a fair and sensible thing to do.

Unshackling a commercial service – in this case, private health insurance – from the strictures of semi-state ownership seems like a good idea, especially as the VHI's position as 'the special one' not only gave it an unfair operational advantage, but also allowed it to build in unwieldy and inefficient work practices to the ultimate cost of the taxpayer.

And anyway, the EU says we have to do something: quite rightly the state can't be both regulator and vested interest in the health insurance market.

Why do so many fear that once the government's involvement is moved to arms-length and that, subject to regulation, the market is allowed to dictate prices and terms of insurance cover, they may be left either paying exorbitant health insurance fees, or without any cover at all?

Why? Because in this country, under our hybrid public-private health system, health and hospital insurance isn't a luxury, but a necessity. It buys peace of mind for subscribers, but is also a vital foundation stone that supports our health system in its present form. Dysfunctional and unfair that the three-way relationship between the VHI, government and the health system may be, it still manages to provide a relatively stable service which offers at least some protection for older, sicker people of modest means. Kick out one leg of the three-legged stool without replacing the supports and there is a fear the entire system could be destabilised.

Over 2.2 million people in this country have private health insurance and the VHI has by far the highest number of customers – 1.42 million, or 65% of the total market.

But with so many of those customers now aged over 70 or chronically ill, they're also big claimers. The VHI is losing money and, if it is to be sellable, will need a cash injection of €338m if it is to meet the reserves requirement set by the insurance regulator.

Were this just a decision about competitiveness in the private health insurance market, the sell-off would be judged on a purely commercial basis. But it's not and everybody knows it's not.

The VHI, historically, is an integral part of our health service. Half the population here has health cover, most of it pretty basic. That's a far, far higher percentage than in countries where there is a fully functioning national health service with access for all, regardless of ability to pay. In Britain, for example, about 13% of the population has private insurance because their private health insurance is what it says it is – private insurance for private healthcare.

Here, the 'Voluntary' Health Insurance company has for 60 years staunched the massive gaps in the underfunded public services and kept the middle classes from protesting too loudly about its defects because it gave them an affordable means to both access of services and a better standard of care. Government policy in the form of tax breaks for private health insurance has actively encouraged people to buy into the two-tier system.

The insurer had, and still has, a symbiotic relationship with the health service which is both malign and beneficial. The VHI is the classic dysfunctional enabler of its equally dysfunctional partner. Without it, the financially squeezed public health service (and particularly hospital services) would have collapsed under the weight of demand, and yet because of it, they have been allowed to carry on in their current, corrupted form.

Some reforms, such as the new consultants' contract and the single waiting list for appointments, have improved fairness. But in the end, just like the sell-off of the VHI, they are sticking-plaster solutions to tensions which, in the end, are pulling the system apart.

The semi-state insurance company is now being yanked from its special position embedded in the heart of every hospital in the country because it is illegal for it to stay there. That cannot be without major consequences for the health service. It would be foolish to believe that everything will carry on as before because it won't.

Fine Gael has some very interesting proposals for financing and accessing healthcare, based on the Dutch system of unified health insurance.

Its Fair Care policy, under which health insurance is mandatory for all but is subsidised by the state for those on low incomes, has predictably been dismissed by this government, wedded as Mary Harney is to private sector involvement in health.

It does, however, deserve closer scrutiny, if only because it offers a clear route to the dream of equal access to publicly-financed healthcare.