Vhi Healthcare Pays Out €1 Billion Meeting Customers Medical Needs

June 17th, 2008 – The Board of Vhi Healthcare has approved the Annual Report and Accounts for the year ended 28th February 2008.  The Board is satisfied that good progress has been made in the past year with a number of significant milestones achieved in meeting its customer’s medical needs.

Summary of Financial Performance

• During the past year Vhi Healthcare earned premium income of €1,153m and paid out €1,005m to meet its customers' medical needs.

• The Accounts show a surplus of €55.4m which was generated from day to day operations compared to €33.9m a year ago.  This operating surplus equates to 4.9% of premium income. The total surplus for the year amounts to €112 .2 million (€69.5 million a year ago) and comprises two elements i.e. €55.4 million on day to day operations and the release of the unexpired risk reserve of €56.8 million.  

• The results also show that there was good progress in improving the financial strength of Vhi Healthcare with an increase in the solvency ratio from 28% to 35%, excluding potential Risk Equalisation receipts relating to 2006 and 2007 of €41.6m which would increase Vhi Healthcare's solvency levels to 38.7%.

• Operating cost ratio was just below 8% of premium income which makes Vhi Healthcare the most efficient operator in the Irish health insurance market and compares favourably with general insurers and international private health insurers.

Meeting our customers Medical Needs and Providing High Quality Healthcare  

During the year ended, Vhi Healthcare paid out over €1 billion to meet its 1.55 million customers high quality medical needs.  The pay-out ratio to premium income was 87% in the past year which is significantly higher than our competitors and during the past year Vhi customers availed of 535,000 medical procedures.

Vhi Healthcare paid out €165 million in terms of cancer treatment, €129 million for cardiac care, €111 million for orthopaedic care, €53 million in respect of psychiatric care and €49 million for treating respiratory problems.  Vhi contributed €41 million to the cost of delivering over 15,000 babies and over €37 million was paid out in respect of children's illnesses.

According to Jimmy Tolan, Chief Executive Vhi Healthcare “Vhi Healthcare is the only specialist health insurance company in the Irish market with over fifty years experience.  We are completely focused on ensuring that our customers can access high quality healthcare at the most affordable price in the most appropriate medical setting.  To achieve this we continuously negotiate the most favourable terms with all our medical providers.  We also continue to provide cover for the widest range of facilities and the latest drugs and technologies available on the market.”

He continued “Our focus has always been on the overall quality of patient care and our patient satisfaction survey clearly shows that standard of care and quality really matter to our customers.  During the year we announced that all new and existing private hospitals seeking cover from Vhi Healthcare would be required to achieve accreditation with one of the accreditation bodies by December 2008.”

Vhi Healthcare has made significant progress in meeting our customers' needs in other areas.  Over 350,000 Vhi customers have availed of MultiTrip travel insurance product, while 100,000 patients have obtained medical services from the Vhi Swiftcare Clinics and 38,000 customers are now insured under our dental care plan.  

Financial Regulator

The Minister for Health and Children, Mary Harney TD guided the Vhi Amendment Bill through the Oireachtas and into legislation in April 2008.  The Act stipulates that Vhi Healthcare should obtain an insurance licence and be regulated by the Financial Regulator with effect from 1st January 2009.  Vhi Healthcare is committed to achieving this objective and is in the process of filing an application with the Financial Regulator.

Community Rating and Risk Equalisation

Vhi Healthcare is pleased that the Court of First Instance in Luxembourg has upheld the principles of both Community Rating and Risk Equalisation and its ruling is consistent with the findings of the High Court. We are awaiting a decision from the Supreme Court in relation to the appeal by BUPA who are seeking to reverse the decision of the Government to introduce Risk Equalisation.  The current system continues to encourage selection of customers on the basis of risk and consequently we intend to pursue a more sophisticated and equitable Risk Equalisation scheme.

Outlook and Medium-Term Strategy

Looking forward and outlining the medium term strategy for Vhi Healthcare Mr Jimmy Tolan, Chief Executive, Vhi Healthcare said “We currently estimate that Vhi Healthcare will generate a surplus of €15m - €25m from continuing operations for ten months ended 31st December 2008 (pre-Risk Equalisation receipts).  This anticipated surplus is lower than last year as we expect that a greater number of our customers will avail of more medical services in recently completed new medical facilities.”

He continued “Over the next five years we will remain fully focused on ensuring that our customers can avail of the highest quality medical services at the lowest possible price in the most appropriate setting.  We will continue to develop innovative products that are relevant for our customers.  We also intend to utilise our medical expertise to develop and implement preventative strategies in the years ahead.  Post regulation we will have the opportunity to further diversify our products and also to broaden the geographic reach of our services. “

Press Team