IT WAS always likely that BUPA would be the first to test the water after the EU's directive on non life insurance came into effect in July 1994.
The directive was aimed at opening up the Irish health insurance market, in which the VHI had hitherto enjoyed virtual monopoly, to competition from other EU countries.
However, the Government moved quickly to protect what it regarded as the socially desirable aspects of VHI policy. Most health insurance companies weigh their policies in favour of the young and healthy in order to minimise their risks. This can lead to elderly or ill people finding health insurance either too expensive or else denied them altogether just when they need it.
The "community rating" system operated by the VHI means that everyone pays the same for the same scheme, irrespective of age, sex or health status.
The Government specified that "community rating" should be an essential condition of any health insurer operating in Ireland in order to avoid the "cherry picking" of young clients.
As a result there was no rush of health insurers into Ireland. However, BUPA had already shown its interest in this State when it, with a number of consultants, opened the Blackrock Clinic, a private hospital offering state of the art medical procedures at premium prices.
The success of the Blackrock Clinic shows there is a market in Ireland for speedy access to some of the best specialists in the country, in an exclusive and pleasant environment, even if it costs more than private health care in one of the public or voluntary hospitals.
While BUPA Ireland's managing director, Mr Martin O'Rourke, acknowledges that the company does not much like community rating, it is prepared to accept it. "We will live within community rating," he told The Irish Times yesterday. "The question is what community?"
He pointed out that there is already some health insurance outside the VHI, notably that the Garda and ESB workers have their own health insurance schemes.
More than 60 per cent of BUPA's members in the UK join through company schemes. Packages aimed at employers may prove attractive if introduced into Ireland. However, yesterday neither Mr O'Rourke nor Ms Margaret Downes, chairman of BUPA Ireland, could say what products will be available.
The VHI has had many difficulties recently. Although it insures 35 per cent of the population, growing dissatisfaction has been expressed with increases in premiums, along with the growth in the amount payable before out patient costs are covered.
People requiring in patient care have long experienced the policy of "balance billing", where consultants who do not have agreements with the VHI charge the balance of their bill to the patient. Now the VHI is in dispute with the private and voluntary hospitals, and VHI members may find they are not fully covered for their stays in hospital either.
BUPA (originally the British United Provident Association) was set up in Britain in 1947 following the establishment of the National Health Service. It attracted that section of the population which wanted, and could pay for, private medicine, which in Britain today accounts for 12 per cent of the population. BUPA has 45 per cent of that market.
It is a provident, non profit making association, but one in excellent financial health, with an operating surplus last year of £99.2 million, just half of which came from trading. Its total reserves are £565.3 million, and it has a solvency ratio of 65 per cent, four times that required by EU regulations.