MR DERRY HUSSEY faces an uphill battle in his new role as chairman of the VHI. It is an insurance company trying to find its way out of major financial difficulties, its first competitor - Britain's leading private health insurer - is on the market, and it has a chief executive whose appointment is only temporary.
He has entered a market where things are changing rapidly and, for the first time, consumers are being offered a choice about what product they want to purchase.
According to VHI sources, Mr Hussey, a chartered accountant, who has been non-executive director of the Jones Group since 1993, was not the first person approached for the job. A number of others were considered apparently, including the chief executive of a multinational company.
The Minister for Health, Mr Noonan, said yesterday the new chairman was a talented person with the time to devote to the VHI. However, when questioned, he said bringing the insurance company out of its difficulties would "be a very difficult task for one person".
The company's most recent problem has been the arrival of BUPA. VHI was seen to win the battle over community rating, but in the long term it faces a company with huge resources to spend on attracting new clients and working out deals with private hospitals and consultants.
There is no sign so far of any new products, particularly those to attract younger subscribers, and subscribers are angry at successive price increases.
VHI currently makes money on its basic A plan and sometimes on its most popular B plan, but loses out on the upmarket D and E plans.
Mr Hussey joins a chief executive who is one month in the job. Mr Aidan Walsh is on secondment from Price Waterhouse for a further five months. The previous chairman, Mr Noel Hanlon, who steps down on Friday, while not without his critics was a man who got things done.
Relations are strained between the board of the company and the Department of Health. Mr Noonan told the board recently it may have to be "cut loose" from the Department if it is to develop in the future, but some Department officials see the company as ban arm of Government social policy".
The way forward is for the company to enter into a strategic alliance with one other major international partner, according to the Minister. He said yesterday there had been inquiries but they would remain confidential.
Volume is a major issue facing the VHI. To give but a few examples the Blackrock Clinic is building an extra floor; the Mater Hospital wants to expand its out-patient department and build more facilities for cardiac procedures. There is a huge increase in the number of expensive procedures being claimed for.
The company is in dispute with consultants over payment for procedures. Consultants are threatening to balance-bill patients.
The public healthcare system is expanding and public hospitals are anxious to increase their private beds to bring in more income.
There is no way, according to company sources, that the VHI subscriptions income can keep pace with "hospitals doing more and more and all the doctors coming on stream."