THE VHI is to seek negotiations with individual private hospitals on agreements for insurance cover. This follows the failure of talks between the Voluntary Health Insurance Board and the hospitals' representative organisation, the Independent Hospital Association of Ireland.
Announcing the decision the VHI chief executive, Mr Brian Duncan, said: "VHI regrets that discussions with the IHAI have failed to produce an agreement. However, there is no way that VHI is willing to meet the IHAI's demands, as to do so would not be in our members' interests and can only lead to an unacceptable increase in premiums."
VHI operates a budget system for private hospitals based on past and anticipated trends. Mr Duncan said: "This is essential as it provides hospitals with, an incentive to manage their cost base."
However, the chief executive of the IHAI, Mr Michael Heavey, said: "The VHI has calculated that hospital costs will increase by 3.5 per cent in 1996. All that IHAI members are seeking is for the VHI's own figures to be applied to each hospital. The VHI offer does not do that.
"Modern medical technology is advancing at an astonishing rate, bringing significant advances in patient care. It is unreasonable of the VHI to expect us to fund such expensive developments from a constantly decreasing - in real, terms - level of remuneration."
Referring to VHI's intention to approach private hospitals individually, a spokesman for the IHAI added: "They'll find that the hospitals will stick to the association."