| 9.4°C Dublin

VHI chief Tolan quits in clash over Reilly's plans

Jimmy Tolan is stepping down as head of the VHI. Sasko Lazarov

VHI chief executive Jimmy Tolan is stepping down after a high-profile spat with Health Minister James Reilly over the minister's controversial plans to split up the company.

"Irreconcilable differences" have arisen between the two men, senior sources told the Irish Independent yesterday.

It is understood that Mr Reilly and Mr Tolan have clashed at several meetings over the minister's plans.

As recently as last month, Mr Tolan publicly attacked Mr Reilly's intention to split the company into various parts. "We believe that a break-up of VHI Healthcare would increase healthcare costs for our customers,'' said Mr Tolan, when announcing the company's results.

The VHI said Mr Tolan would not be receiving any severance or "termination" payments as part of his departure. He earned more than €412,000 a year.

It is understood Mr Tolan had no issue with Mr Reilly's plan to introduce Dutch-style universal healthcare to Ireland, but fundamentally opposed the idea of breaking up the VHI.

It is understood he told the minister that such a move would slash the buying power of VHI and make it even more difficult to negotiate with hospitals.

The last government planned to privatise VHI in its entirety, a position Mr Tolan did not oppose, but Mr Reilly has ditched this plan and wants to keep VHI in the state sector, albeit in a split form.

The minister conceded yesterday that differences had arisen between himself and Mr Tolan.

"It might be fair to say that he might have had issues with some of the options (for the VHI) under consideration. "And he has made his decision and I utterly respect that," Mr Reilly said.

The minister -- who was asked about the resignation after addressing the Irish Nurses and Midwives Organisation AGM in Kilkenny -- said he had meetings with Mr Tolan about the future of the VHI.

"I would like to place on record my gratitude to him. He's in the job two years and in that time he has made some considerable progress in relation to controlling and changing the way the VHI provides care," Mr Reilly said.

"There have been some good innovations around the care plan, which I thought was a very successful means of providing care to patients."

Mr Reilly confirmed the Department of Health had commissioned a review of the VHI to find out how best it might be handled in the future. It will look at how it will fit into his plans for compulsory universal health insurance.

"Goodbody's are undertaking that and they have all options open to them. On that basis, I don't want to say any more other we are focused on implementing government policy.

"I continue to be focused and determined to fulfill the mandate the Irish people have given this Government," he said.

Irish Independent