Tolan switches sides in more ways than one

FORMER VHI chief executive Jimmy Tolan did more than just change jobs when he joined PricewaterhouseCoopers earlier this year – he has also had to switch sides on at least one thorny issue.

Tolan left the State-owned health insurer last year following a disagreement with Minister for Health James Reilly over the future of the business.

In February it emerged that PricewaterhouseCoopers had hired him to head up its health advisory practice. The move has resulted in Tolan finding himself on the other side of a debate in which he would have been involved in his former role at the VHI.

The PricewaterhouseCoopers division of which he is now head recently produced a report on the level of private healthcare services in Cork, which found that the region needs another 109 private hospital beds.

While he was chief executive of the VHI, the insurer refused cover to the Cork Medical Centre, a 75-bed private hospital originally backed by Sheehan Medical, on the grounds that the region was adequately served by private hospital beds.

The decision was blamed for the facility’s closure last year. The Mater Private has since agreed to operate the hospital, but the soundings are that it is unlikely to re-open unless the VHI changes its mind.

The logic of this is that while there are a number of players in the market, VHI’s dominance is such that if it refuses cover to a hospital, it rules out a large chunk of its potential market.

PricewaterhouseCoopers said yesterday that Tolan had no input into the actual report, and the work predated his arrival at its health advisory practice.

Nonetheless, his new role means that he is head of a division that has produced a report contradicting what his position would have been in his old job.

To be fair, Tolan is not the first executive to switch from the public to the private sector and find himself on the opposite side of some debate or other as a result.

But it will be interesting to see if his old employer decides to change its tune on the Cork Medical Centre.