Health Contributions Bill, 1978: Second Stage.

I move: "That the Bill be now read a Second Time."

When I moved the Second Reading of the Health Contributions (Amendment) Bill, 1978, in the House last March, I mentioned that it was the Government's intention to replace the present flat-rate social insurance and health contributions by a pay-related scheme of contributions and indicated that it was proposed to commence the new scheme in April 1979. The Social Welfare (Amendment) Act, 1978, provided for the conversion of the existing flat-rate and pay-related social insurance contributions and flat-rate occupational injuries contributions into fully pay-related contributions and the arrangements for this conversion are now proceeding. In speaking on the Second Stage of this Bill on 7 November 1978, I outlined the advantages of the pay-related system of contributions over the present arrangements for social welfare benefits. The main advantage in the change lies in departing from a regressive system, as the scheme of flat-rate contributions is, to a system where contributions are related to income. This, of course, benefits the lowly paid. I also mentioned the greater convenience and security in collection of contributions under the new scheme.

The Bill now before the House proposes similar changes in the scheme of health contributions which has been a feature of the financing of our health services since 1971. The case for changing to income-related health contributions is much the same as on the social welfare side and I need not repeat all the arguments for this case in detail.

Under the present Act, health contributions are paid by persons who have limited eligibility for health services, with some specified exemptions. These are, broadly speaking, persons who have not medical cards and who come within the income and valuation limits specified under the Health Act, 1970. Under the Bill now before the House, liability for the payment of health contributions will extend to all individuals over 16 years of age who have an income. Again, there will be some exceptions from this to which I will refer later. This decision that health contributions should be paid by all income-earners is a necessary corollary of the Government decision to extend entitlement to certain health services—in particular hospital services—to the entire population. Clearly, if there is a major extension of services to cover all, then such entitlement must carry a liability to pay health contributions. I will shortly be bringing before the House a draft of regulations to allow for this extension of eligibility for services.

Broadly, the new arrangements will offer free hospital services at public ward level to the entire population, with the reservation that, those with incomes above the "ceiling" for paying health contributions, which I will refer to later, will pay consultants' fees. Similar arrangements will be made for out-patient services and the drug refund scheme will also be extended to cover all who have not got medical cards. In designing this change, I am aiming to bring much greater simplicity and equity into our definitions of eligibility to the services. Coupled with improvements in the schemes offered by the Voluntary Health Insurance Board, the new arrangements will ensure that no one will be denied hospital care through inadequacy of means and that each will be able to make a reasonable choice between public and private care.

The exemptions from liability to pay health contributions to which I have referred are set out in section 11 of the Bill. The specific exemptions for pensioners and others provided for in section 11 (2) are identical with those listed in section 5 (6) of the Social Welfare (Amendment) Act, 1978. Persons with full eligibility for health services will also be exempted from liability to pay health contributions, but the existing liability of the employers of such persons for the payment of health contributions in respect of them will be continued. This employers' liability will also extend to persons with agricultural employees and female domestics in private employment. In effect, this means that in accordance with the present practice the employer will pay the appropriate health contribution in the first instance but he will not deduct the amount paid when the employee provides evidence that he is entitled to a current medical card. An exemption to the general rule is provided for in section 11 (1) (a) under which a health contribution will not be payable by the employer of a medical card holder who is also in receipt of a widow's pension or other like payment as listed in section 11 (2) of the Bill.

In common with other developed and developing countries we have been experiencing very considerable increases in the cost of providing health services. I have stressed on many occassions that, taking the longer view, a considerable impact can be made on the level of demand for services if people can be persuaded to adopt a healthier life style.

Continuing attention will be devoted to the fields of health education and prevention, but it will take time before we will experience concrete results in the containment of the growth of health expenditure.

The question of health care costs was discussed at length at a meeting of Ministers of the EEC countries last November. It was clear that none of the countries represented at the meeting has found a simple formula for cost containment and that further cost increases cannot easily be avoided. Common factors emerged to which a major proportion of the overall cost increases can be attributed, such as the pay and price inflation which has taken place in recent years and improved conditions of service for health staffs. Health services are labour intensive and are extremely sensitive to developments in pay levels. Advances in medical technology involving increased sophistication of services and staffing have also had a significant influence on overall cost. Public demands are being constantly made for extensions in the cover, scale and standards of services and the take-up rate for services is increasing all the time. The inevitable result of all the pressures which I have mentioned is additional cost. There has also been a considerable increase in the welfare dimension of the health services such as in the payment of allowances to certain disadvantaged groups of the population and in the extension of child care and community care services.

In the context of the growing expenditure on health services which has resulted from Government policies there has been a growth in the rates of the present health contributions. When introduced in 1971 the flat-rate was £7 a year, or 15 pence per week, and it is now £24 per year or 50 pence per week. The amount which these contributions subscribe by way of appropriations-in-aid to the Health Vote is by no means insignificant as far as the Exchequer is concerned but it meets less than 5 per cent of the total cost of the services.

The Exchequer contribution in 1979 towards the cost of non-capital services, as provided for in the Book of Estimates, is about £419 millions which is about £79 millions more than was provided for in the Estimates for 1978. This represents about 93 per cent of the total estimated net cost of services in 1979. The estimated income from health contributions in 1979, including the additional yield from income-related contributions commencing in April, is £26.6 millions or about £10 millions in all more than in 1978. The estimated total yield from health contributions in 1979 represents about 6 per cent of the estimated total net cost of the services in 1979. This year, despite the competing claims of other public services, about one-fifth of current expenditure goes to the health services. This compares with about one-tenth in 1971. It is not unreasonable in all the circumstances that the amount to be found by way of health contributions should be increased, especially since most people will agree that not only should the level of services be maintained but that, in addition, there should be provision for development.

The Bill provides that the rate of contributions will be 1 per cent of income and that the "ceiling" for the calculation of contributions will be £5,000, which is of course the same as for the new scheme of pay-related social welfare contributions. As for social welfare this ceiling is to be confirmed or varied before the scheme commences. These matters are dealt with in sections 5 to 9 of the Bill.

The present flat-rate contribution, as I have said, is £24 a year. It would probably have been necessary, as has been customary, to increase the flat-rate of contribution in April 1979 to offset cost increases in the health services due to the impact of inflation and the extra costs arising from the commissioning of new units of accommodation and other developments in hospital services. If the increase in the flat-rate contribution were to be of the same order as last year then the new annual level from April 1979 would be £32. Thus, under the income-related scheme as proposed, persons whose income would be less than £3,200 per annum will pay less in contributions in 1979 under the Bill now before the House than they would have if the existing flat-rate had been increased to £32. Persons over that level will of course pay more.

Section 9 also provides for the variation of the contribution rate and the ceiling from time to time after the scheme comes into operation. It is intended that the ceiling will be varied from time to time in line with the income ceiling for social insurance contributions purposes, taking into account the latest information available regarding the average earnings of workers in the transportable goods industries. Any change would have effect from the beginning of an income tax year subsequent to the year in which a variation is made by way of regulations approved by the House. It is very desirable that the ceiling should be the same for both health contributions and social insurance and redundancy contributions. It could involve serious collection problems and might result in some disruption of the administration of the social insurance system if it were to be otherwise.

The collection system for health contributions is being designed to mesh in fully with the system for the collection of social insurance contributions and the PAYE system. This will facilitate the proper functioning of the collection machinery. This involves the classifying of the population into three specific groupings for collection purposes, namely:

—individuals who are liable for income tax under the PAYE system and who are insured under the Social Welfare Acts;

—individuals liable for income tax under the PAYE system who are not insured under the Social Welfare Acts;

—individuals with income which does not fall within the categories mentioned such as farmers, the self-employed, persons with investment income and so on.

When I was dealing with the Social Welfare (Amendment) Bill, 1978, I explained that in the case of employees the new pay-related social insurance contributions would be collected through the PAYE system for tax collection. This meant that the arrangements for the collection of these contributions would need to conform as closely as possible with the PAYE system and not conflict with the tax collection function. It is necessary that the collection arrangements in the case of health contributions payable by employees, which are at present collected through the social insurance stamp, should follow the lines of the arrangements made in relation to the social insurance contributions. Some of the advantages that flow from the close linking-up of the collection arrangements for the different contributions are that the collection of health contributions in association with social insurance contributions does not impose any additional work of consequence on employers and it simplifies administrative procedures that would otherwise flow from having to implement two different collection arrangements. There certainly would be no justification for establishing two separate systems for the collection of social insurance and health contributions based on a similar income-related base.

Similar considerations apply in relation to the application of the new health contribution arrangements to persons who are not insured under the Social Welfare Acts but who have income which is liable for income tax under the PAYE system. These are mainly occupational pensioners and proprietory directors who are in receipt of fees. These persons pay their income tax through the PAYE system and will have their health contributions collected in this way. The Revenue Commissioners will also collect health contributions from the self-employed and certain farmers who derive part of their income from professions or trades. The collection of income-related health contributions renders it necessary to have as comprehensive information as is possible in relation to such income. The income tax machinery offers the only practical method by which the proposed income-related health contributions could be collected and the Bill provides accordingly.

The regulations to be made under the Bill will provide that the obligation to collect health contributions from farmers will remain with health boards, except in the case of farmers with other trades or professions. In the latter cases the Revenue Commissioners will collect the health contributions in conjunction with the collection of income tax.

The Act of 1971 provides that in the case of farmers generally, the contributions would be related to the rateable valuation of the farms, from which their income is derived. The most readily available, practical solution for the purposes of assessing the liability of the farmers for health contributions is to have a notional assessment of income using a suitable multiplier for each £1 of rateable valuation. I should mention, however, that farmers will also be required to declare other sources of income, such as from investments, or from conacre, or from other employment and so on. It is on the basis of total income from all sources that their liability for the payment of health contributions will be assessed, subject of course to the upper contribution limit of £50 in relation to any particular contribution year.

I have explained to the House the general scope and intent of the Bill and the general arrangements which will be made for the collection of health contributions, but, of course, if Deputies wish for further information on points which I may not have mentioned or which are not covered in the explanatory memorandum, I will be glad to deal with these in my reply.

I commend the Bill for Second Reading.

Over the years it has been the policy of this party to press for a comprehensive hospital insurance scheme based on a nationwide concept of providing hospital cover through an insurance scheme. This Bill goes a fair distance along the road towards achieving that objective and, in so far as it does that, I welcome it but a few things need to be made clear about it. The Bill does not provide free hospitalisation for all, nor does it provide a comprehensive health service. Amongst the many attributes of one type or another that the Minister possesses is an adroit skill in being able to persuade the media to portray the image which he wishes portrayed. Sometimes that is a little rosier than the actuality of the situation. During the summer the main details of the Bill were announced by the Minister at a press conference and, subsequently, were outlined to the general public. One newspaper used a headline, "Hospitals Free To All" while another stated, "Free Hospitalisation For All; Part Of New Welfare Scheme". This is not a free hospitalisation scheme and I do not think it should be. It is an extension of the insurance scheme to provide hospital cover for a greater section of the population, something which we have been looking for over the years. That is to be welcomed.

The Minister said he envisaged that the scheme would be self-financing. I do not object to that. The whole concept of any insurance scheme should be to have it self-financing. However, I must query whether this scheme will be self-financing or whether it will result in a surplus or deficit in its operation. I understand that the amount obtained through the limited insurance scheme which is in operation at present was in the region of £16 million and the Minister envisages a total collection from insured persons in 1979 of £26 million. That is a large scaling down on the figure he announced last summer when he suggested then that there would be a take of £30 million as a result of the introduction of the scheme.

It will not be a full year this year.

If the Minister checks he will see that he was reported as suggesting that during 1979 there would be a take of £30 million. The situation still is, and it is important that this should be pointed out, that as a result of the introduction of this scheme, certain categories will be paying more than they do at present in return for the same services; certain categories will be paying more in return for less cover than they have at present; certain categories will be brought within cover who do not have it at the moment and a very small number will pay less in return for the same services they enjoy at present.

Broadly speaking the population can be divided into three categories. For those in receipt of medical cards, under 40 per cent of the population, there will be no change. At present insured people pay 50p a week, or £26 a year, and in return they receive hospitalisation free at point of user. That situation will be changed. All insured people earning less than £5,000 a year will pay 1 per cent of their income. It is very simple to do that sum. If £26 is translated into 1 per cent it means that all people at present insured and earning more than £2,600 a year will be paying more for the same services they enjoy at the moment. That relates to all manual and non-manual workers earning between £2,600 and £5,000 a year. It also relates to farmers in the band of between approximately £30 and £60 valuation. At present they pay £24 a year and under the new scheme they will be paying more than they do at present, depending on the size of their valuation, without any improvement in the level of services.

The people who will benefit, and it is high time they benefited, are the non-manual workers who earn between £3,000 and £5,000. They were not included in the insurance scheme and resented the fact that their manual equivalent was. This party have repeatedly asked that non-manual income earners should be included in the hospitalisation insurance scheme and I am glad to see the scheme is to be extended to cover them. In relation to those earning over £5,000 a year, the non-manual worker will be covered—in almost every case this will be cover for the first time—to a limited degree. Farmers with a valuation of over £60 will also be covered for the first time to a limited degree. Manual workers earning in excess of £5,000 a year have a right to feel aggrieved by the introduction of this scheme because they will experience a real drop in the level of services which they enjoy at present. They will be asked to pay almost twice as much as they do at present for the privilege of less cover. A manual worker earning over £5,000 is at present covered for all hospital services. In return he pays 50p a week or £26 a year. From the time this scheme is introduced he will pay 1 per cent of his income up to £5,000, in other words, £50 a year, almost twice what he is paying now, but he will find he is no longer eligible for consultants' fees and maternity services, for which at present he has insurance cover. Perhaps the Minister will correct me if I am wrong about that because some of the less palatable aspects of this scheme did not receive much attention from him at his press conference.

From next April the skilled manual worker earning in excess of £5,000 will no longer be covered for maternity services or consultants' fees. He will have to insure with the VHI for that aspect of hospitalisation. In return for the privilege of losing that cover he will be asked to pay twice as much as he does at present. That is a very regressive aspect of the scheme and we as a party are very disappointed with it. We are particularly disappointed that the Minister should have decided to pitch the upper ceiling at that level and to discriminate against the highly paid manual worker.

If we are serious about encouraging industry, particularly the highly skilled technological industries which the IDA appear to be seeking to bring into the country, there is a need to have highly skilled trained workers to staff that industry and attract foreign investors. We have to be able to persuade them that we have a highly skilled manual workforce. Yet the Minister is suggesting that these people will have to pay double the amount they pay at present under a hospital insurance scheme which will give them less service and less benefit than they have at present. It is hardly to be expected that these people will welcome such a change.

There is also to some extent a rather illusory notion about the amount of improvement in real terms that will accrue to people who are not within the State's insurance scheme at present but who will be brought in as a result of this Bill. Let us take the example of a husband, wife and two children. At the moment all the benefits which the Minister proposes to make available to them under the State insurance scheme would be covered by the Voluntary Health Insurance Board for a gross premium of £117. Assuming the standard rate of income tax—before tomorrow—is 35 per cent, by claiming the VHI contribution as a tax deductible allowance, they would be £59 in benefit, and the net cost for that family is £76. Under the Minister's proposed scheme they will have to pay £50 into the State fund. They will also have to take out VHI to cover maternity benefit, if the Voluntary Health Insurance Board will provide that cover—which is less than clear—and they will also have to cover themselves with the VHI for consultants' fees and possibly other services.

What has not been clear from the Bill so far—perhaps the Minister will clarify this, although I think I know the answer—is whether the £50 contribution which everybody will be obliged to pay from now on will be a charge allowable against person's earnings in the same way as the VHI contribution is a charge allowable against tax. I do not see any great benefit to certain people in the middle income category with an average size family if they have to pay £50, which they cannot charge against tax, and also pay a contribution to the VHI for the areas of comprehensive hospital coverage which the Minister is excluding from them. They will be no better off than they are by paying their gross VHI premium at present less the tax allowance which they are given at the standard rate.

Let us look at another example. A husband and wife with no children at the moment are covered by the VHI for a sum of £59.20 after tax allowance. The Minister is suggesting that they pay £50 and pay a cover, which has yet to be assessed by the VHI, which I am sure will be more than £9.20. That family under the Bill will find themselves paying substantially more through having been brought into the State net. A single person at that level of earning will find that it costs him a sizeable amount extra to insure himself for comprehensive cover through the combination of State insurance and VHI.

I have referred already to the real losers, the manual workers who are earning in excess of £5,000, who will get less service and pay twice the amount. There are varying figures for the number involved in this. I tried to get the exact figure from the Minister's Department but nobody was either able or willing to give it to me. There appears to be, according to some assessments which I have seen, about 25,000 manual workers and their dependants earning in excess of £5,000 a year who will now find themselves worse off as a result of the introduction of this service.

The Minister must be aware of the serious reservations expressed by the Irish Congress of Trade Unions in regard to the limited nature of this hospital insurance cover. They feel that the ceiling of £5,000 is at far too low a level. They have objected strenuously to the removal of certain areas of benefit from the manual worker earning in excess of £5,000 a year. Those limited benefits will be the only benefits available to the non-manual worker earning over £5,000 a year or the farmer with a valuation of over £60 who for the first time will be brought into the State insurance scheme. Those people will also have to pay £50 a year but they will find they will have to pay afterwards for consultants' fees and maternity costs. Those people will have to go to some private agency to obtain that cover.

The Minister may tell us that he has made certain arrangements with the VHI to bring those manual workers into the VHI without the usual waiting period or the usual exemptions in regard to certain types of illness. An attractive scheme could then be offered to manual workers earning over £5,000. It is very important that the Minister should tell us if the non-manual worker and the farmer with over £60 valuation will be able to avail of this new offer the VHI will make for the first time to the higher paid manual worker. Can the non-manual worker and the farmer with over £60 valuation go to the VHI and say: "I have to pay the State £50 a year but I am not covered for maternity services or consultancy fees; may I obtain from you the same type of insurance cover as you are offering to the manual worker?" As far as I know, such an offer is not being made by the VHI. The Minister should make that crystal clear when he is replying.

We are talking about approximately 15 per cent of the population when we talk about the people earning over £5,000 a year. It appears that those people will still have to go to the VHI or some other insuring agency in order to get through the State and other sources a comprehensive hospital insurance cover. The State should provide a fully comprehensive hospital insurance cover for all sections of the community. People at all wage bands and all income levels should be able to avail of such a cover to the same degree, no matter what they are earning. People earning over £5,000 a year will not be able to avail of this cover under the Bill to the same degree as people earning less than that figure.

One good aspect of this scheme is that it removes the dreadful anomaly which exists between manual and non-manual workers. However, it is replaced with another equally objectionable anomaly. Up to this a manual worker earning over £3,000 a year was not covered and a manual worker earning less than £3,000 was covered. Under this scheme we find that all workers earning over £5,000 a year are not insured for consultancy fees whereas all workers earning under £5,000 a year are insured.

We will now find that a husband and wife earning £4,999 will be covered for consultancy fees and maternity costs by paying £50 to the State. A family earning £5,001, a husband, wife and four children, will find that in return for paying the State £50 they have not got cover for consultancy fees or maternity services. The likelihood of maternity services may lessen but consultancy fees are more likely to occur in a larger family than in a smaller one. The larger family will now find under this Bill that they will have far less hospitalisation insurance cover than the smaller family who are earning marginally below them. This is not what one would expect in this Bill from a Minister anxious to remove the anomalies in the level of benefit and the level of cover. I should like to hear from the Minister the estimated number of people in the category earning over £5,000 whom he feels will receive only this limited cover and also the number of manual workers who will suffer a reduction in the level of State cover.

There are a number of other matters which the Minister did not deal with in his opening statement which would have helped us in our understanding of the new scheme. I hope he will deal with them when he is replying. This scheme is in essence the same scheme as our Government intended to introduce in the last three or four years but did not succeed in doing because we failed to receive the co-operation of the medical profession. There has been a suggestion in certain quarters that the Minister persuaded the medical profession to accept the introduction of this scheme in return for the negotiation of a common contract. Perhaps the Minister would clarify what the position is in relation to the common contract at present.

There were other far less palatable suggestions which I find difficult to believe and I find it difficult to accept that the medical profession would operate in such ways. There were suggestions that if this scheme were introduced all the beds in State hospitals would be made available to consultants operating in those hospitals for their private patients and that there could be an element of queue jumping with consultants moving their private patients into beds over which they would have control at the expense of the medical card holder or at the expense of other persons who were intending to go into hospital under the full cover aspect of this scheme. I find it very disturbing and I am not prepared to believe that the medical profession would operate in that way. I would like the Minister to deal at length with any suggestions that have been made in this regard and to say whether he believes that there is any validity in those suggestions or any likelihood that, under the terms of the scheme he intends to introduce, the medical profession would be able, if they wanted to stoop so low, to discriminate as between patients not on the basis of the degree of their illness but on the basis of the extent of their fees, to discriminate in favour of one set of patients or another. I would like the Minister to indicate that that sort of thing could not happen, not that I accept that it would happen.

There is one other aspect of this scheme which intrigues me. I would like the Minister again to deal with it by way of reply. That is the concept of extending the limited refund of the cost of drugs to all sections of the population. It merits separate handling, separate treatment and separate costing because it is a very cumbersome scheme. It is a scheme which those who benefit from it at present find annoying; they must collect receipts and send them in to the health board and receive the payments, less the deduction of the first £6.50 per month, back at some later stage. There are certain cases where health boards are sent receipts totalling £8 for a month and they must deduct the first £6.50 and send the person back £1.50. I have no doubt that the manual handling and processing of that claim, the drawing of the cheque by way of refund and the issuing of it to the person concerned is costing at least as much as the amount of the refund. I would be interested to hear from the Minister whether there have been any exercises done by any of the health boards in relation to the cost of this operation. Some of us are inclined to suggest that there should be more exercises done by the health boards in relation to the cost of many of their operations. I am given to understand that some of the health boards have the greatest reservations about the amount of money it is costing them to process the existing claims under the existing limited scheme and it seems quite likely that the Minister, the health boards, the State, eventually this House and the tax-payer are going to discover that when this scheme is extended to the population at large the actual cost of its processing will be a dreadful financial millstone around the taxpayer's necks and around the neck of everybody involved in it at each step along the way. I also wonder how we can reconcile the concept, from the health point of view of a Minister who is proclaiming the merits of preventive medicine and health education, and proposing to extend this scheme to the entire population. If one reads the paragraphs in relation to health in the White Paper, in the absence of a concrete plan or concrete proposals, one might be forgiven for saying, especially when one takes into account the Minister's intentions in other fields, that he has now decided to ban sickness.

I thought of it.

I am sure the Minister thought of it. If the Minister thought he would get a headline in tomorrow's paper he would announce it this evening. There is no doubt about that. Here we have a Minister putting the entire emphasis on education and preventive medicine and at the same time he is now suggesting that he is going to extend to the entire population the concept that they can recover the cost of any drugs they get, which cost them more than a certain figure per month, from the State. I am not at all sure that that is not going to encourage the idea of a pill-popping society. I am not at all sure that it is not going to bring about a situation where people will be more inclined to go to their GP and seek a renewable prescription. The Minister will appreciate that there are certain people who believe that drugs are the panacea for all ills. They are not, of course. But I am not at all sure that many an overworked GP will not now be more inclined to issue prescriptions of a continuing nature to patients who have been continually pestering him for drugs of one sort or another.

There is another very dangerous aspect to this scheme which I wonder if the Minister has investigated. I hope that he has. It is well known that the cost of drugs on average from the drug firms here is anything from 15 to 20 per cent higher than the same drugs in Britain. It is well known that one can go to two different doctors and they can prescribe equally effective drugs for an illness and there can be a difference of ten times the cost between one drug and another. To some extent up to the present the GP has been influenced by his own personal assessment of the financial circumstances of his patients and he may not have been so inclined to prescribe the drug that costs £25 if by rooting around in some of the medical publications that come out regularly and advise doctors in relation to the up-to-date positions of drugs —I am sure we could hear a lot more about it if Deputy O'Connell wished to enlighten the House—he could find a cheaper drug that could do the same job. Now under this extended drug scheme there is no longer an incentive to the GP to take the trouble to look for the cheaper and equally efficient drug to prescribe for his patient because he knows that his patient can go in with the chit and get the dearer drug and get a refund from the State eventually.

From that point of view I do not believe that the eventual cost of that scheme having regard to the processing of refunds and so on has been fully taken into account. There has been a restriction in the personal attitude of the GP and he has taken his patients' financial circumstances into account. He is not going to be under that restriction from now on. There has been a restriction from the point of view of applicants for treatment; they may often have felt that to go to a doctor and have costly drugs prescribed was more than they could afford at a particular time. That type of restriction will not apply now. I am not sure that a combination of that and what I believe will be mammoth handling costs at health board level may not turn out to be the financial millstone that may upset the entire costings of this insurance scheme. I hope I am wrong because the concept of an insurance scheme is one that is very dear to the heart of this party and the fact that the Voluntary Health Insurance Board is there at all is due to the attitude this party took so many years ago in relation to hospital insurance cover. For that reason, having looked at the cost of this scheme, I am less than impressed first of all at the cost benefit to the State and to the individual, and second, by the possibility that the scheme will be self-financing. I am making these remarks not in a political way but sincerely because it is an aspect of the scheme that frightens me.

In so far as the scheme extends hospitalisation insurance cover to the non-manual worker in the £3,000 to £5,000 band, we welcome it sincerely, and in so far as it extends cover of a limited nature to the non-manual worker earning more than £5,000 a year and the farmer with more than £60 valuation, we also welcome it in a limited way. However, in so far as it provides far less cover in return for payment of twice the amount, it is a scheme that cannot be welcomed by the manual worker who earns in excess of £5,000. Because of the anomaly between the levels of benefit of all of those in the above £5,000 category as opposed to those who earn less than £5,000 a year, this cannot be welcomed as a comprehensive scheme.

I had hoped for a comprehensive insurance scheme covering hospitalisation. This is certainly not a free scheme. I do not think anything is free in this life except advice—and I have often found that to be a very costly thing, especially to administer. If I were to give free advice to the Minister it would be that he should examine the ceiling as he has pitched it in the Bill, and if he wants to keep that ceiling on a par with the social welfare and redundancy schemes, he should do it if he thinks that is the best way, but he should give the same level of insurance cover to those in the upper bracket as he is giving to those in the lower bracket. Otherwise he will be creating new anomalies in exchange for the old.

I appreciate the Minister's dilemma when faced with the whole question of hospitalisation and the anomalies involved in the question of who is entitled to what. It must have exercised the minds of the best experts in the Department and elsewhere to try to devise a measure that would bring about a more equitable and just system to help those who have been suffering grave hardships because of the demarcation in regard to who was and was not entitled to free hospitalisation. The former Minister, Deputy Corish, when he first mooted free hospitalisation, was confronted with correcting the anomalies. He should have been concerned with primary health care and given greater priority to certain matters.

Our health services are costing 6.3 per cent of our GNP, £419 million, and the EEC Ministers have decided that it should not go above 6 per cent. I totally agree with that. If we were to pour £100 million into the health services we would not make a healthier society. First of all, we would be lucky to get another £100 million from the Minister for Finance, and I am afraid the consequences would not be a healthier society tomorrow. Far from it. It would be like putting paper on a massive fire: it would be consumed as rapidly as it was put on.

That is what has been happening. In 1971-72 we were spending £65 million a year, and it has jumped now to £419 million, but our society is not any healthier. Therefore we have got to ask ourselves where we should be spending the money. I am afraid the money is being spent wrongly, that it is not going directly to the consumers of our health services. First of all, it is being gobbled up by a massive bureaucracy within the health services and, two, it is going on pet schemes and ideas of people who have not the welfare of the patient at heart. This is becoming more evident every day.

I had hoped that the Minister would have given a place of priority to the family doctor service. The cost of the family doctor service at the moment can be considerable in the case of husband and wife and a young family, because illness can be recurrent and distressing. The cost to such a family can be enormous and those outside, or barely outside, the range of eligibility for medical cards suffer greatly. Therefore I had hoped the Minister would have contributed 60 or 70 per cent of the cost of the family doctor service. In such a situation he would have saved in terms of hospitalisation costs, because many thousands of people who now have great anxiety in regard to the cost of family doctor care opt for hospitalisation.

When we are talking about the cost of hospitalisation we must realise that a bed in a teaching hospital in Dublin is costing the State something like £250 a week. That is a lot of money for a bed in a teaching hospital, and what we are doing is encouraging more hospitalisation because of the severe restrictions we are putting on the family doctor service. We have got our priorities lopsided. If I were looking at the entire range of health services I would be putting money into health education and preventive medicine and, second, I would be putting money into the family doctor service, making it available to a greater number of people, those with large families who have the greatest demand for doctors. Thus I would be relieving the pressure on the labour intensive area of hospitalisation.

As I have said, the Minister had a dilemma. It certainly had not been resolved before he came into office. I do not agree for a moment that the doctors thwarted the previous Minister for Health. I believe the approach was wrong—that is a personal opinion. I believe the previous Minister could have won the doctors around in the matter of free hospitalisation if consultation had taken place, as is normal trade union practice, if he had explained to them the need for a system of free hospitalisation.

What the present Minister is offering now will not solve the problem. He is extending the hospitalisation programme and he is posing a serious ethical problem for doctors. If you, a Leas-Cheann Comhairle, and I were to require hospital beds at the moment, and I had less than £5,000 a year and you had more than £5,000, there is a natural temptation for consultant surgeons or physicians to give priority in the matter of hospital beds to patients with incomes in excess of £5,000 because the consultants would have a greater assurance of being paid hospital fees whereas they will not be paid consultants' fees by a person with less than £5,000.

The Minister is posing a serious ethical problem for doctors. It may mean that the person earning less than £5,000 per year will be put at risk. Although the indications for admission may be similar in respect of two people, there is a greater risk that if one person is earning less than £5,000 his need for a hospital bed will be left in abeyance. I am not saying that any doctor will fail to honour the Hippocratic Oath but doctors all over the world are merely human beings. There have been instances in America under the Medicare system where it has been shown that the disadvantaged sections of the community can be at risk in terms of health. There is no point in saying that the Hippocratic Oath determines totally a doctor's behaviour, because that is not so in every case. Therefore, it is grossly unfair to doctors to put the onus on them in regard to treatment. A doctor with an income problem, for example, might be tempted to act in a way that would put a lower-paid person at risk.

That is why I say we should not put temptation in the way of doctors in this regard. To illustrate what I have in mind I shall take a simple case of a tradesman who receives two calls to houses where there are burst pipes. If that tradesman knows that in one case there will be no question of his being paid for his work but that in the other case he is assured of payment, it does not require too much imagination to guess which of the two calls he will answer. There is no point in talking about dedication to duty. We are living in a very mercenary age, as is obvious from the various industrial disputes, demands for extra remuneration and so on, although people are only seeking extra remuneration in order to keep up their standard of living.

There is a great danger, then, in providing that people earning less than £5,000 will not pay consultants while those earning more than that will pay. I might understand that provision if there were no other way of dealing with the situation but there is an alternative. The Minister is creating an enormous bureaucracy in order to administer this system. The late Mr. Childers said here in October 1971 that he, as Minister for Health, was abolishing the 10/- a day payment for hospital beds because the administrative cost far exceeded the return. That was an admission that the administrative costs were too high for the operation of the scheme. Consequently, the Minister introduced the Health Contributions Act. What we are doing here is establishing another massive bureaucracy and bureaucracy is the curse of our health service. It is gobbling up the massive amount that we provide for the purpose of the health services. There are three bureaucrats for each person administering health care. We might ask how much of the £419 million actually goes to the beneficiaries of the health service. The answer is very little.

I realised the problems that the Minister faced and I had some sympathy for him in that regard. It was for him to devise a solution. What he introduced was a good deal better than what went before, because in the past people were faced with massive hospital bills if they were non-manual workers and their incomes were more than £3,000. I had a constant stream of people approaching me with demands they had received for very large amounts and with solicitors' letters from hospitals. However, if instead of what he has done, the Minister had said that what he was proposing was an interim measure, I would have supported him fully. If he had said that he was setting a target for free hospitalisation, maintenance and treatment, I would have voted for him even at the risk of expulsion because I was aware of the problems he faced but, instead, the Minister is creating further problems by way of this measure.

I am condemned by some people in my party for agreeing with the Minister on the question of health education. We must curtail the amount we spend on health services and endeavour to get the best value possible for the amounts we spend. I am not saying that health education is the panacea for all medical ills, but a good health education programme is going a long way to help in this direction. In the first place it educates people to help themselves in cases of temporary and trivial illnesses which should not require the attention of a doctor. Many illnesses are self-imposed. I would go so far as to say that more than 50 per cent of illness is self-engendered. I am thinking of the areas of psychiatric illnesses, respiratory ailments, heart diseases and so on. Our way of life contributes to many of these illnesses, but by way of a process of health education we should succeed in persuading people to change their lifestyle, to live a more healthy life. Last year I suggested an expenditure of £1 million in the area of health education and I note that there is an increase in this regard. I should not be surprised to learn that the Minister had been seeking £2 million for this purpose. If I had responsibility for apportioning finance I would not consider a sum of £5 million to be excessive for this purpose. That would be a drop in the ocean in terms of an expenditure of £419 million but it would be very beneficial in terms of results.

The Minister refers to the labour-intensive service. I agree with him on that but there are other areas that need to be considered in this whole question of hospitalisation. There should be set up a proper cost-benefit analysis team on the utilisation of extra equipment. There is the expensive diagnostic equipment, for instance, which closes at 5 o'clock and which becomes obsolete long before its utilisation period has expired. Laboratory services operate from 9 a.m. until 5 p.m. Why do they not operate 24 hours a day and reduce the patient's stay in hospital? I saw this operating in America where I worked: the best services were provided for people.

Before we invest money in sophisticated equipment we must have a cost-benefit analysis carried out. For example, we have coronary by-pass surgery which is a major operation. The chances are it can extend the life of a person who is suffering from heart disease, but the cost is phenomenal and the benefits are few and equivocal. It has not been established that the results justify the operation as such. If I found that I was suffering from angina and heart disease warranting this operation I would without hesitation refuse to have it. Furthermore, I would advise my patients to refuse such an operation because the risks are enormous, the benefits few and the cost phenomenal. By ploughing a fraction of the cost of this operation into health education and preventive medicine and by encouraging people to eat the right diet and to take exercise thousands of pounds could be saved. This is but one area where we are spending money and wondering whether we are getting results. If the money that is poured into sophisticated, diagnostic and other equipment was spent in starved areas of our health services like St. Brendan's Hospital, where people are condemned to live in appalling conditions, and other mental hospitals, then I would understand the extra expenditure. The money is there but it is like money being thrown on a furnace: it is burning up fast.

We have some eccentric individuals with eccentric ideas who see vital areas of our health service starved of resources but which do not fit in with their plan of action. They stand indicted before society for ignoring these areas that are crying out for help. These people should be brought before us to explain their eccentric actions because no matter what way we look into the future to see what should be done in these services we cannot ignore people in need or people who are not treated as human beings. People should not be treated as subnormal for the sake of visionary ideas. That is wrong. No matter how much we want to plan our services we cannot ignore people in need. That is what is happening in St. Brendan's and in other mental hospitals.

It was said that I was exaggerating about conditions in St. Brendan's Hospital. I was not exaggerating when I saw a wild bird flying around the kitchen with its droppings on the food or a patient's bed being pushed everytime the door was opened. People were sitting there as if in a state of catalepsy. Anyone who condones or approves of that stands indicted before society. To say that money should be diverted into better community services is wrong. If these conditions are taken care of then I will support the other services, but we cannot ignore those people. They are human beings and must be treated as such. Cattle are treated better than they are. This is not just the position in one hospital; it is the position in all our mental hospitals. If I were the Minister I would make a tour of our mental hospitals, not necessarily a preannounced tour, because establishments have a habit of making things nice. I remember going to St. Ita's Hospital and being brought into the parlour for tea. I strayed off the beaten track and that is when I first became aware of the terrible injustices being meted out to our fellow human beings. I would ask the Minister to withdraw some of the money that is spent on sophisticated equipment and appliances that have equivocal benefits and divert it into essential needs.

At the risk of offending my friends and my party I will support the Minister in his health education programme, because I know he is right. However, I would ask the Minister to consider the mental hospitals and the people who are getting a raw deal with no voice speaking on their behalf. If the Minister does that he will go down in history as one great Minister. They need the Minister's help and support and they are crying out for it at the moment.

The family doctor service must be looked at because borderline cases give rise to great hardship. The health boards, while uniform in their set of guidelines, are not uniform in their approach to hardship cases. The Minister has said to me on many occasions that the chief executive officer is prepared to consider hardship cases on their merits. In the health board area in which I am involved that is not happening. A person who may be as little as 90p over the margin is being deprived of a medical card. Some health boards are operating with a great degree of humanity, but in the Eastern Health Board the approach is too rigid. If a medical card were given to these borderline cases there would be an enormous saving on hospitalisation costs. There was a case two weeks ago where a person could not afford to pay the doctor. The doctor was coming every day and it was costing £5 a day. The person concerned said they would go into hospital because they would not have to pay there. Hospitalisation is free, but it is costing the State £250 a week. The Department could save money if the Minister looked seriously at these cases. I would ask the Minister to ask the Eastern Health Board to operate the hardship clause properly. Other health boards have great sympathy for such cases.

When manual workers whose incomes are in excess of £5,000 a year joined the social welfare scheme they were given certain rights to free hospitalisation, including maintenance and treatment. That was embodied in the Health Acts. The decision to withdraw from 25,000 to 30,000 people their right to full free hospitalisation is a very serious legal matter. If I were a skilled manual worker earning in excess of £5,000 a year I would take the Minister to court for depriving me of my right. That will happen. When you gain rights under the social welfare scheme they cannot be taken away. That is what you are paying your insurance for, and your right cannot be taken away from you. I would ask the Minister to check the legality of what he is doing. He is taking away rights which he is not entitled to take away.

Services.

Rights. When a manual worker joined a social welfare scheme, no matter what his income, he was entitled to full free hospitalisation. I am convinced 25,000 skilled manual workers with incomes in excess of £5,000 a year have a case against the Minister. I should like to see them challenging the Minister. They have a duty to do so. You have to buy rights from people. The Minister will have to look at that aspect. If you take a right from an employee you have to buy it from him or compensate him for it in some way. Under the Health Contributions Bill he is not being compensated for it in any way. If there were compensation for him I would say that was all right. If the Minister said: "We will do it for such and-such a time. We will phase it out and in return we will give such-and such", I would say that could be justified.

The collection arrangements for the health contributions are a source of great annoyance to me. The PAYE worker, the civil servant and the ordinary worker cannot evade, but the farmers owe the health boards millions of pounds in health contributions which have not been collected from them. The PAYE worker is being fleeced again. He has no option. The contribution is deducted at source. The last time I questioned this matter the farming community owed over £7 million in one year. It would be interesting to know what the up-to-date position is. This is a serious matter. The Minister says he would like a simple collection agency for the health and social welfare contributions. Has he considered amalgamating the Department of Health and the Department of Social Welfare? This would streamline the service.

There is a tremendous overlap between the Department of Social Welfare and the Department of Health. If before he leaves his Department he were to amalgamate those two Departments he would streamline them and produce a much more effective service. This would be of benefit to the community at large and make the Minister's task much simpler. I know he was in favour of this when he was in Opposition. As the Minister knows, in Britain they operate a Department of Health and Social Services. Amalgamation of the Departments may pose administrative problems but the Minister should consider it. He is trying to make them slot in together and, if he were to go that one step further, there would be a great rationalisation of the health and social welfare services and that is what is needed.

At the moment social welfare pensioners with very small incomes are being sent demands by the Revenue Commissioners for health contributions. They are told they must pay and this causes them great anxiety. When I approached the Revenue Commissioners at first they said these people had to pay and then they admitted that they had not. Their income does not bring them into the tax bracket, although there is very little income at the moment which is not brought into the tax bracket. I would ask the Minister to make a firm statement that social welfare pensioners with £20 a week, or something like that, do not have to pay health contributions. I dealt with quite a number of these cases and, when I queried them, in every case it was decided that they did not have to pay the health contributions. Someone somewhere in Revenue is sending out these demands. The Minister might have a look at that.

Most of them would have medical cards anyway, and therefore should not be paying.

That is right, but the demands are being sent out. This is all new to them. They have been on pension for years, even since before 1971, and they do not know anything about health contributions. As I said, £490 million is being ploughed into our health services this year.

Plus £25 million on capital.

That is right, and it is an enormous sum. It works out at £3 per week for every man, woman and child in the country. I have no hesitation in saying that, for that amount of money, we have the worst health service in Europe, the worst health service within the EEC. More galling is the fact that visitors from the EEC can come here and enjoy full free medical services, whereas an usher in the Dáil has to pay. The managing director of a big company in Britain came over here. I heard his income was £30,000 a year, or £600 a week. He could enjoy free hospitalisation, free health services, free family doctor service while he was here. That is grossly unjust. Ambassadors can enjoy our health services free under the terms of the EEC regulations.

They get free whiskey too.

I am talking about the health service. An usher in the Dáil has to pay out of his limited income while a man with £600 a week gets it free. That is unjust. An old lady, a non-contributory old age pensioner with a pension of £11.70 a week, had to go to France to visit her daughter. She could not get a free health service in France. She got a bill for £870. I brought this case to the Minister's attention. An ambassador can come here from France and enjoy a full free health service while she had to pay £870 in France.

The system is wrong. The right amount of money is being put into the service but it is being gobbled up by the bureauracy. We have the worst structured health service in Europe. The injustice becomes all the more apparent when an EEC visitor can have the full benefit of the service at no cost while families are having to pay for hospitalisation and for the services of their doctors. We should be trying to put our services on a par with the services in other member states. All member states are spending the same percentage of GNP on their health services. The money is being put into the health service but the benefits are not being distributed fairly. There is something wrong.

When the former Minister for Health Deputy Corish, spoke of 50 per cent of the people in his area having medical cards, he said they were the wrong 50 per cent. The valuation of a farmer's land is not necessarily the best guide. A farmer whose land has a valuation of £60 is entitled to a medical card. A lady from Dundalk wrote to me about a farmer who drove a Mercedes. He was entitled to a medical card while she, who was struggling to rear a family on £40 per week, could not get one. We are giving free treatment to the wrong people. We should introduce a more equitable system of eligibility for medical cards. Eligibility for medical cards should not be based on farm valuations because farms in Munster are more productive than farms in the west. We should ensure that those who are most in need receive the benefits of the health service. I would ask the Minister to look at these areas.

The Minister has extended hospitalisation but has produced serious ethical problems for doctors. A common contract could have been devised to benefit the hospital consultants and to introduce hospitalisation for all. The Minister's ingenuity in winning the support of the profession is beyond comprehension. I pay tribute to him when I say that he has won over the medical profession with his Family Planning Bill. If he can do that with his Family Planning Bill, he could just as readily win them over to the idea of a full free hospitalisation scheme. Deputy Boland referred to an insurance scheme but the Minister pointed out that such a scheme would contribute only 6 per cent of the total cost of the health services. I have no hesitation in saying that the Minister should be able to produce the right formula for a comprehensive hospitalisation scheme. If he were to say, "This is an interim measure. I will work it for three years and then bring in the other scheme", I would support him against all odds.

I would ask the Minister to look at this problem again. The consultants will have to realise that we cannot have inequities in the hospitalisation scheme. An ethical problem will be created by the fact that a person earning under £5,000 per year may not get a hospital bed.

It has been argued by Deputy Boland that the extension of the drug subsidy scheme to the entire population will cause problems. There was merit in what he said. If we were to argue against a scheme on that basis we would not introduce anything. The answer to the problem is to use the services of the Health Education Bureau. The Health Education Bureau fulfil their role by advising people to lead healthy lives and not to depend on drugs. We must dispel the myth that there is a pill for every ill. I would like to see the Minister going to RTE to talk about programmes, not just advertisements. RTE could play a valuable role in society by producing programmes on all aspects of health. RTE have a duty to co-operate in this area.

I agree. We are working on that.

The first thing the public should realise is that there is no such thing as a safe drug. All drugs produce side effects. Sometimes the side effects produced by drugs exceed the benefits so that every drug must be taken with great caution. That is the first thing we must get across to the public—that there are foreign substances going into the body that can create great problems. All the great drugs that have been discovered over the years have been found after a time to have side effects. The function of a doctor is to weigh up the advantages of the drug as against the side effects and disadvantages and where he feels the advantages far exceed the disadvantages, then he prescribes it. But sometimes the patient does not realise the great responsibility he takes in deciding this. Perhaps the doctor does not explain sufficiently the many disadvantages of the drug, that one must be careful of it, because he does not want to create anxiety in the patient. It is a problem for every doctor when he prescribes a drug to know that it has great disadvantages—it may cause stomach bleeding and all sorts of other problems, so many of them. The public do not know this; they must be informed that the consultation with the doctor should not necessarily end with the prescription. There is a vicious circle here: the patient thinks he must get a prescription after the consultation and the doctor feels the patient wants a prescription and automatically obliges. Advertisements themselves do not bring home this message as forcibly as we would like. Perhaps discussion programmes with patients, chemists, doctors and all involved would help. With a little honesty from doctors and patients possibly many ailments could be managed reasonably without drugs.

There is a clinic in America operating for insomniacs, a specialised clinic. They found patients were taking an average of six sleeping tablets a night. The number went as high as 12 tablets. They did a little research on the chronic insomniac patients attending the clinic, patients who had been all over the place and had come to the clinic as a last resort. Having investigated their dietary habits they found that these people were drinking eight, ten, 12 and up to 20 cups of coffee in the evenings. The coffee with its stimulant property was keeping them awake and they were taking tablets to put them asleep. When these patients were taken off the coffee there was no need for the sleeping tablets. That is a simple lesson but it took a specialised clinic to discover it. Two nights ago I saw a person drinking a large mug of coffee and ten minutes later taking a sleeping tablet, one neutralising the effect of the other. People do not realise that they are doing this.

Sometimes advertisements do not get across that message. People "turn off" for advertisements even if they are most beneficial. They do not need a remote control; it is a psychological "turn off". Therefore, I should like to see greater emphasis on discussion programmes about this, perhaps a visit to a clinic like that. A Dublin doctor has decided not to supply tranquilisers and has set up a relaxation clinic. He and his colleagues are encouraging people to relax. The benefits can be enormous at no cost to the patient. This doctor is doing great work for the health service and a great service to the patients. This is a new and healthy approach. That is why I praise the Minister's health education programme. This is the right concept. These programmes will not pay dividends overnight and people who expect miracles from them will be sadly disillusioned and he will not see the benefits of his work. But he is starting it and doing it and even if it is described as a publicity stunt it will get people thinking about exercise.

Patients complain about obesity or over-weight and look for tablets. Sometimes it is hard to explain to them but this is the kind of education they need, that if they walk a little more they would not be obese: if they eat fruit instead of sweets and so on they will not be too heavy. It is a life-style pattern they must change by simple things like that rather than seek anti-obesity tablets or appetite suppressants which are doubtful although psychologically, perhaps, they work. I suppose you could give "Smarties" or placebos and they would be just as effective because nobody can actually prove that they have mobilised the fat in the body and helped one to become thin or that they suppress the appetite sufficiently. Here, we see an enormous amount of money used. If we had such a gross national product that we could afford to spend lavishly on luxury drugs I would not mind but it is unfair to subsidise such drugs when we get people with severe rheumatoid arthritis that is so crippling that they need good drugs and are deprived of them by virtue of this scheme.

I ask the Minister to consider seriously the whole matter of divorcing the medical card from the drugs. The medical card should be for doctor service. The Minister should consider providing a free doctor service under the medical card and then we should look at drugs separately and have different categories of drugs. If you took the drugs scheme away from the medical cards, you could give the medical card to up to 60 per cent of the patients and operate the drug scheme separately. The medical card holder can go to the doctor and get his advice and may not need drugs. If he does need drugs these should be categorised as (1) life saving drugs, (2) essential drugs, essential to making life tolerable and (3) luxury drugs, drugs which one could manage quite well without. If you want them you should pay for them. A medical card patient who opts for luxury drugs should pay for them because they are not essential. That is how I would change the system bearing in mind that there will be overlapping cases but that will not pose enormous problems. By arranging things this way you could overcome all the hardship clause cases—make the medical card service available in a free doctor service and have the drugs as a separate thing. You could extend the range of the free drugs scheme for these special illnesses that need them.

The purposes of a health service are (1) to help those who are suffering, (2) have research into illnesses, (3) create a healthy society by educating people who are abusing their bodies. That is my concept of a health service. People who opt for luxury drugs should pay for them and the public should not have to subsidise these drugs. Such a scheme could save the State money and we could provide a family doctor service for a greater proportion of the population. I know the Minister is caught in a kind of pincers with the contract with the family doctors for the GMS but I do not think it is beyond his capabilities to cope with this. There is a borderline of 40 per cent, that if over 40 per cent are entitled to the medical card, he must re-negotiate the contract. That should not daunt him in any way. To be put off by that would be cowardly, craven, and he is neither.

I do not care what party the Minister is in, I give credit where credit is due. He is trying to change the health service for the better and it is not an easy task. However, he could, with a little vision, tackle it completely differently. He could look at it again. I remember it being said that to extend the eligibility by £1 would cost £1 million. Of course Dr. Bono is a great professor who believes in lateral thinking and he has provided some examples of how we can solve many problems with lateral thinking. When I heard the Minister saying that to extend the eligibility for medical care by £1 would cost £1 million, I said to myself that the Minister was blinkered and was looking only one way. That is what he is doing and he has come up against a stone wall. What he did not think of doing was walking round the wall.

He could extend the medical card by divorcing the medical card service from the drug service. I had great difficulty in persuading patients that they did not need a new pair of elastic stockings which are costing a lot of money, and I had to say to them constantly that a poor lady down the road was in great need and if those people were demanding those from me they were depriving her of badly needed tablets for her illness. Sometimes people want to hear only about their own illnesses and they do not want to hear about anyone else's. When these articles are not urgent and not life-saving they should be put into the luxury category. In that way a lot could be achieved.

The Minister's colleague cannot give him unlimited amounts for the health service and what he has got up to the present has been very good. I ask him to set up a special section within his Department for studying ways of economising within the health service without depriving people of certain essentials. Perhaps the whole structure is a little unwieldy on account of this bureaucracy which we are encouraging by setting it up all over the place, and whether it is benefiting the health service is questionable. There is enormous cost. Ministers—I am not referring to the present Minister—have a habit of boasting that they got so much extra for the health service in a year. We should not be boasting about that; we should be saying that it is deplorable that they had to provide so much more because of the way the service is going. The Health Contributions Bill has gone some way, although it poses problems. It is going to extend the waiting lists for hospitals and it is going to encourage, in a way, a longer stay in hospital, and that is going to be another burden on the cost of hospitalisation.

I would like to see more day hospitals. Day hospitals have to come and they should be extended in major hospitals where a number of operations can be done and the person can be allowed home on the same evening. A full service can be provided there. The big expense is the maintenance cost in the hospital. It is incumbent on the Minister to set up this special section within his Department to look at the question of cost. They must ask each hospital what they are doing about setting up day hospitals to relieve this tremendous pressure on beds. That should be among the Minister's priorities in the hospitalisation service. The day hospital service is operating in St. Vincent's and in Sir Patrick Dun's. I would like to see it extended to every major hospital and facilities for it should be provided because the savings are obvious. This could save a lot of money as it would eliminate overnight maintenance costs.

The Minister should investigate to see how the out-patient service could be improved. The present out-patient services are far from satisfactory. If we operate an appointments system everyone should not be asked to come at 10 o'clock, as is happening at the moment. A little questionnaire should issue to hospitals from the Department as to how out-patients services are working, how they could be improved and how the appointments system is operating. These are ways of relieving the strain on the hospitals. A questionnaire from the Minister's Department could elicit a lot of information which would be of great benefit. The Minister may argue that this is a question for the health boards, but the Department of Health are the body who exercise full control over all and who direct the health boards in doing this. The Mater Hospital made a statement to the effect that the operation of the casualty service is creating an enormous burden on the hospital beds.

Another area which requires investigation is the special tests that have to be provided for patients. We want to see how we can operate them more efficiently and effectively and much more satisfactorily from the patient's point of view. This can and should be done. The proportion of the £419 million which goes into the hospital services is really enormous. We could cut back tremendously and divert the money into essential areas which are screaming out, starved of resources at present. We can do this without spending an extra penny by streamlining our out-patient services and making them into proper diagnostic centres so that a patient does not have to go into hospital for tests. Figures for the number of patients admitted and who need not be in bed, who merely need tests that could be properly and adequately carried out at out-patient centres would indicate that probably between 30 and 40 per cent of admissions to hospitals are admissions for that purpose. That is a very high figure and it is a very costly operation. Another area, that of minor operations, would represent a high proportion of hospital admissions.

Two or three years ago it cost £212 but now I think it costs £250 a week for a bed in a Dublin teaching hospital. This is the cost to the State. Would it not be better to accommodate patients who are ambulatory in hostels close to the hospital? This would reduce the cost of hospitalisation and the bed occupancy rate. There is considerable pressure on beds because there are not sufficient available for those in need. Many people in need of hospitalisation are being deprived of beds that are taken unnecessarily. We must streamline the health services and make them more satisfactory for patients. The Department of Health should examine areas like this on a continuous basis. For many years I have been asking for this examination but nothing has happened. We make suggestions here on how to reduce the cost of the health services without reducing the quality or causing inconvenience and it is annoying when nothing is done. There is an obligation on the Department to consider this matter.

There is enormous waste in the health services. There are areas in medicine that need money. I have already mentioned services with regard to mental care. There are 50,000 people—this is a conservative figure—who are urgently in need of hip replacement operations and they can only be told that there is a delay of from one to three years for admission to the Dublin hospitals. Where a person's way of life can be improved considerably by a hip replacement and where he can be returned to society to play a useful role, we have an obligation to provide the necessary money. I wonder about sophisticated operations that may be equivocal in their beneficial effects but this is one area where a lot can be done. We have an obligation to see how we can divert some money into this area of medicine in order to make people useful members of society. A person in need of a hip replacement does not suffer mere inconvenience; he can suffer excruciating pain and the disability and immobility may be severe. I am not asking for more funds but for a diversion of funds into this area.

I am not saying that everyone who is crippled needs a hip replacement. I have seen some disastrous effects and some situations where people could not be expected to be restored as useful citizens. It must be done on a selective basis and we must give priority to people who can be restored as useful members of society and capable of playing an active part. I saw one case of a man of 80 years being chosen for the operation. I would not consider this of benefit to him because the risks are enormous. As it happened he was 14 months bedfast as a result of the operation and his condition was worse. A proper and careful selection of patients is necessary but there are 50,000 on the waiting list for this kind of operation. We should plough back more money into this area of medicine.

I would ask the Minister to consider the free drugs scheme. There are various medical conditions that are being ignored so far as this scheme is concerned. This matter should be looked into. The Minister promised me he would do so after Christmas. We are now in the month of February and I am asking him to make free drugs available for certain conditions. First, I would ask him to consider the provision of free drugs for sufferers of asthma. This can be a chronic condition, it can be exacerbated acutely and can be life-threatening on many occasions. The drugs needed are very expensive. The other illness I have in mind is arthritis. There are several other illnesses and I sent a list to the Minister a year-and-a-half ago. I would ask him to consider the possibility of extending the free drugs scheme for these crippling conditions. They cause untold misery and there is an obligation on us to provide the drugs. If we are going to introduce the drugs subsidy scheme we should see if we can curtail the type of drugs that can be given and by savings we should be able, without any extra cost, to help those who are suffering from such disabling conditions as asthma, arthritis and some other illnesses. These illnesses are not self-induced. It is a tragedy for the people concerned. They are chronic and disabling and I would make those the two conditions for giving the drugs. It is unjust to deprive people suffering from those illnesses of the vital and life-saving drugs that they need. The Minister will be getting some money. He pointed out that this will be a self-financing scheme. He has succeeded in extracting a considerable additional amount. I am merely asking him to see that his Department consider what economies could be effected within the health services without lowering the quality. We must ensure that the best medical attention is provided for those in need. If he does that he will be doing an effective job.

It is very difficult to follow such an educational speech as that given by my good friend and colleague, Deputy O'Connell. I do not speak from the point of view of the professional but from the point of view of the employer and the employee. This Bill is certainly a step in the right direction and I give it a guarded welcome. Three different categories of people come under this Bill, medical card holders, people who come under the Health Contributions Act and people who are over the £5,000 limit. From reading the Bill and listening to the Minister I take it that, as far as people earning over £5,000 are concerned, hospital beds in public wards are free and they have to pay only for the consultant or for maternity treatment. This is certainly an improvement which has to be welcomed.

Our shadow spokesman, Deputy Boland, referred to the drugs scheme and I certainly disagree with him. One of the great things in the drugs scheme is that if people, particularly children, suffer from some ailment which requires treatment with expensive drugs, regardless of the parents' incomes the drugs can be obtained under the drugs scheme. There are cases where well-off parents have one or two children who require expensive drugs treatment and the family would find it impossible to pay for the drugs. There was a case in my constituency where a wealthy man's wife became ill and required expensive drugs which he could not afford to pay for. It is a good thing that if a family experiences hardships like this the State be able to protect the family.

Other cases which are deserving of State support concern families where a member has an incurable disease. In my constituency recently a farmer with a £60 valuation fell ill with cancer. Because he had a £60 valuation he was not insured as far as the £24 a year is concerned, and he did not bother about the bills because he thought he would get better. Just before he died his wife came to me with bills totalling £2,500. The farm had deteriorated due to the farmer being in and out of hospital for the previous three years. They had practically nothing except the land and they were faced with these bills. In such cases of hardship it is a good thing that the health boards can be asked to look into them to see what can be done. I would ask the Minister to see his way to asking the CEOs in all health boards always to look sympathetically at hardship cases. No matter how well-off some families are, when sickness hits it can impose an unbearable hardship.

One thing which worries me, which is a general occurrence in western seaboard areas, is the withdrawal of medical cards. There seems to have been a directive from the Department of Health through the CEOs in the health boards to assistance officers to look into borderline cases. It is disgraceful that in the last two months medical cards have been withdrawn from people with an £8 valuation who have only eight cows on their entire holding. Some of the other cases had £3, £4 or £6 valuations, but the highest valuation was one of £8 and the medical cards were withdrawn from those people. By the time I had contacted the CEO and by the time the assistance officer visited the people, two months had elapsed. The richest of these people and they were married people had only eight cows and were on the dole, yet their medical cards were withdrawn. There is something wrong somewhere. I can see the Minister shaking his head to say that no directive is coming from him. If not some of the CEO's must be taking it on themselves, and they must be real cranks to take it out on these unfortunate people. I would ask the Minister to see to it that such things do not happen in future. I understand that the eligibility limit for a married person at present is roughly £41 a week gross. It is a very meagre sum but I accept it. However, it is an absolute disgrace when people living on less than that lose their medical cards.

As I see it, a self-employed person must show his income tax returns to the Revenue Commissioners to prove that his gross earnings are under £5,000 a year. That being the case I take it that the person is eligible under this scheme once he pays £45 to the Revenue Commissioners. The procedure the Revenue Commissioners use in relation to this is wrong. The Revenue Commissioners should issue straightforward forms which people could fill in and send to the Revenue Commissioners enclosing a cheque for £45 so that they could be automatically registered. What is happening at the moment is that when a man writes to the Revenue Commissioners he encloses his income tax returns and sometimes two, three or four months can elapse before the person is covered under the health contributions scheme. A person could become ill during that time and he would not be covered.

In relation to farmers, the Minister mentioned that some form of notional valuation could be attached to the farm and stated that farmers are covered if they have less than a £60 valuation. A £60 valuation was probably the handiest figure to arrive at with maybe a £1 per £1 valuation. If somebody, for example, has a £25 land valuation that person has to send away only something in the region of £25 to be automatically covered. I take it this is what the Minister means by a notional valuation.

A multiplier.

The multiplier, something in the region of £1? Everybody under £60 valuation is covered by this?

The £60 valuation would be equated with £5,000 income.

What is the situation in relation to those with small holdings and a small grocery shop in the north west? It is unfair if, on taking the combination of both, the income of such people is in excess of £5,000 that that person does not qualify for the full services available. There are people with a land valuation of £6 who will not qualify because they have a small business concern which will bring their income in excess of the Minister's limit. I should like to draw the Minister's attention to another case which will create a problem. A man living on his own earning £4,000 per year qualifies for all benefits but if after he gets married his wife earns £2,000 per year both are ineligible. I appreciate that as this is a new scheme it is difficult to cater for all cases but I hope that gradually people will be asked to pay according to their income with no such thing as a limit. The Minister told us that £40 per week is the limit as far as the medical card is concerned and I have no doubt that within a few years £5,000 per annum will not mean anything. I hope it is the intention of the Minister to grant free hospitalisation to everybody, regardless of income.

I should now like to deal with the health contribution stamp and the social welfare stamp in so far as employers are concerned. I understand that the Minister intends bringing in a Bill which will combine the payment in relation to redundancy benefit with the two payments I have mentioned. The social welfare stamp at present amounts to 11.2 per cent with 1 per cent for health contribution. I appeal to the Minister to leave the amount at an even figure that will make it easier for small businessmen to cope with. Matters would be greatly simplified if the Minister made the total contribution a round figure. At present the 1 per cent for health contribution goes on to the employee's contribution of 3.4 per cent but if the employee is a medical card holder it is up to the employer to add the 1 per cent to his contribution. That is codology. I do not know how employers can cater for that situation. The Minister should forget about imposing that 1 per cent for medical card holders on employers. It should be left simple. What is wrong here is that we have a complicated system. As was once remarked, a complicated system is only as complicated as the mind. We have too many complicated minds and not enough black and white speakers. The figures should be left easy for calculation.

The Deputy is half of the syndrome; he is a White speaker.

Thank goodness that the stamp has been done away with because many employers abhorred the work involved in stamping cards. Last week we were told of a case where the State was not paid thousands of pounds for insurance stamps by an employer. If the position was assessed throughout the country I believe we would discover that the State lost millions of pounds because some employers did not stamp cards. In most cases the reason cards were not stamped was that employers found the system very complicated. If it was a straightforward system employers would have co-operated much more. The Department should have insisted that stamps were put on cards weekly. A lot of employers did not stamp the cards until the end of the year with the result that the State was without the money for 12 months. I welcome the Bill and I hope that within a couple of years the Minister will extend the scheme to cover everybody, regardless of income.

(Cavan-Monaghan): The good thing about the democratic system is that many points of view are aired on legislation such as this when it is being debated in parliament. We have heard the professional point of view of Deputy O'Connell who knows his subject and Deputy White dealt with the matter in a general way outlining the difficulties which certain systems present to business people who must try to work out percentages. I live in a poor constituency and I deal with urban and rural dwellers, people who are finding it very hard to make ends meet and I will concern myself with their plight. Under the present system there are three categories, medical card holders, the middle income group and those with a valuation of more than £60 and an income in excess of £3,000. The medical card holders get medical, surgical and hospital services free while the middle income group pay either 50p per week or £24 per year, if they are farmers, and they receive hospital services free. Those over £60 valuation or with an income in excess of £3,000 do not enjoy any free medical or hospital services.

Debate adjourned.