Dáil Éireann debate -
Tuesday, 2 Nov 1982

Vol. 338 No. 3

Private Members' Business. - Health Care Services: Motion.

Mrs. E. Desmond

I move:

That Dáil Éireann, while conscious of the need to eliminate wasteful State expenditure in the delivery of health care services, condemns the Government and the Minister for Health for the arbitrary and excessive reductions in the provision of State moneys for vital programmes of the health boards and for essential health care services for the poor and the elderly under the general medical services scheme and calls on the Government to review urgently this policy decision.

As we have stated in the motion we are conscious of the need to eliminate wasteful expenditure in health care services. Our concern is for the arbitrary reductions in the provision of State moneys for vital health care services and our concern is that the poor and the elderly are, under the cuts that have been applied and under the methods by which they are applied at the moment, the main sufferers. We believe, when the health boards have assessed their situations and communicated their findings to the Minister for Health, that the time is right for review of the policy decisions taken with regard to expenditure on health.

Health services have been used by successive Governments as soft targets for cutting public expenditure to meet any crisis in the nation's finances. Both the present and previous Ministers for Finance zoned in on the health services. They have looked to the old, the sick, the chronically ill people as well as the handicapped to bear a very heavy share of the burden of putting our finances in order. I submit that the health services are being used as a financial scapegoat in the absence of any serious attempt to tackle priorities in public spending or any serious attempt to root out the undoubted areas of waste and inefficiency in our public services and in the absence of any attempt to get the wealthy and powerful groups in our society to shoulder their fair share of the burden as it arises.

The Labour Party cannot accept that arbitrary cuts in basic health care available to the poorest and the weakest in our community is the answer to our current economic difficulties. We cannot accept that chronically ill, pensioners and others on like income should have to pay dearly for essential medicines while public moneys are being frittered away on projects such as Knock Airport. We cannot accept that the lowest income families in the country should suffer while modest tax proposals for taxing wealthy investors in discretionary trusts are abandoned by the Government. This is the context in which we are putting forward our motion this evening. If one were to pay heed to what one hears it would seem that the principle is accepted by all that those who can most afford to pay should carry the burden of coping with the difficult financial situation but we find that this is not the case. It is the weakest and the poorest that are hit hardest. This applies under the present system to every crisis that arises.

We all recognise the problems that the country faces at present but these problems cannot be tackled fairly and effectively without a comprehensive appraisal of public spending, both current and capital, without a comprehensive appraisal of the potential of raising further revenue, particularly in capital taxation. The present health cuts and the cuts in other vital areas that affect the weaker sections do not come as a result of this comprehensive appraisal. They are an arbitrary response conceived in financial panic and bluntly and harshly implemented.

We all know that there are many areas of public spending which do not give value for money. We have not had any satisfactory explanation in the House of the cost over-runs on many large capital projects. The Department of Lands, who currently employ 807 people at a net cost to the taxpayer of £15 million, this year have a total land purchase fund, according to the Book of Estimates, of £10. There are many examples such as this where value for money and prudent spending is in question. To illustrate that, there is no serious attempt made to look at our priorities, to look at who benefits from public spending, to look at the obvious waste and ineffeciency that exists. Instead, we have always taken the easy option. In this case it is the poor and their basic health care which are in danger of suffering. In the society in which we live, where lobbying and pressure have a greater bearing on what Governments do you will always find that the weak, those who have no lobbies, those who are not organised and those who have cannot exert pressure will lose out.

Revenue from capital taxation is not only a quarter in real terms of what it was in 1974. It is now £16 million as against a real value at todays' prices of £64 million in 1974. Since the abolition of domestic rates the taxation on business premises has fallen by a quarter in real terms. There is virtually no revenue from capital gains tax, from profits in land speculation. This area is highlighted very considerably at the moment. Surely the public accept the need to tax profits in this area and so bring money into the Exchequer at a time of drastic shortage, which we all acknowledge we are going through. Despite this, this years' Finance Act saw the Government shy away even from modest taxation proposals which could hurt their wealthy backers.

The Labour Party have repeatedly put forward the idea of a property tax. I believe the potential yield from an income-related property tax is about £200 million a year. We certainly put that forward in Government. The principle was accepted but we are always told that the mechanics of putting a project such as this into operation delays its implementation. If we had remained in Government I hope that we would have had a property tax. I believe that if the Government were anxious to respond to the financial crisis they would have explored the potential for increased capital taxation instead of seeking to have the whole burden of adjustment on the expenditure side. The Fianna Fáil Government are not alone in this kind of response. As far as the major parties in the House are concerned they have been equally reluctant in Government to tackle the thorny problem of capital taxation and find it equally difficult to get down to the serious economics of appraising individual spending programmes rather than go for the easy options where they hit the rich and poor alike. It is the contention of the Labour Party that if we are to have equity in our society this approach must stop and we must have a new appraisal of how we treat costs, how we treat spending, what the benefit to the public is and stop the cuts which hit rich and poor alike but of their very nature hurt the poor and the weak to a far greater extent.

I believe that the approach adopted by Ministers for Finance to date in tackling the deficits and trying to make ends meet is approaching the problem the wrong way around. They look for global cuts in spending across different Departments instead of examining programmes on their merits and in relation to the real needs of the people they serve. The Minister for Health in a press statement yesterday said that cuts are being made in the health services following sensitive examination of the services and the finances for them. I suggest, from the limited experience I had in the Minister's Department, that this is not exactly the case. A detailed on the ground examination takes place at health board level after the cuts have been imposed and the grants have been allocated. That detailed examination has been going on for many months and in some cases is going on at the moment. I believe that the boards have by now communicated to the Minister the alarming implications of this. I sympathise with the Minister. I understand the difficulty a Minister for Health has at a time of crisis like this. I understand the problem a Minister for Health has under the present system. Under this system the most cogent, the most well-informed arguments, the most lengthy and detailed arguments advanced by his Department and the officials of his Department to their counterparts in the Department of Finance and ultimately through the Ministers involved, the Minister for Health and the Minister for Finance, cannot get the consideration they deserve.

The Health Department is a big spender; it is growing rapidly by its very nature and there is a perception — in some instances rightly — that there is wastage in the health services. In every period of recession Health is the first target of the Department of Finance because they look to the "big ones" regardless of the social implications. There is very little time or facility to get the social implications across to the people who will bear the impact. It is a head-on conflict between the Department of Health and the Department of Finance. I suggest to the Minister that at this time he knows the full implications of the effects of the health cuts. These have been conveyed to him by various health boards and agencies and he has ample evidence to present them — and I hope there is some mechanism by which he can be heard — in support of the case for an urgent review by the Government of their policy in this area. The principal point in our motion is a call on the Government for an urgent review.

The Minister for Health should welcome this review. It is a period of retrenchment or at least a period of trying to make ends meet as regards the national finances. His Department are the first to suffer and he will be the main beneficiary from a review of this nature. If I were in his position I would welcome such a move and a new approach to the needs of the health services in relation to the moneys being made available by the Department of Finance for them.

Very many areas of the health services are still seriously deficient, not fully developed, many areas that in the long term we would do well to develop such as services for the elderly. Although a good deal of progress has been made these services are still deficient in the case of elderly people living at home or discharged in some cases — perhaps now more than ever — prematurely from hospital. They do not have the facilities they require to live in their own community. Community care services particularly need improvement. Also conditions in our psychiatric hospitals, I think we agree, are very far from perfect. They have lagged behind the higher-profile acute hospitals for many years. In keeping with the theme I have been expounding in the main they cater for people who have no voice, no lobby, and are not powerful in the political arena. During my term of office together with the officials of the Department I began a programme of visiting psychiatric hospitals and bringing in a plan for the long-term improvement and upgrading of these hospitals so as to enable many patients who are now long-term incumbents of psychiatric hospitals to resume normal life as residents in their community. This is an area in which development is definitely needed and we must devote more resources to it in future.

There are many health services areas that are not developed and delays in development cannot be brooked even in times such as these. We must therefore have an appraisal of the entire building programme in regard to health and, in the larger context, in regard to public spending generally. I would be one of the first — and the Labour Party motion makes this point — to recognise that there are very many areas in which we need to review the manner in which we spend our resources. There are many areas of health care services where reform of our spending is required. There will be all these priorities. There are many areas where their is profiteering and waste. In the case of health service cuts such as these what merits criticism is the harsh and cruel way in which they are being implemented. The cuts fall on the patients rather than on those who are creaming off profits from the services. Health services exist for the patients in the first instance but in the way the whole system operates one would wonder if they are for the patients. We must get back to realising that the patient has priority in the ordering of health services.

The Trident report, with which we are all familiar, has documented for us the bonanza our health system represents for the major drug companies. Last year drug costs in the GMS alone amounted to £38 million and Trident showed us that brand-name drugs in the main cost one-third more than their generic equivalent. It also shows the absence of proper stock control. I know that if the Minister's Department, which is very serious about stock control, got sufficient funds from the Department of Finance it would probably be carrying out more stock control in hospitals and from what I have heard from those working in the health services it would mean a considerable saving if stocks in medical institutions or health care institutions were controlled more effectively.

The report also showed the absence of centralised purchasing of drugs, which is very important. The way we organise drug ordering and purchase allows easy pickings for the drug multi-nationals at the expense of the taxpayer. In my short period as Minister I was working on centralised drug purchasing for the entire health service, on comparative tendering for drugs, on limiting State subsidies and return to generic drugs and other competitively-tendered products. The drug companies can spend millions of pounds promoting their products. We all know of instances where vast seminars and other costly gatherings are financed to promote a single drug. Doctors operating within the system will tell you quite honestly — I understand it — that a particular drug is so well promoted that it is the one that immediately jumps to the doctor's mind when he is about to prescribe. He knows from the vast array of information he has and which he has accumulated through the years that there is a cheaper product available but he has not the time nor the facility to reach for it. The one being promoted so effectively by the drug company is the one that comes to his mind. Obviously, in the interests of time and of the health of the patient, and probably of many other patients in his waiting room, he promotes that drug. This is big business. Profits from big businesses should not be allowed to soar in an area as sensitive as health. Companies which can spend millions of pounds on promoting drugs should bear the cost of the economies in the nation's drugs bill and not medical card-holders.

Drug companies get information from the Department of Health regarding the prescription and popularity of drugs. This helps the companies to plan for the future. There is a levy which they pay to the Department for this. However, I do not believe they pay that levy promptly. The Minister might look into this in balancing the budget. I know it will take time and that the Minister will not be able to do anything overnight. There are many problems to tackle. However, it is important to go after the areas where we know the money is and not cut back on essential care services for people without money or resources.

There is a misuse of resources in the division of the health care services between public care and private care. Some 35 per cent of hospital consultants' time is devoted to caring for 15 per cent of patients who are private. We have the scandal of poor families waiting for months or years to have necessary treatment carried out while those who can afford it can see top specialists in a week. We all know of cases where, for example, children with tonsilitis have been left on a waiting list and when parents were advised to go privately, the children were in hospital within a week. That kind of situation cannot be tolerated. I do not say that the Minister can put these things right overnight but we can address ourselves to this problem and make sure that we do not have two levels of health care available, one for the haves and one for the have nots. The most valuable possession a person has is his or her health. Everyone is entitled to the best health care. We should not have these divisions.

There are vested interests in the health area and many problems to be overcome before we can have the just health service we on these benches aspire to. Any person can qualify for free maintenance in a public ward but we give substantial subsidies to those who choose private care. Can we afford, when money is scarce and many areas of the health service are not developed, to channel money to those who seek the privileged position of private care? As Minister I opted to increase the charges for private patients. That was an unpopular move but in my estimation it was the lesser of two evils and better than curtailing services for public patients. To charge private patients the full economic cost of their beds could yield an additional £20 million a year. That would be more just than some of the measures taken which have been brought about by the scarcity of funds at present.

We cannot continue to tolerate the waste and inefficiency of starving community care services of necessary funds. It would be cheaper for the State to care for a sick person in the community rather than in an institutionalised setting. Care in the community with the support of the patient's family, friends and neighbours is more acceptable than the impersonal setting of a hospital or home however sympathetically and professionally well-treated the patient might be. His recovery would be better facilitated in the setting to which he is accustomed without the traumatic experience of having to go to hospital unless medical needs dictate otherwise. That would be a different matter.

In many cases patients could be cared for with greater benefit in the community if community care services were developed to a higher level. It is cheaper for a patient to go into hospital. It costs the State £400 a week but sometimes his family would be unable to afford his drugs and family doctor bills if he were at home. This is an ironical situation. The Labour Party have always supported a free family doctor service to provide necessary medical care without a price barrier and encourage further use of community based services. Almost three-quarters of the health budget is spent each year on institutional care and an increasing amount on glamorous high technology. The community care services still remain the cinderella of the health services. Despite the lip service we pay to the ideal of community care, election promises and the political power wielded by powerful lobbies ensure that we spend money on high technology at the expense of the basic needs of the community.

If cuts have to be made in the health services it makes more sense to defer some of the prestige projects rather than cut back on community care and on grants to voluntary bodies who are in the front line of medical care services generally. I am very concerned that the community care services are not sufficiently developed and that cutbacks will force hospitals, in their efforts to live within their budgets, to discharge elderly patients. As community services are not sufficiently developed such patients could be placed at risk. These are the dire effects of the cuts and measures which health boards might take. I wonder what, if any, other steps the Minister has taken to tackle the abuses in the fee per item system of remuneration for doctors in the general medical services. I made the point — it was not well received, perhaps understandably so — that the number of patient visits per doctor in the general medical services is twice that of Britain under the UK national health services. The rate has increased steadily. Had it been maintained at the 1973 level, savings last year under the general medical services would have amounted to £9 million. Nobody who is working conscientiously within the services need fear an investigation into this. This is something which should be looked into. Vested interest in health needs to be tackled rather than the patient for whom the services exist.

Because various health boards will have different methods of effecting savings and implementing cuts to meet their budgets eligibility for health services will vary in different parts of the country. Some areas will impose charges or close wards while others will cut back on transport. Every board give effect to the views of their board members to keep within their budget. There is no uniform scheme with the result that people in different parts of the country will not know where they stand. There was never complete conformity between the health boards but the situation will be even more confused now and it would be better if there was an overall appraisal of the health services.

It has come to my notice that in one health board area — I assume similar things have happened in other areas — the daily newspaper which was provided free in the wards occupied by long-stay, chronic patients, many of whom had no income, was discontinued. I cannot imagine what difference the price of that paper would make to the budget of that health board. I have heard also that at tea time two slices of bread were reduced to one slice per patient. This is taking things too far. I cannot imagine the present Minister agreeing to that kind of saving. I was told — and I question this — that in the area where the bread supply was reduced and the paper was discontinued, lunch was provided for board members. This is typical of what happens when we are asked to make cuts in our budgets. In certain circumstances it is only natural to play up to people with power and to walk on those who do not have power, but this is very serious when applied to the health services.

When the Minister announced on the radio the 900 items which were removed from the drug scheme he said he was concerned that patients, such as the elderly, the chronically ill, children, pregnant women and so on, were not deprived of essential dressings and vitamins. This might be the last opportunity we will have to discuss the health services here and I would like to ask the Minister to what extent he has been able to operate that scheme and bring about those cuts without imposing hardship on the people I have mentioned. There was a danger that when these 900 items were removed from the drugs scheme patients would stock up to beat the ban. That would be very dangerous.

I read a press statement by the Minister yesterday in which he described this motion as cynical posturing, and spoke about the cuts which would have been implemented had we stayed in power. We budgeted for a year. The worst thing one could do is to give more money to the health boards and then withdraw it. Under the present situation the health boards do not know where they stand. Our tabling this motion was not cynical posturing. As a previous Minister for Health I would not indulge in such a thing nor would I accuse the present Minister of doing so. Our main concern was that essential health care services for the poor and the elderly should not be reduced and that those capable of bearing the burden should bear it. The sentiments contained in this motion would have been expressed by the Labour Party at this stage when the effects of the cuts had become evident whether we were in or out of Government, by whatever mechanism was appropriate. A Labour Minister unable to provide the Government with alternative means of raising funds or lessening the hardship on the poor or weaker sections of the community would have no option but to discontinue as Minister for Health.

I hope this motion will be taken by the Minister in the spirit in which it was put down. It was intended to help him. I understand the difficulty facing any Minister for Health in getting finance from the central Exchequer for a service that is so costly, so labour-intensive and underdeveloped that new schemes, charges and demands are always being made to meet very desirable objectives. It is reasonable that a Minister for Health would require more money but he must ensure that the reductions which must be made do not fall on the underprivileged sections of the community. Our motion will only strengthen his hand. My main concern in putting down this motion was to ensure that there would not be any hardship or suffering by the people I mentioned. There is no cynical posturing involved.

Political reality is that the Taoiseach assured us that whether or not this motion is carried makes no difference to the continuation of Government. Every Deputy is, to a greater or lesser degree an expert in the health area. We should all share our experience in order to bring about a more just and equitable service and to ensure that in time of stringency and cutbacks, the burden does not fall on the sick and the poor.

Minister for Health (Dr. Woods)

I accept the points made by Deputy Desmond about the spirit in which this motion was put down. I am aware that the Fine Gael Party are supporting this motion and using it in the present political situation. For that reason we are faced tonight with very serious issues of credibility.

As a Government the Coalition of Labour and Fine Gael earlier this year decided on measures to bring our public finances into better balance. Deputy Desmond has indicted the role of the Fine Gael Minister for Finance in this process. All of the measures taken were severe but some were so excessive that they were rejected by this House and subsequently by the people. Deputies will recall the proposed 18 per cent VAT on footwear and clothing and the removal of food subsidies. Nevertheless, all parties now profess that difficult decisions must be taken in the national interest to bring expenditure under control and to ensure that funds are available for genuine needs.

The main difference between the actions proposed by the Fine Gael and Labour Coalition and those taken by the present Government relate to the manner, extent and the timing required to bring about the necessary changes. Our approach has not been as harsh as was proposed by our predecessors and it has certainly been more sensitive in its application. How then can Labour with the support of Fine Gael retain any shred of credibility when they put down a motion condemning the Government for taking measures which were less severe than they had themselves decided to take earlier this year.

For example, when I took up office as Minister for Health I found the amount approved by the previous Government to meet the running costs of health services in the current year was £48 million short of what was needed to maintain services at 1981 levels. If one takes the cuts in services which went with that the total figure was £60 million. The measures which were regarded by health agencies as needed to cope with a budgetary deficiency of that magnitude included the closure of hospital wards for lengthy periods; significant reductions in the numbers covered by medical cards; severe curtailment of vital community services such as home help services and meals on wheels as well as cutbacks in services for the mentally ill, the mentally handicapped and other disadvantaged groups. I appreciate what Deputy Desmond said about the position which she might have had to take later in the year.

When I brought the situation to the notice of the Government it was decided that because of the hardships involved extra funds should be provided to ensure that community based services could be maintained at a reasonable level and that large-scale disruption of hospital services could be avoided. For this reason the Government provided an extra £28 million for the health services in the March 1982 budget. This reduced the deficiency in the funds available for health services to £20 million.

When the Government found it necessary in July because of the deepening recession to effect further reductions in public expenditure it was inevitable that the health services, because of the extent of the Exchequer liability in financing them, would have to provide part of the savings needed. The further saving required from the health services allocations was £12 million. Even with this reduction, however, the finances available for the health services were still £16 million above the previous Government's allocation. One must bear in mind that the Coalition Government at the midpoint last year also made cuts and introduced a mini-budget.

One of the areas which has generated most public discussion in recent months has been that of changes in the community drugs schemes. Much of this discussion has been based upon a misunderstanding of the extent and implications of the changes. Equally, however, much of the debate has ignored the origins of these decisions. Therefore, I propose to describe in some detail the background to these particular changes.

From the first of October last most drugs which do not legally require a doctor's prescription have not been available free of charge under the medical card scheme. Many of the excluded items were not, in fact, drugs but were items such as medicated shampoos and disinfectants which, arguably, should never have been included in a scheme of this kind. Furthermore, there was evidence that there was a significant level of abuse of many of these items, including some examples of the re-sale of products dispensed under the medical card scheme. Such abuses served to underline just how questionable was the retention of many of these items in a public health care programme.

Besides the evidence of abuse, the decision to exclude most of these over-the-counter items from the GMS was recommended by the Trident Management Consultants in their report on arrangements for the supply of drugs. That report highlighted the savings which could be made if non-prescription medicines were excluded from the GMS. Their exclusion is, I believe, justified on a number of grounds. First of all, the mast majority of the items in question are very cheap and, in the private sector, many are sold through non-pharmaceutical outlets as part of normal household shopping.

At retail prices the majority of the excluded items cost less than 50p for one week's supply. It is, therefore, unlikely that their purchase would involve hardship for medical card holders. Secondly, many of the items in question are of dubious value to health and a substantial number have no proven therapeutic effectiveness whatsoever. My view on this matter was confirmed by the fact that the professional organisations with whom I had discussions did not oppose the exclusion of the vast majority of the items which were ultimately deleted from the first of October last. The third factor which influenced the Government in their decision was the fact that the supply of these cheap, everyday items through the GMS scheme cost the taxpayer many times their price to the individual customer in a retail pharmacy. The difference was accounted for by a doctor's fee £2.92 which must be paid for each prescription written and the pharmacist's fee, 97p, for dispensing every item on that prescription to a medical card holder. In practice, that dispensing fee was, in the majority of cases, more than twice the level of the ingredient cost of one weeks' supply of these items. In short, not only was the taxpayer funding the cost of cheap items which, in private practice, do not require a doctor's prescription but he was also paying for an extremely expensive method of supplying these items.

Not all over-the-counter items are cheap. Therefore, from the very beginning I ensured that a range of items would continue to be available to medical card holders. This was because I realised that the cost of these items, including PKU foods and Stoma appliances, would represent a major burden on medical card holders. Following discussions with relevant professional organisations I extended the list of items which would be retained in the GMS. The items so retained were selected on the basis of their importance on public health grounds, such as items for the treatment of scabies. I also arranged for the retention of iron and folic acid tablets for expectant mothers, as well as bandages and dressings for use by doctors in their surgeries. The exclusion of over-the-counter items will result in savings of approximately £8 million pounds in a full year. I assure Deputy Desmond that there is a constant monitoring process on these items. I intend to see that there is no hardship involved, although we must face up to practicalities.

No Government and no Minister for Health is happy to order the deletion of items from free availability. I say this simply to underline the fact that the present financial situation obliged all of us to examine those areas of expenditure where economies can be made with least damage to patient care. Because of my natural reluctance to implement decisions of this kind I made every effort to ensure that negative consequences for patients would be avoided. My belief that such would be the case was strengthened by the fact that the representations I received about retaining items in the scheme focuses upon a narrow range of products, the majority of which in fact were retained. Indeed of the total of more than nine hundred items originally scheduled for deletion from the scheme, about fifty have been retained following discussions with the relevant parties. Of course, the vast majority of drugs on the market, some 3,500 items, continue to be available free of charge to medical card holders when prescribed by their doctor. I am satisfied that the savings which will result from this decision will help to secure the future of the GMS scheme which provides patients with a free medical service with full choice of doctor. I am sure that all Members of the House will agree that this scheme is the backbone of our primary health care system and will share my determination to ensure that this vital service will continue to be available to those who need it.

I am, of course, very concerned that in exceptional individual cases the purchase of excluded items may involve hardship. I am satisfied that this will be a rare occurrence. Where it does arise, however, I would encourage medical card holders to contact their nearest health board office with full details of their requirements and difficulties. Health boards have been requested to view such cases sympathetically and they will be provided with the means by which such hardship can readily be overcome.

The impact of this decision is being kept under careful scrutiny and review to ensure that no hardship will occur and I can assure the House of my personal commitment in this regard. Earlier this year incontinence sheets were excluded from the GMS. These cost the taxpayer £1.25 million last year and the quantities used appeared to be excessive. There was also evidence of serious abuse in their supply. This matter is now being investigated by the Director of Public Prosecutions. Meanwhile, I directed that in future incontinence sheets should be supplied by health boards through the public health nursing service. As a result, their cost in the current year will be of the order of £0.25 million. This represents a total saving of £1 million for the State and the taxpayer and I defy anybody in this House to show where any hardship was caused. We could go through all the other items and show the savings that will be made. All the vested interests used the political people in the front to make the appropriate noises to prevent these changes being made. If Deputy O'Keeffe's party want to set about righting the finances of the country they must stand up and do it but without causing hardship. Some of the approach tonight is highly hypocritical. These items will be available to all who need them as part of a comprehensive domiciliary care service. This is an example of the type of saving which can be made without affecting the quality of care received by patients. I believe that the decision to exclude most over-the-counter items from the GMS is in the same category.

The amendment tabled by The Workers Party calls for the re-establishment of the services available to the public under the general medical services scheme and the programme of the health boards to the level and under the terms operating prior to the introduction of the cutbacks and for effecting savings in expenditure through (a) replacing the fee per item system of payment for doctors and pharmacists, by a capitation system of payment, and (b) empowering the National Drugs Board to establish a national drugs formulary to rationalise the number of drugs used and force competition on the drugs companies.

Do I assume that the savings under these two headings are expected to meet the cost involved in re-establishing the services to their former levels? If this is so, then I am afraid that the proposers are mistaken as to the practicality of what they are calling for. The present systems for payment of doctors and pharmacists under the GMS and for the supply of medicines under that scheme were the result of detailed and protracted negotiations with the interested parties concerned. There is no way in which radical changes of the nature proposed could be negotiated or, indeed, even imposed unilaterally in the time scale which would be needed to produce savings of the order required.

As to the change mentioned in the method of payment of doctors, I do not think it would be appropriate to take a view on this matter just now. In August this year I set up a working party representative of my Department, the Departments of Finance and the Public Service, the health boards and the medical organisations to carry out a wide-ranging review of the scheme and its operation. Having regard to the working party's terms of reference, they will consider carefully the present method of payment and make early recommendations to me on any changes which they consider desirable. This approach has already been taken by me and I have had a working party functioning since August of this year.

This aspect of the scheme cannot be treated in isolation. The medical organisations' desire for appropriate superannuation arrangements is a significant new factor in any consideration of the scheme and may well have a major bearing on any recommendations which the working party may make on the future arrangements for payments to doctors under a revised scheme.

Pharmacists are paid a flat fee for their professional service in dispensing doctors prescriptions; they do not get any markup in respect of the drugs and medicines supplied.

The suggestion that the National Drugs Advisory Board be empowered to establish a national drugs formulary to rationalise the number of drugs used and to force competition on the drug companies is not a practical one in current circumstances. We have already prepared a drugs formulary which was devised, under the chairmanship of Dr. Phil Brennan, by representatives of the Eastern Health Board and the medical organisations. The function of this formulary, and of formularies in general, is to encourage good prescribing practice.

In the preparation of formularies, it is customary to give information in regard to the cost of the appropriate prescribing practices which are mentioned. The one which has been prepared has already had a major influence on prescribing practice in the profession and in the hospitals. Formularies are, however, essentially advisory documents and the objective mentioned in the amendment could not be attained unless a decision were taken to restrict the supply of drugs available or to restrict reimbursement of prescribed drugs to a specified list. Current practice in this country, and in most other European countries, is that doctors prescribing is not restricted in this manner. In some countries the reimbursement to patients of prescribed drugs is limited to a specific list. The effect of this is to restrict the freedom of action of doctors and its introduction in this country would be seen as a major intrusion into the professional freedom of doctors. It would also have serious implications for the pharmaceutical industry as a whole which Members of this House will know is one of our major exporters, earning over £600 million of much-needed foreign currencies each year and is also employing over 15,000 people, many of whom are skilled technical and professional personnel. However, I have initiated discussions with the industry to improve the existing purchasing arrangements. Needless to say this information in the formulary will be very relevant to the discussions.

I mentioned earlier my concern to ensure that all were aware of the background to the decisions about funding which had to be taken. I am amazed that members of the former administration have been so quick to condemn the decisions. When in Government they decided on the same course of action. My Department prepared Estimates for 1982 which included provision for savings of £2 million arising from implementation of the Trident Report's recommendations. The previous Government, with a Labour Minister for Health, altered that estimate to increase the savings from implementation of Trident by £4.5 million, making a total saving of £6.5 million. I accept what the former Minister for Health, Deputy Desmond, said about the functions of the Minister for Finance in that regard.

In the short term, the only way such a saving could be made was by deletion of over-the-counter items. Clearly this is what the previous administration intended. It is, therefore, very surprising that it should be the subject of their condemnation. There are, of course, many other recommendations in that report relating to savings in the supply of drugs. I have initiated discussions with the pharmaceutical industry in regard to these other recommendations and I can assure the House that I am anxious to secure the maximum level of savings in this area. The changes involved, however, are such that the necessary discussions cannot be concluded in a short time. However, I am confident that these discussions will come to an early and fruitful conclusion.

The other area of drugs policy in which there have been economies is that of the refund of the cost of drugs scheme. The figure above which monthly expenditure on drugs is recouped by health boards was increased from £12 to £16 with effect from 1 September last. The figure had been last increased in August of the previous year. This was a relatively minor change which, in part, reflected inflation alone. However, the previous administration in their Estimates for 1982 made provisions for savings of £4 million from changes in the refund scheme. Such a saving could have been realised only by increasing the threshold figure from £12 to £20 from an early date. This was the figure included at that time.

This was another element in the Estimate which I inherited as Minister for Health on coming to office. This Government reduced the proposed threshold figure as part of our reappraisal of health expenditure because we considered a figure of £20 per month would cause hardship to some eligible households, particularly those in the middle income group. I have this scheme under examination at present, in common with many other health schemes, to see whether its objectives could be achieved at lower cost. At this stage, however, I merely wish to point out that the previous administration, whose members are so quick to criticise the economies which have now been made, contemplated more severe measures when in office earlier this year.

I mentioned that the extra funds provided for health services in the March budget reduced the deficiency in the allocation for health services to £20 million. The withdrawal of £12 million from the provision for health services in August increased the deficiency to £32 million. I met the chairman and the chief executive officers of health boards in September and sought their co-operation in achieving the target reductions in expenditure and stressed that the measures to secure economies should not cause hardship or distress to the poor and weaker sections of the community.

The co-operation of the authorities of voluntary health hospitals was sought in achieving the necessary savings. I also held meetings with all the authorities of voluntary hospitals and, incidentally, this was the first time they were ever brought together for such a meeting. I am pleased to say that the response, in general, has been very encouraging. The main thrust of the efforts to effect savings has been directed at the hospital area. It is estimated that about 85 per cent of the savings needed will have to be secured in expenditure on hospital services. The main areas of expenditure on which savings are planned are overtime, on-call payments, employment of locums, purchasing arrangements, heating, catering, maintenance and general overheads and in administrative costs.

Many of the major hospitals proposed that moderate charges for public wards and out-patient services should be introduced for patients not covered by medical cards. The House will be aware that I have already responded to the introduction of contributions in respect of out-patient services. Indeed, one board introduced such a contribution very early this year and have been operating it successfully throughout the year. It has worked particularly well and has had a major impact without creating hardship. I advise Deputies to have a look at it before they go too far in their criticisms of relatively modest and moderate measures to contain costs and maintain the services which we want to maintain.

The contribution is at a standard £5 rate and is being applied in respect of both casualty and other out-patient services. Persons covered by medical cards are not being asked to contribute, nor will it apply in the case of emergency cases brought to hospital by ambulance. Many of those who at present turn up at hospital casualty departments could be treated equally well by their own doctor. The contribution can scarcely be regarded as excessive. The going rate being charged by doctors for a surgery consultation is generally higher.

I intend to ensure that no hardship will arise as a result of this payment arrangement for out-patient services. I have arranged for my Department to monitor the situation and, if any changes in the detailed arrangements prove to be necessary on hardship grounds, I will ensure that they are made. This will apply in particular to people who must attend for treatment on a regular and frequent basis; as well as for patients who may need a range of tests and treatments on the one visit.

There is no problem in dealing with cases like this because the total cost of dealing with hardship cases or people in particular circumstances is relatively small. The savings are made on the very big number of people who can quite readily afford to pay £5. That is where the money needs to be obtained. This is one of the measures which was put to me by the hospitals. The measures currently being applied to contain Exchequer outgoings on health services are the result of what can be described as dramatic increases in health costs in recent years.

In 1977 the net non-capital expenditure on health services amounted to £328 million or about 6 per cent of GNP. Expenditure in the current year is estimated at £952 million or about 8 per cent of GNP. It is pretty obvious that something had to be done about the containment of this rate of increase. If we look at increases on a programme basis we find that, in the case of community health services, costs have increased from about £46 million to about £143 million between 1977 and 1982. In the same period expenditure on community welfare services has increased from about £27½ million to £72 million. While a large part of the increase in costs has been caused by pay and price inflation, community based services have been expanded considerably. Nevertheless there are still many gaps and deficiencies. This situation can only be remedied by allocating additional resources to the community area. In the present economic climate extra resources for expanding services can only be obtained from savings in existing services.

It is reasonable to expect that in the organisation and management of a service costing up to £1,000 million there is some scope for saving without damaging the quality of the service being provided. Studies which have recently been carried out indicate wide variations in hospital expenditure levels which cannot be explained by differences in treatment requirements or activity levels. In a study which I have had done recently covering three similar hospitals, for example, it was shown that two of the hospitals spent more than twice as much on drugs per patient as the third. Again we have found that one large general teaching hospital is spending £.25 million more on medicines each year than a similar sized hospital offering an equally wide range of treatment. Studies carried out in respect of psychiatric hospitals with broadly comparable staffing ratios have revealed the existence of quite substantial differences in the levels of overtime payments. For example in two comparable psychiatric institutions staffing in one was found to be 20 per cent higher than the other, but overtime rates were 50 per cent greater. As Minister for Health there is a serious responsibility on me to tackle this kind of problem, and I am doing so. When the smokescreens are left aside, somebody must tackle this kind of problem. Deputy Desmond said in her contribution that she recognises such problems exist. Even in an area such as provisions, which might be expected to confirm to a regular pattern, costs per patient in a number of hospitals appear to be considerably greater than those in similar hospitals. While it is a matter for the medical profession to determine the relative merits of different forms of treatment, nevertheless I am convinced that effective management and rigorous examination of our services can produce savings without disrupting the level and quality of the service being provided.

I have recently established a special unit in my Department to assist the health boards, the voluntary hospitals and other health agencies to meet the problems which they face in living within restricted budgets. The function of the unit is to identify areas where money can be saved. The unit will obtain outside assistance of specialists in the use of management techniques and in their application to the health services. Indeed, one of the features which I found in talking to the voluntary hospitals when I brought them all together was that they said, "We will do it if we are sure that they will do it too". This is the situation we face. Somebody must bring them all together and say that we must have norms and terms, and a great deal of wailing can be expected while that process is going on. That is the process that is seen publicly now because everybody when challenged to get his management in order will put up the poor or the little child in the pram or whatever else and say, "For goodness sake, do not look searchingly into my management because you might find it is not quite as good as it should be". However, that is being done now in a very fair way by providing the supports to the hospitals and the health boards to get down to the brass tacks and to help them to find these within their own resources.

While it would be unrealistic to expect that all savings which must be made in our expenditure on the health services can be achieved in this way, I see this as a most important move to safeguard the real benefits of our health services while we are passing through the present difficult time.

Health services which are effective in prevention or cure result in a healthier and more productive work force. The Government remain committed to the provision of health services that are caring and cost-effective. We want to ensure that the service provided is related to need and that there is an appropriate balance between need and supply.

We are committed to maintaining the fabric of a service that contains within it complementary public and private strands. We believe that it is better to ask those who can afford to do so to make some contribution, however nominal, to the cost of their own health care than to dismantle a service which cannot be fully supported at present by the Exchequer.

The present Government's concern for the poorer and weaker sections of the community and their determination to tackle the social inequalities in our society are evidenced by their decision to establish the National Community Development Agency. The necessary legislation was enacted during the last session of the Oireachtas. I shall be announcing the membership of the agency very shortly.

The agency will be a permanent body with wide-ranging powers to promote and encourage community development and self-help and particularly to tackle areas of poverty and deprivation. It will have a substantial budget from which it will be in a position to make grants available for pilot schemes and innovatory projects aimed at overcoming particular social needs. In order to underline our view that this body should have some "teeth" the legislation has given power to appropriate Ministers to direct statutory bodies to co-operate with the new agency where this co-operation is not otherwise forthcoming.

Despite the present reductions, I am happy to be able to say that we have in The Way Forward a five-year programme for the capital services and this will enable us to carry out very worthwhile developments in the health services and to include for the first time long term plans for community-based services for psychiatric cases and for the mentally handicapped, together with a number of other projects which I have not time to go into here at this stage.

This is not a time for doctrinaire, inflexible approaches, of whatever hue, to the problem of preserving a quantum and quality of care that represents the cumulative work of many Governments and many agencies over a very long period. We are devoting a large part of our resources to keeping up a health service which keeps us among the most developed countries. We are finding it necessary to hold the line at about this level and we are trying to balance need for health care against many other competing priorities for resources. There may well be room for further adjustments in the strategy which we have adopted and on this I have taken careful note of all that has been said both inside and outside this House.

I cannot, however, accept that our strategy has been either excessive or arbitrary. Governments of far wealthier countries have gone further more quickly in curbing expenditure on health services. What has been done had been necessary. It has reflected local opportunities and priorities within broad national guidelines and has been a good deal better than people on the other side of the House were prepared to do at the beginning of this year. Everyone knows and agrees that money must be saved, no-one wants it to be done in his or her area, and in the national interest we must contain expenditure in health as well as elsewhere. The alternative to what we are doing here is to take the option of the right-wing Fine Gael approach which is a harsh, severe and uncaring attitude which was demonstrated clearly in the steps they took at the beginning of this year.

In looking at the motion generally I would like to give my assurance to Deputy Desmond that I appreciate the points she makes and the spirit in which she made her contribution. I give her my assurance that I am reviewing and will review these developments as the end of the year comes up and I am very concerned about the application of them. Some of the points she made are more relevant to the Estimates debate which was to take place very early this time to give an opportunity to say whether the Estimates are adequate for next year and in those Estimates what adjustments should be made. I would have hoped that Deputy Desmond would have been here to help me in that respect in relation to the coming budget. Nevertheless, some of the comments are useful. I give my assurance that as far as review is concerned I am very anxious to review and I accept that point but I do not accept the charge of excessive or arbitrary cuts.

Mr. Sherlock

I move amendment No. 1:

To delete all words after "Dáil Éireann," and substitute:—

"while recognising the need for an efficient health service and, pending a total restructuring and reorganisastion of our present health services, calls upon the Government to:

(1) Re-establish the services available to the public under the General Medical Services Scheme and the programme of the Health Boards to the level and under the terms operating prior to the introduction of the cutbacks,

(2) Effect savings in expenditure through (a) replacing the fee per item system of payment for doctors and pharmacists, by a capitation system of payment, and (b) empowering the National Drugs Board to establish a National Drugs Formulary to rationalise the number of drugs used, and force competition on the drugs companies."

Of all the Government-ordered cutbacks over the past few months those affecting the health services have caused us in The Workers Party most concern because of their consequences in terms of suffering and even possible loss of life. The hallmark of any civilised society should be its treatment of the sick and elderly, yet it is these who suffer most as a result of these cutbacks. The Minister's decision on the cutbacks was typical of the ad hoc approach adopted by successive Fianna Fáil and Coalition Governments in relation to health services. They were started on an ad hoc basis, developed on an ad hoc basis and now they are being cut back on an ad hoc basis. We are opposed to these cutbacks, not only because they are likely to cause suffering but also because they will be inefficient. I cannot believe that the Government's medical advisers did not alert them to the consequences of removing such common drugs as aspirin and paracetamol from the list of drugs available. These two drugs are used for the relief of mild and moderate pain. There is no problem for anyone needing a packet of aspirin to deal with the odd headache. However, these drugs are also used for the treatment of long-term ailments such as arthritis, heart disease and recurrent strokes. Doctors are now faced with the task of telling people who need these simple and safe medical preparations that they must go elsewhere and pay for them and regular purchasing of these preparations would be beyond the capacity of many poor and elderly people. Alternatively, doctors will be forced to prescribe one of the drugs remaining on the list which will be more expensive, stronger and possibly more dangerous. There are many examples which I could list of cheaper and relatively safe drugs being withdrawn.

Most reasonable people will accept that expenditure on drugs must be kept under control, but this can be done without affecting the welfare of the ill. However, the Government have obviously decided that it is easier to confront the old and the sick than the vested interests of the drug companies and medical and pharmaceutical societies. There is no doubt that there is considerable scope for rationalisation in the area of drug prescription. It has been estimated that there are up to 15,000 prescribable drugs available here at present. A huge number of these are the same basic drug under a different name, in a different colour or packed in a different carton.

Some years ago, the World Health Organisation estimated that all medical eventualities could be covered by about 300 basic drugs. Certainly, we estimate that not more than 1,000 would be required. In our amendment, we call for the establishment of a national drugs formulary or list of the 1,000 or so essential drugs needed for the health services. The list would be revised annually and the drug companies should be requested to tender each year for the supply of a particular drug to the health services. Tenders would then be awarded each year, based on cost, delivery date and safety standards. These would then be the only drugs which the doctors would be asked to prescribe. Such a formulary would force price competition on drug companies. At present there is no effective competition between them and the Government, as the largest buyer of drugs, have done nothing to bring about competition. One example will illustrate the point. Penicillin is the most commonly prescribed antibiotic drug in Ireland. At present there are no less than nine companies producing it and all marketing it at the same price.

The Workers Party are totally opposed to the fee per item system of payment of doctors and pharmacists and our amendment calls upon the Government to end it. No advanced country which has tried to introduce a civilised health service, where services are free at the point of delivery, has been able to do it. The fee per item of payment has been a major contributing factor in the spiralling cost of our health services. It has led to the overprescription of drugs, and payments to some doctors by health boards clearly show that there is the potential there for overvisiting. It has produced a goldmine for some pharmacists. Why else do we have three times as many pharmacists per head of population as in Britain? A capitation system of payment would mean that doctors and pharmacists would be paid a particular sum of money for each patient on their books, irrespective of the number of visits or prescriptions issued. The implementation of these two suggestions would effect a major reduction in expenditure on the health service, without imposing the hardship which the Minister's cutbacks are undoubtedly going to cause to the weakest sections of our society — the poor and the elderly.

The reduction in hospital services which has resulted from the Government cutbacks raises serious questions about the standard of patient care now available in hospitals. The effects of the cutbacks have been made even greater because the budgetary reductions forced upon the health boards have been compressed into the last three months of 1982. The indisputable fact is that, arising from these cutbacks, patient care is being adversely affected by the staffing rundown, the reduction in weekend working and the cutback in overtime working. Psychiatric services — for long the poor relation of the health services — have been particularly hit and face even further rundown. Indeed, the trade unions are worried that the reduction in staffing levels in some acute psychiatric wards is so severe as to create a situation of danger for staff and patients alike. If this policy is pursued and if staffing levels are cut, as demanded, by 2 per cent by mid-1983 and a total of 5 per cent by 1985, this will mean total job losses of 4,000 in the health services. Can the Minister really ask us to believe that this will not seriously affect the standard of patient care?

In addition, the arbitrary implementation of unilateral changes has serious implications for industrial relations in the health services. The so-called consultation with the unions has been a sham. Agreements are being set aside, Labour Court recommendations ignored, and working conditions arbitrarily changed. To give just one example — in my own area, the Southern Health Board have increased meal charges for staff from £1.30 to £4 per meal. This has very serious implications for the many low paid workers who are employed in hospitals. In all health board areas temporary staff are being let go and permanent staff are being threatened in some areas.

Dealing with the health board area of Cork, where heating in a hospital in which elderly patients are being cared for is being turned off and patients who were previously getting three slices of bread are now getting two slices, you can say that things have reached an all-time low. At this time, it should be mentioned that successive Governments have perhaps failed to supervise the housekeeping of the health boards in the matter of expenditure of capital. In a recent relevant newspaper report of hospital staff in the Cork area, the following are some examples quoted of abuse of public money: the spending of £30,000 in 1981 on a large air extractor for a hospital kitchen which was only in use for one or two weeks; the spending, about three years ago, of £30,000 for the repair of turf burning boilers, only to have them scrapped shortly afterwards and replaced by two new turf burning boilers at £35,000 each; the spending, two years ago, of £50,000 on X-ray equipment of which little or no use is being made due to the downgrading of the hospital. These are examples of what has been going on.

The health services, and the hospital services in particular, are in need of reorganisation and restructuring, but these are the wrong changes and they are being made at such a speed and in such a manner that patients' lives are being put at risk. The correct thing would have been to approach the trade unions and initiate discussions with them to see how improvements in efficiency could be phased in over the next two or three years. The unions are responsible bodies. They recognise that improvements can be made and I am confident that they would have responded favourably to such an initiative.

The Workers Party are committed to the establishment of a national health service that would be free at the point of use and would be open to all without discrimination. Such a service can be introduced without committing very much additional finance to the health services. In Ireland, the pharmaceutical and medical professions have been allowed to serve their own interests. The paradox is that public expenditure of £900 million, more than 7 per cent of GNP, provides very limited health care services here, though a small proportion of the GNP of the UK provides 100 per cent coverage. The main reason is, of course, that we have an illness service rather than a health service.

We have a young population on whom the future of the country depends. They deserve the best possible health services that can be provided. Our amendment would be a start towards giving them that service.

Mr. O'Keeffe

Fine Gael recognise the need for restraint in expenditure on the health services. Figures speak for themselves, and we accept that when you have expenditure of almost £1,000 million any responsible Government must consider ways and means to find economies. But we say that any measures taken to achieve such economies first of all must be planned carefully. Secondly, the matter must be discussed fully with relevant interested groups, and number three, and above all, we must ensure that the weaker sections will be adequately protected and catered for.

On all three criteria the Government and the Minister for Health stand condemned. In regard to planning, on the basis of the speech he has just made, how can the Minister justify increasing the allocation of funds for health services in March and then cutting it back a few months later? The Minister tried to make a virtue of this, which makes it even worse. Any objective assessment of that approach clearly indicates that the Minister did not know what he was up to.

I will give some examples. Under the present Minister for Health and Government the health boards do not know if they are coming or going. I will take my own region. In March last the health board got an increase of £2.3 million and, lo and behold, three months later there was a reduction of £1.84 million. How in the name of goodness can this crazy planning, or lack of it, be justified? The Minister had the effrontry to come in here to attempt to make a virtue of that. The same applied to all the health boards: in toto, they got an increased allocation of £12 million in March to be followed a couple of months later by a reduction of £9.6 million. The health boards had been managing funds of more than £500 million, trying to organise their budgets, trying to meet constraints that had been put on them and I cannot understand how the Minister can say he gave them the slightest assistance by promising them extra money in March and taking it away a couple of months later.

That shows clearly a lack of planning. We had other examples of this lack of planning by the Minister. In August he produced his famous list of 900. It is quite clear that the list was drawn up with unseemly haste, that the Minister did not have any clear perception of what was in that list. In the original list there were certain items whose sale is covered under the Misuse of Drugs Act. How can the Minister say that any planning went into the drawing up of that list when that happened? It is beyond all credibility.

A second criterion is necessary when one speaks about containing costs in the health services. It is the need for consultation with all the interested bodies, the health boards, the unions who are affected by cutbacks, the medical people, the nurses, the pharmacists. To suggest that such consultations took place on the August announcement is not correct. I have been speaking to the various bodies, and the discussions that took place were not in any way related to the proposals that were produced. Those vague discussions could not be classified as consultations in the accepted sense.

The third and most important criterion is that any cutbacks or constraints must take into consideration the care of the weakest sections first. On that criterion the Minister has failed miserably. He has come in here in defence of himself but he omitted a very major item. I wondered for a while if he was trying to mislead the House in regard to the GMS. The major thing in regard to the GMS this year is that the Minister extended the medical card system to 78,000 extra people without reference to their means. Then he came in to try to justify cutting back available facilities and services to people who had medical cards on the basic of lack of means.

Therefore, the most significant feature of the Minister's speech is what he left out — the people to whom he extended the GMS facilities without reference to their means, without reference to whether their incomes were £10,000 a year or £40,000 a year. Under the Minister's edict they got medical cards. The cost involved this year will be of the order of £8 million. Then, the Minister comes in in an attempt to justify a saving of a similar amount by taking from the poor, the old and those who have been dependent on the GMS over the years.

On that basis alone the Government and the Minister for Health must stand totally condemned. The Minister did not make any attempt — indeed he did not mention it — to defend that decision or to explain to the House a decision as a consequence of which people, without reference to means, can get free services from the State at a cost which is being recouped by cutting back on the services available to the poor and the old.

I do not believe any party in the House can, with any conscience, justify that approach. I reiterate that Fine Gael fully recognise that the escalation in health service costs over the last number of years must be contained. The figure has increased from £372 million in 1977 to £960 million in the current year.

Debate adjourned.