Dáil Éireann debate -
Tuesday, 11 Mar 2003

Vol. 563 No. 1

Health Insurance (Amendment) Bill 2003 [ Seanad ] : Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Nolan

Prior to Private Members' business, I spoke about the new competition in the voluntary health insurance sector. The entry of BUPA into the Irish market has brought some much needed competition into this sector. However, it is only right to acknowledge the part that the VHI has played in medical insurance and the amount of coverage it has given to the public since its establishment in the 1950s. I am pleased that BUPA was not given a free hand when it entered our market and was not allowed to cherry pick the best possible risks as far as it was concerned and only sign up young, relatively healthy individuals and families.

In a broader context, I feel some sympathy for the Minister for Health and Children in trying to tackle the obvious inadequacies within our health service. It is not an easy job for any Minister or Government to try to live up to public expectations. As a population, we are living longer, so the cost of maintaining a strong, viable health service is increasing. We have seen the increased investment in the Department of Health and Children over the past five years in particular. The cost of medicines are increasing by the week. New medicines are coming on the market and are rightly being demanded by individuals. Everybody is entitled to the best possible medical attention and medicines available. Pharmaceutical companies are spending significant sums of money every year on testing new products, so when the products eventually come on the market, this investment tends to be reflected in their price.

Some time ago, I spoke about our health board structure. The health boards were set up in 1971 and 1972, and it is time to look at restructuring them. Some tinkering around the edges took place some years ago in the Eastern Health Board area, but we must look now at how all health boards can be restructured in order to provide a better, more efficient service to the public. I served for a five-year period on the South Eastern Health Board. The regional hospital serving counties Wexford, Waterford, south Tipperary, Kilkenny and Carlow is based on the coast, in Waterford. I can never understand the reasoning behind that. It would make far greater sense to have the regional hospital in a central location within the health board area. Without being parochial, somewhere like Kilkenny would be fairly central. We now have a situation where people on the periphery of that health board area, particularly in my own county of Carlow, must drive 40 to 45 miles to access the regional hospital in Waterford. Some of my constituents would be far quicker travelling to the fine facility in Tallaght, County Dublin.

Other aspects of the health boards also need looking at. Perhaps the Minister and the Minister of State would take that into consideration. Now is the time to do it, given the difficulties being experienced even by Dublin hospitals. Only today it was revealed that the Mater Hospital is closing some of its beds.

The job of the health care provider is becoming increasingly difficult. General practitioners, in particular, and nurses serving in the community and in hospitals are, to put it mildly, run off their feet. They also have to look over their shoulders because of the fear of claims being made against them. This is not doing any good in terms of the quality of service being provided. I know, from speaking to some GPs recently, that they now have to spend a lot of time covering their backs. This is putting additional pressure on our hospitals because if there is any fear of a claim being made at a later stage, the hospitals must cover themselves. Therefore, patients are being brought into hospitals and occupying acute beds when that may not be necessary. Sections within the legal profession should examine their consciences and the role that they are playing in encouraging people to go down the road of litigation. This is not confined to the medical sphere. The significant costs of litigation can also be seen in the area of car insurance.

Weekends place a particularly heavy toll on our medical professionals and general hospitals. Our emergency services, including ambulance staff and accident and emergency units, are put to the pin of their collars in some areas to cope with the needs and demands placed on them by drink-related problems in particular. It is only right to now consider putting a levy on the drinks industry. It is as plain as the nose on anybody's face that the drinks industry has a significant part to play in this, and the cost to the State is enormous. I commend the Minister on bringing this legislation before the House and wish it a speedy passage.

Mr. Neville

I welcome the opportunity to contribute to this debate and welcome the Bill. It is necessary to ensure the orderly provision and application of health insurance. I welcome competition within the health insurance market, and the situation has improved considerably since BUPA established itself here. It is to be congratulated on that. I also pay tribute to the VHI for the excellent service it has given the State since its foundation, and to the man who founded it, the then Minister for Health, Tom O'Higgins, who passed away recently. In any discussion on health insurance, we should recognise the pioneering work of Tom O'Higgins.

We must realise, however, that there is another important aspect to this debate about medical insurance – the two-tier system. Medical insurance exists for those who can afford it, who can access medical provision quickly and who do not need to endure a waiting list for a hip replacement or cataract operation because we can pay. There is another side to the coin, however, and that is the people who cannot afford medical insurance and who must stay on waiting lists for indeterminate periods, sometimes up to two or three years. It is important, in a debate like this, that we do not ignore those who cannot afford health insurance and who have to wait for certain services. I refer to those who cannot afford to go to the Blackrock Clinic or the Mater Private Hospital. I am not debating the existence of private health care, but the public service should match that provided by the private sector.

We should demand equality of opportunity, which does not exist at present, for all citizens in the health service. The political will to provide equality of care, treatment, opportunity and life expectancy does not seem to exist. The fact that 22 beds closed in the Mater Hospital today – there is a threat that another 50 will also close – is an indication of what is happening in the health services throughout the country. The medical profession has calculated that about 80,000 people will be denied care if the present problems continue for another two or three years.

I would like to draw the attention of the House to the area of disability, which was the subject of a debate here last week. It is important that we reiterate and confirm our concerns in that regard. I am pleased the Minister of State, Deputy Tim O'Malley, who is responsible for disability and mental health matters, is present for this debate. I understand that he visited St. Ita's Hospital in Portrane today and I am sure it was a good experience for him. I commend him for making the effort to experience the problems on the ground. I will address this matter in greater depth in a moment.

A recent reply by the Minister for Health and Children revealed that in 2001, 28,705 patients, most of whom were elderly, were readmitted to hospital within a week of being discharged. Consultants have said they are coming under unbearable pressure to discharge patients early to make room for other patients arriving from accident and emergency wards. The money saved by discharging a patient early represents a false saving, however, as an elderly person who does not receive a full cycle of treatment may have to return to hospital if his or her condition deteriorates as a result of going home too soon. A consultant who advises that a patient should receive a certain period of treatment may have to recommend an early discharge to save money. If a patient's second stay in hospital, while recovering from a relapse, lasts longer than the period of time he or she should originally have spent in hospital, the consultant's decision to send him or her home will not have saved money. A system based on such an approach is open to question. The Ministers responsible for health should look seriously at such procedures, which do not save hospital bed days.

The year 2003 is European Year of People with Disabilities. It is an indictment of the Government that those for whom this is supposed to be a special year are being neglected. The budget which was passed by this House in December included a reduction of 8% in the funds provided to local authorities for the disabled person's grant. No new services have been provided for disabled persons as those planned last year will not be introduced.

During the Private Members' debate on this matter last week, the Minister, Deputy Martin, said that the "national intellectual disability database and the physical and sensory disability database are the keys to ascertaining the needs going forward." The Minister was right to make this point, as knowledge is power and planning must be based on the information that is available. There is no national physical and sensory disability database at present, however, so we do not know how many people there are with such disabilities and we do not know their needs. The Government congratulates itself by listing grandiose figures in relation to funding in this sector, which is a sham. The Government will continue to work in the dark until this information is made available. The database I have mentioned will not be compiled this year.

The Midland Health Board received over 700 applications for inclusion in the assessment of needs as part of the process of compiling the physical and sensory disability database. The health board estimated that it would be able to fund an officer to co-ordinate and assess the information. The board made an appointment last year in the expectation of receiving funds this year. Although the co-ordinator is in place, the health board cannot afford to pay staff to survey the 700 people whose needs have to be assessed. This is an effect of the budget cuts.

An Leas-Cheann Comhairle

The Deputy is making a general speech about the health services, rather then discussing the Bill.

Mr. Neville

Like previous speakers, I am highlighting—

An Leas-Cheann Comhairle

Is the Deputy's speech relevant to the Bill before the House?

Mr. Neville

It is relevant because I am highlighting the fact that this Bill relates only to one side of the health service. Those who can afford health insurance can join BUPA and VHI, at a cost of €1,000 per year. If the House ignores those who cannot afford such costs, it is not doing justice to all aspects of the health insurance debate.

An Leas-Cheann Comhairle

The Deputy's remarks should relate to the Health Insurance (Amendment) Bill 2003.

Mr. Neville

My comments are very relevant to the Bill, because I have mentioned those who cannot obtain health insurance.

An Leas-Cheann Comhairle

The general speech made by the Deputy would be more appropriate to a debate on the Estimates of the Department of Health and Children or the budget.

Mr. Neville

These are real issues.

An Leas-Cheann Comhairle

They are certainly issues.

Mr. Neville

Surely the Chair agrees with what I am saying.

An Leas-Cheann Comhairle

The Chair is trying to direct the Deputy to relate his remarks directly to the Bill.

Mr. Neville

I have discussed the Bill, which my party favours, in detail. Does the Chair want me to sit down?

An Leas-Cheann Comhairle

If the Deputy has further remarks to make in connection to the Bill, he should continue.

Mr. Neville

I have remarks to make about people with disabilities, who are ignored in this Bill. No extra funding is being made available for them through insurance or the budget. I do not blame the Minister of State, Deputy O'Malley, who is being denied funding to assist people with disabilities. He will not receive money from the insurance system or the Minister. The leader of the Minister of State's party told me in a letter that considerable funding was being made available to the health services and that a substantial increase of €523 million has been made in the budget allocation to the Department of Health and Children. She informed me that the Minister for Health and Children would decide how the increased allocation is to be applied within the Minister of State's area of responsibility. The Minister, Deputy Martin, gave the Minister of State, Deputy O'Malley, nothing for people with disabilities.

It is difficult for the Minister of State to tell the House why 1,711 people living at home who require full-time residential services will not receive them this year, given that his senior colleague did not give him a shilling to spend in this area. Similarly, 861 people who require a day service and 1,014 people who require a respite service will not obtain such services because of the lack of funding by the Minister for Health and Children. Between 30 and 40 emergencies will arise this year as a result of family problems, such as the death of a carer or parent, but the Minister of State does not have the money to deal with them.

More than 400 people will come out of educational institutions and the Minister has no money to provide them with residential care. There is no point in talking to them about BUPA or the VHI because most of them cannot afford cover.

Few of those with psychiatric conditions have health insurance. The Minister will be aware that Amnesty International declared in recent weeks that the Government is in breach of the Universal Declaration on Human Rights because of the poor services it is providing for mentally ill patients. It stated that the responsibility lay firmly with the Government, not the health services, health boards or any of the service providers. As the Minister of State accepted in a reply to a parliamentary question last year, the State is in fundamental breach of the human rights of those who are mentally ill.

The UN Principles for the Protection of Persons with Mental Illness and for the Improvement of Mental Health Care, which were adopted in 1991, elaborate the basic rights and freedoms of people with mental illness that must be secured if states are to be in compliance.

Article 12 of the International Covenant on Economic, Social and Cultural Rights alludes to "the right of everyone to the enjoyment of the highest attainable standard of physical and mental health." It also identifies some of the measures states must take to achieve the full realisation of this right. Article 23 of the Convention on the Rights of the Child recognises this right for all children and identifies several steps for its realisation.

Documentation on the Principles for the Protection of Persons with Mental Illness and the Improvement of Mental Health Care states:

The MI Principles apply to all persons with mental illness, whether or not in in-patient psychiatric care, and to all persons admitted to psychiatric facilities, whether or not they are diagnosed as having a mental illness. They provide criteria for the determination of mental illness, protection of confidentiality, standards of care, the rights of people in mental health facilities, and the provision of resources. MI Principle 1 lays down the basic foundation upon which states' obligations towards people with mental illness are built: that "all persons with a mental illness, or who are being treated as such persons, shall be treated with humanity and respect for the inherent dignity or the human person”, and “shall have the right to exercise all civil, political, economic, social and cultural rights as recognised in the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights and in other relevant instruments”. It also provides that “all persons have the right to the best available mental health care”.Amnesty International is the most respected international organisation on human rights and has determined that the State has been found to be in breach of the above principles. We are not providing proper rights and the best available mental health care to our patients.

In addition to the UN mechanisms I have outlined, Ireland is also bound by certain human rights principles laid down by the Council of Europe. We are not complying with these either.

Many people with mental illness will be best served by community based systems. We examined the mental hospitals and saw that they were overcrowded. We then reduced the number of in-patients substantially but did not provide proper community based care for those with a mental illness. For example, a 1999 study of the problem in the then Eastern Health Board area, We Have No Beds, found that the lack of community alternatives led directly to the inappropriate occupancy of almost half of the available acute beds by patients not requiring acute hospitalisation. Two thirds of the patients inappropriately occupying acute beds in the psychiatric service could have been placed elsewhere had community based residential facilities been available.

The report also found that one consequence was "an increasing number of reports of EHB psychiatric services which had no beds for patients who were acutely ill and who needed hospitalisation". Another was the emergence of "a system of borrowing beds for short-term purposes from one service by another", an arrangement described as "unsatisfactory for patients, representing poor quality of service delivery to acutely ill persons".

The Minister of State should note the number of geriatric patients in psychiatric hospitals, most of whom are not in need of psychiatric care. They need geriatric care and should be in an appropriate facility. The Eastern Health Board also concluded that in a subsequent Government commitment to create 850 hospital beds, none was allocated to the mental health services. Meanwhile, there have only been small advances in community alternatives to hospitalisation.

An Leas-Cheann Comhairle

The Chair has a duty to point out that what the Deputy is saying bears no connection to the Bill before the House.

Mr. Neville

BUPA and the VHI will not assist the people I have mentioned.

An Leas-Cheann Comhairle

The Deputy's contribution bears no relevance to the Bill.

Mr. Neville

The insurance system does not cover these people.

An Leas-Cheann Comhairle

The Chair is quite clear on the fact that what the Deputy is stating bears no connection with the provisions of the Bill before the House.

Mr. Neville

I will sit down.

An Leas-Cheann Comhairle

The Deputy's time is up.

Mr. Neville

I am sorry the Chair is cutting me short.

An Leas-Cheann Comhairle

I did not cut the Deputy short.

Mr. Neville

Whenever anybody decides to discuss mental health, everybody turns off, including the Chair.

An Leas-Cheann Comhairle

Anybody from either side of the House looking at the record of this debate will see that the Chair gave more than extremely generous latitude to the Deputy.

Mr. Ardagh

Deputy Neville has developed a very loose relationship between the heads of the Health Insurance (Amendment) Bill 2003 and many aspects of the health service. I refute his statements comprehensively.

The principle of community rating is developed on the basis that everybody is looked after, young and old, rich and poor. The Government is investing almost €9.2 billion in health this year, representing an increase of €970 million. This is a 12% increase on the 2002 Estimates, which benefits both insured and non-insured. Since 1997, the overall increase has been 162% or €5.7 billion.

Ms O. Mitchell

Tell that to those losing their jobs in the Mater Hospital.

Mr. Ardagh

I will address the issue of acute hospitals in a moment. Compared to 2002, spending in 2003 is up by 12.4% or €952 million.

Ms O. Mitchell

We never doubted the Minister's ability to spend money.

An Ceann Comhairle

Allow the Deputy to speak without interruption.

Mr. Ardagh

In the past four years there have been significant results and record levels of activity in all the acute hospitals. A range of additional services have also been provided through the major care programmes. In the four years from 1997 to 2001 the per capita spend on health moved from fifth from the bottom of the EU league table to just above the EU average. The National Development Plan 2000-2006 is providing over €2 billion to the health services which will benefit every major care programme. The total overall represents a trebling of investment over the last seven years.

The two-tier medical service mentioned by Deputy Neville does not obtain in Dublin's acute hospitals where services are provided on the basis of need. I am in a position to make that statement as a board member of St. James's Hospital. The national health strategy sets out a programme of investment and reform that will continue over the next decade. It provides for the largest expansion of bed capacity in the history of the health service through the commissioning of an additional 709 acute hospital beds for public patients. A total of 520 of these beds were made available in 2002 and the remainder will come on stream this year.

Ms O. Mitchell

They are being closed.

Mr. Ardagh

I am a member of the board of St. James's Hospital where 74 of the beds in question were commissioned in 2002.

Ms O. Mitchell

They are being closed this week.

Mr. Ardagh

The pressure has been taken off accident and emergency services, while elective and non-elective surgery waiting lists have been dramatically reduced by the strategy put in place by the Minister for Health and Children, Deputy Martin—

Ms O. Mitchell

He should be canonised.

Mr. Ardagh

—and his Minister of State, Deputy Tim O'Malley. Following the Minister's winter initiative of 2000-01, 17 accident and emergency consultants were appointed in a permanent capacity at acute hospitals. The establishment of 24-hour GP co-operatives as part of the strengthening of primary care will help to reduce the demand for accident and emergency services while ensuring the appropriate treatment of patients. An additional €10 million is being provided this year to develop primary care facilities including GP co-operatives.

Ms O. Mitchell

The provision this year is €2 million.

An Ceann Comhairle

Deputy Ardagh should be allowed to speak without interruption.

Ms O. Mitchell

He is fantasising.

An Ceann Comhairle

Deputy Ardagh should be aware that the title of the legislation under discussion is the Health Insurance (Amendment) Bill. While I will accept passing references to the health service, detailed debate on its day-to-day operation is outside the scope of the debate.

Mr. Ardagh

I accept your ruling, a Cheann Comhairle, but before you entered the House Deputy Neville criticised acute hospital services. Deputy Olivia Mitchell continues to do so and it is necessary for the Government side to refute those criticisms.

In 2002, there were 964,000 in-patient and day-patient discharges from acute hospitals. That means 2,600 patients were discharged for each day of the year which corresponds to an overall increase of 5% on the number of discharges in 2001. There was an increase of 13% in the number of day cases between 2001 and 2002. The Mater and Beaumont Hospitals are only two of five acute Dublin training hospitals. Other hospitals operate within their budgetary constraints because management, nurses, doctors and consultants work together free of the impression that there is money behind every cloud. Over the last five years, the investment in acute hospitals has led to new initiatives to improve operating theatres and equipment and to provide care for diabetics. A great many doctors, nurses and consultants have been appointed. There is a national shortage of money, but some hospitals are able to cope with their budgets while others scaremonger.

Ms O. Mitchell

How did we fail to realise that it was the hospitals' fault?

Mr. Ardagh

They are spinning circumstances in a way that is emotionally attractive to certain people in the media and their readers.

Ms O. Mitchell

It is what doctors do all the time. They have nothing better to do than spin.

An Ceann Comhairle

Deputy Mitchell made her contribution and it is important that Deputy Ardagh be permitted to do the same.

Ms O. Mitchell

I stuck to the content of the Bill.

Mr. Ardagh

I am sticking to it and responding to Deputy Neville.

Mr. Neville

I have no problem with the Deputy doing that. I do not agree with him, but I support his right to make his point.

Mr. Ardagh

In 2000, the Irish Society for Quality and Safety in Healthcare published a survey of patients, 96% of whom were satisfied or very satisfied with the quality of care they received.

Deputy Neville and Deputy Olivia Mitchell referred to hospital waiting lists. The number of people on such lists decreased by 14% between September 2001 and September 2002.

Ms O. Mitchell

That is because two lists were created.

An Ceann Comhairle

Deputy Ardagh should be allowed to speak without interruption.

Mr. Ardagh

As a member of the board of St. James's Hospital, I receive the figures on a monthly basis.

Ms O. Mitchell

The Deputy receives two sets of figures.

Mr. Ardagh

I have seen the lists grow shorter month after month as a result of the strategy and investments of this Minister.

An Ceann Comhairle

I request the Deputy to return to consideration of the Bill rather than continue to address queries raised by Deputy Neville.

Mr. Ardagh

Deputy Neville made particular reference to intellectual disability and autism services as well as to mental health services. In 2002, services for people with intellectual disability and autism were expanded with the provision of over 100 residential places, 75 respite places and over 500 day places. There has been further enhancement of specialist support services. All health services have been improved in the last two to three years as a result of work initiated in 1997. The extent of annual improvement has engendered an expectation of significant increases in subsequent years.

Ms O. Mitchell

It is the public's fault.

An Ceann Comhairle

Deputy Ardagh without interruption.

Mr. Ardagh

While we do the best we can, it is an unfortunate fact that such improvements cannot be made every year.

Mr. Neville

People are being treated in ambulances.

An Ceann Comhairle

Deputy Ardagh should be allowed to speak without interruption. Deputy Crawford will be speaking shortly and I would not like to think he will be interrupted in the same way.

Mr. Ardagh

I join with Deputy Neville in congratulating the VHI whose work I acknowledge. I did not realise its founder was a former Member of this House, Tom O'Higgins, to whose family I extend my sympathy on the occasion of his death. The VHI is a non-profit company which has proved most effective in providing much needed services and we owe it and the hospital administrators who work with it a debt of gratitude. It has been very good for the country. BUPA was a welcome entrant to the health insurance market and I would like to see more companies coming in.

Ms O. Mitchell

The Deputy will not see them if the Bill is passed.

Mr. Ardagh

BUPA provides new services and looks at the market in a different way. It creates competition and encourages people to purchase private insurance to cover their own costs.

I am in favour of community rating and risk equalisation. The insurance company must charge the same rate for a given level of service, regardless of age, sex or health status. All adult subscribers pay the same amount for the same benefits. Community rating guarantees life-long affordable health insurance for the Irish people because the young support the old and the healthy the sick. Irish people acknowledge and understand this system. Community rating has been the policy of successive Irish governments and it is supported by all parties and the public. I did not realise that Deputy Olivia Mitchell was opposed to community rating or risk equalisation.

Ms O. Mitchell

The Deputy did not listen. I support community rating.

Mr. Ardagh

Does the Deputy support this Bill?

Ms O. Mitchell

I support community rating. I support limited risk equalisation. Perhaps the Deputy was not listening.

Mr. Ardagh

I am glad the Deputy supports it. I am also in favour of risk equalisation because of the competition in the market. It brings stability to the market. When the market steadies all the insurance companies will have the same number of claims and risk equalisation will then become unnecessary. I believe it is still very necessary at the moment.

Ms O. Mitchell

Why is it not in the Bill?

Mr. Ardagh

Risk equalisation is a subsidy paid by one insurer to another. Its objective is to transfer funds from insurers with better claims experience to those with a poorer claims experience because of the age and health profile of the customers. It sustains community rating by ensuring that the young and healthy support the old and sick regardless of which insurance company they join. It protects the stability of the market and discourages insurers from targeting the young and healthy. I do not like the term "cherry-picking" but I like the idea of BUPA entering the Irish market and encouraging new people to look after their own health insurance costs.

The EU has a long-established common good principle which accepts a community rated system of health care insurance supported by risk equalisation. The third non-life directive allows Governments to require health insurers to sell policies which are community rated and to participate in risk equalisation schemes sometimes referred to as lost compensation schemes. If risk equalisation is not applied or if its application is further restricted, community rating will collapse and insurers with young members will make unfair extra profits. These profits arise because those insurers are not paying their fair share of the community's claims costs. If risk equalisation is not applied, insurers with older, less healthy customers will carry a higher share of claims, generate lower profits and face eventual collapse. We do not want to see this happen in the Irish market.

Without risk equalisation, community rating is distorted; the young no longer support the old and the healthy no longer support the sick. All health insurers will target young, healthy members to the disadvantage of the older and sicker people. Health insurers with young members would make big profits while those with older members would incur big claims costs. The market becomes unstable, insurers with older members eventually go out of business, community rating collapses and premia for older and sicker members become unaffordable, putting further pressure on the public system.

Both BUPA and VHI have put forward their arguments about risk equalisation. BUPA believes that risk equalisation is being pushed by the VHI because its structure guarantees it a subsidy and insulates it from competition. I believe that risk equalisation is focused on the protection of community rating and allowing the old and the sick to afford health care by offering them a pre mium which is the same as that paid by younger members. It is hoped that risk equalisation will cause the market to become more experienced and stable and then it will no longer be necessary. BUPA also claims that risk equalisation has nothing to do with community rating. It says that it purports to equalise claims but does not attempt to equalise revenues or insurers' overheads where the monopoly has huge advantages.

To encourage new insurers to come into the market, marketing and overhead costs should be taken into account in relation to the risk equalisation scheme. BUPA also argues that risk equalisation discourages new entrants into the market and creates unbearable risks for competitors. In reality a major goal of risk equalisation is to create the stable market and that will allow for real competition where the competition is in the marketing of the product.

Elderly people have particular concerns about health insurance. Everyone over 70 is now entitled to a medical card so people of that age no longer have to concern themselves to any great degree with private health insurance. Older people have been very well looked after by the Government. Additional revenue funding of more than €26 million has been announced for services for older people in 2003, including palliative care services and the nursing home subvention scheme with the provision of additional home helps. Improved community-based services and the services provided in community hospital and day care centres have been of great benefit to the elderly. The Minister for Health and Children, Deputy Martin, recently announced the development of the pilot public private partnership programmes for community nursing units. These developments will ultimately provide about 850 additional long-term beds. This demonstrates the commitment of the Government to health services for the elderly.

I confirm to medical card holders that they will not lose their cards because of increases in social welfare rates that would put them beyond the income guidelines. Chief executive officers of health boards were asked to ensure that medical card holders and applicants were made fully aware that the increases in social welfare payments would not disadvantage them when applying to hold or retain a medical card.

Mr. Crawford

I wish to share my time with Deputy O'Dowd.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Crawford

I welcome the opportunity to speak on this Bill. It deals with the issue of risk equalisation and providing funding for the Health Insurance Authority. There are many other issues which need to be dealt with. I note that the Taoiseach and others in the House recognised that the late Tom O'Higgins established the VHI when he was Minister for Health. VHI was designed to be community rated and community based so that all ages were entitled to the same charges and treatment. That was extremely important and it has been carried on through the introduction of BUPA. We must preserve what is good but we must also allow for competition. Given our membership of the EU and the open market that exists, it worries me that after all these years only two health insurance companies operate in Ireland. It is becoming obvious that more and more people will need health insurance because of the failure of the Government to provide the services many people need.

In the recent past, the Minister and the Taoiseach promised a world class health service. We heard a few weeks ago about the cutbacks in the service at Beaumont. This week we heard about the reduction in the number of beds in the Mater Hospital, which sends a shiver down the spine of those of us who care. I do not question that the Minister cares about the health of the people. What happens in Beaumont and the Mater is extremely important to people living in the Border area. While some people may have insurance cover, others have not. If fewer beds are available in hospitals such as the Mater, people on waiting lists in the more peripheral areas such as Cavan-Monaghan and along the Border will not be given the priority they deserve. The situation is more worrying in light of the fact that Monaghan General Hospital is still off-call officially. One sometimes feels it is more like a third world health service than a world class service whereby people must go in the back door rather than the front. I hope the situation in Monaghan General Hospital will be rectified sooner rather than later so that patients can have the maximum care available, either private care or public health care, whichever is relevant, as close to home as possible.

Where is the logic in the North Eastern Health Board sending public patients from Monaghan to private hospitals in Mullingar when surgeons and medical staff are in place in Monaghan General Hospital?

An Ceann Comhairle

I must point out to the Deputy that we are debating the Health Insurance (Amendment) Bill. While reference to the health service in general is acceptable, detailed discussion of the health service as in the health Estimate is not acceptable under the Bill.

Mr. Crawford

It is vitally important because the whole insurance issue is based on cost. VHI charges increased dramatically a short time ago. I know the Minister increased the cost of beds to the VHI by 40% or 45%, which allowed it to increase the cost to customers by 18%. That is why I am referring to the need for more competition so that there will be a better insurance price structure.

I must tell a short story in relation to the VHI increase. I received a letter from an aged couple who are members of the VHI and who benefited from the equalisation clause. What really annoyed them was that while VHI costs increased by 18%, they received a bill for a private ambulance from their home in north Monaghan to Dublin at a cost of 3.5 cent per kilometer. Two and a half years earlier, a health board ambulance transported his wife from the same area to Cavan hospital on two occasions at a cost of ten cent per kilometer, three times more. One must ask how the VHI can sustain these charges from health boards and remain in business? This issue must be looked into in detail because it is not justified. I raised the question at the time. Luckily, some people got medical cards approximately 18 months ago on the instigation of the Minister. That scheme cost €52 million rather than the projected €90 million. Given the state of the health service, some people who opted out of the VHI are extremely sorry. Patients have not received the medical service they expected under the scheme.

That leads me to the issue of subvention. If we are serious about the health service, we must ensure people are moved out of hospitals to curtail costs as much as possible. People must be allowed into nursing homes if there are vacancies. The only way this can happen is if subvention is made available. I asked the Minister a general question and I received some replies from health boards. However, the reality is that there is a waiting list for subvention in the North Eastern Health Board area and people do not receive it when they need it. This is a desperate situation. It is costing insurance companies much more because people who could be cared for in nursing homes are being retained in hospital beds. I heard someone speak on radio about the situation in Beaumont and a nursing home operator rang saying she had 53 beds lying idle in Swords. These would cost approximately as much per week as Beaumont would cost per day. These matters must be looked at if we are to try to maintain insurance costs at a realistic level. Is it cost-effective to export patients for treatment? While Monaghan General Hospital may be able to perform minor surgery only, is it cost-effective to send patients to England for treatment, including paying for their family to go with them? I am not sure how that can be justified in this day and age.

In November 2001, someone close to me was extremely ill with ear problems. She could not even touch the side of her head and was rushed to Drogheda, where they promised to put her on an emergency waiting list. She went privately afterwards and received a letter the other day stating that she could be dealt with under the special scheme of going abroad. That notice took from November 2001 to March 2003. That person was extremely ill and recognised as such by a specialist in Drogheda hospital. We must be realistic in regard to the health area and minimise costs. Several Deputies on the Minister's side referred to the generous budget. I am not arguing about the budget. Some €9.2 billion is a huge sum of money but the problem lies with how it is spent. Fine Gael will support any savings in the system as long as patients receive a good service.

Mr. O'Dowd

This is a very important debate. I would like to identify some areas where I believe insurance needs are greater than are currently met in terms of our system of organisation. Medical cards in themselves are an insurance policy against medical costs. People with medical cards who are ill, particularly those who are seriously ill, can meet their doctors' fees, the costs of prescriptions and so on. If one happens to be a politician or whatever, one can afford to meet his or her medical costs. One can also afford VHI or BUPA payments. However, a significant number do not fit into either category. Generally, they earn the average industrial wage, yet they cannot afford to pay for the long-term treatment of illnesses, such as asthma, or frequent visits to doctors.

When the economy is doing well the percentage of those in receipt of medical cards drops, as has happened in the last few years. In the past three or four years, the numbers in receipt of cards in the North Eastern Health Board dropped by 4% or 5%. There is an agreement between the health boards and the medical profession to the effect that greater numbers will be treated without the necessity to renegotiate their contracts. This means that agreement can be reached on treating those on low income who cannot afford the cost of health insurance and who are ineligible for the receipt of medical cards. This aspect should be addressed as a matter of urgency.

In compiling a recent risk management consultant's report on the problems in the North Eastern Health Board, with particular reference to the Cavan-Monaghan hospital group, interviews were conducted with staff who said that private patients were being admitted for treatment to the hospitals through the accident and emergency units and that this discriminated against those who were not private patients. Access to health care should depend on need and there should not be a back door for private patients. That should be addressed. Will the Minister indicate if he has seen the report and, if so, will he outline his views on it?

Many people in hospital need time to convalesce in nursing homes. I understand that the VHI provides cover for such care for up to two weeks or slightly longer. However, many patients need to spend a longer period of time convalescing. Given the changes in society, where extended family support is no longer available, those leaving hospital who are not well enough to go home often do not have adequate insurance to cover the full extent of their convalescent stay in a nursing home. This aspect must be addressed in the interests of the insured person.

Approximately two weeks ago, 14 people in acute hospital beds in County Louth who were not well enough to go home and needed convalescent care, were unable to get the local health board to process their application for subvention because it was restricted by the amount of money it had spent on subvention in the previous year. They were holding up acute hospital beds because they were unable to fund the gap between what their insurance provided and the nursing home required. This is a serious issue and it must be addressed.

There is a need to consider nursing home care in the long-term. Those availing of private health cover should be encouraged to pay for such care from an early age so that the cost can be spread over many years. This type of cover should be kept separate from the other types of cover provided by private health insurers, whether it be for acute illness or whatever. Over the coming years, many more people will live to a greater age and they will be required to spend much more time in nursing homes than is the case at present. There is no insurance provision for this contingency. It means that people must save or invest in their homes as a form of insurance policy. It is time that direct insurance cover was provided to cover this aspect. When people do not have the cash or the cover to pay for such long-term care, the health boards will liquidate their assets, which in many cases is their own home. While I accept that people must pay for their care, this type of arrangement often deprives children of their parents' family home. This aspect must be addressed. I commend the Bill and look forward to the Minister's reply.

Mr. Ring

When the House returns from the St. Patrick's Day break, it must hold an extended debate, over two or three days, on health. It would give Deputies the time to address all the issues and the Minister the opportunity to advise the House on what is happening. There has been an assumption among VHI and BUPA policy holders that they would receive immediate hospital treatment, but that no longer applies.

Is the Minister concerned about BUPA's complaint to the EU Commission on risk equalisation? What are the implications if the Commission rules against the Government? I support the Minister's position on the VHI. We cannot allow insurance companies to target those who are least at risk, such as the young. We must ensure that insurance cover is provided to all age groups. In view of this, I support the legislation. While we may criticise the VHI, it must be acknowledged it has done excellent work in providing insurance cover. All necessary measures should be implemented to protect its position in this country.

I live in the Western Health Board area and am my party's deputy spokesperson on health. Will the Minister explain why last July, the board declared it had a budget deficit of €16.6 million, yet at the end of this year it emerged with a surplus of €8 million? It implies that the board saved €24 million in one year at a time when there were cutbacks across all services. It is indicative that something is wrong with the country's health services.

It may now be time to choose between public and private hospitals. Consultants may have to be paid more, provided all their work is done for public hospitals. The State may have to make an investment in private hospitals to get them up and running. Perhaps we should forget about insurance altogether and have one hospital system where people are called according to need whether they have insurance. Maybe we should try to start at the beginning in regard to health.

I have listened to the debate, as has the Minister. In regard to health boards, we have created a monster that has got out of hand. There was never as much money spent on health, yet the crisis was never greater than in the past few months. Something has gone wrong. There are bed managers and all sorts of managers running the health service. The time has come to get rid of the health board and consultants. The Minister laughed at me three years ago when I said that it should all be scrapped and he should start again at the beginning. We might have had three or four years of hardship but we would at least take control of the health service again. The people might then appreciate what we are trying to do.

What have we done instead? We have created bigger monsters with the health boards, programme managers and bed managers etc. I asked a parliamentary question recently about the number of people employed in my area's health board. The number of jobs that have been created is phenomenal but things are not happening on the ground. People cannot get the services they need. We have seen this in regard to BreastCheck. In the next couple of weeks we will have to take to the streets to demand services. BreastCheck is available in certain parts of the country but not in the west. All that is needed to deal with the situation is €15 million. What is €15 million when compared with the Minister's overall budget in the Department of Health and Children?

The situation now is that there is a problem regardless of whether people are insured. Somebody must take on the problem and deal with it. We can be critical on this side of the House. I listened to Deputy Ardagh and I would only love to send a copy of his speech to his constituents. If I did, he would not dare stand in the next county council election, not to mind a Dáil election, because those constituents would wipe him off the ground. I must say that about this sort of hypocrisy in defence of the Government.

I have nothing against the Minister as a person. He is a fine guy and does his best but he has lost control. That is not his fault. His predecessors have helped the situation get to this stage. We have taken too much power from this House and given it to people outside who are not answerable to anybody. Last year the Minister, at least, went before the interview board which gave him the best vote in the country. He can be judged again in four years' time. The Minister will have to make a judgment on the chief executive of the Western Health Board in a short time. I hope he makes the correct judgment. I will not advise him what judgment he should make but if I was in his position I know that—

An Ceann Comhairle

As I pointed out to the Deputy's colleague, this is a Health Insurance (Amendment) Bill. While a passing reference to the operation of the health service is acceptable the Deputy should come back to the Bill itself.

Mr. Ring

I will try. I will not have a row at this hour because I want to be here for the Social Welfare Bill tomorrow and do not want to be put out.

Mr. Martin

Is the Deputy running out of energy?

Mr. Ring

No, I am full of energy. The proposals in the legislation are technical. The point I want to make relates to health insurance. Is it worthwhile any more, considering the health service we have? I listen to people who are waiting for procedures and who have paid their dues to VHI and BUPA but who cannot get the services they need. This country has got it right in regard to health insurance in spite of complaints to Europe and elsewhere. The Minister must make sure health insurance is available to everybody. We do not want to have a situation such as exists in other insurance areas where the cream is taken and the rest are left.

It is a bit like roads and services, like Luas and other services. Dublin gets the services but rural Ireland does not. There is nothing wrong with subsidising services for people who need services. There is nothing wrong with the State supporting and assisting the VHI. We are not taking away from BUPA but it cannot just come in and take the cream and walk away. I support this Bill.

There is a major crisis in the health service and we need debate on it. The people are outraged by what is going on. The Government gave commitments before the recent general election and I want to know what is being done about those commitments. What is happening in the Minister's Department? What is he doing about the health service and what are his future plans? Will he implement the reports on his desk? Will he take on the health boards and will he provide a service of which the people can be proud?

Every night on the media we hear of the crisis. The people working in the service are under pressure and cannot stick it any longer. Something must be done and we depend on the Minister to do it. The Government gave a commitment and told us the money would be put in place. I hope it will be done.

Minister for Health and Children (Mr. Martin)

I thank all the Deputies who contributed to this debate. It was a broad and informative discussion that sometimes moved across the broad canvas of health issues. I will deal with some points raised by Deputies at the outset of the debate. Deputy Mitchell was critical of the risk equalisation provision. Risk equalisation is not a penalty on an insurer. It is an equity measure for the benefit of the whole market. It has been examined thoroughly by a number of bodies, including the Society of Actuaries who found it is an essential concomitant to community rating. Various parties in the House have supported the concept of risk equalisation.

In regard to the question of the HIA's powers being limited by the change to section 12 (4) of the Principal Act, I want to clarify that the amendment was sought at the request of the HIA itself. The HIA has specific powers under the Principal Act to give advice to the Minister on matters relating to its functions under section 21 of the 1994 Act. It also has specific powers under section 11 of the 2001 Act in regard to reporting on the operation of risk equalisation with respect to its effects on the interests of health insurance consumers once transfers have commenced. It is obliged to make annual reports to the Minister on the operation of risk equalisation and the Minister is obliged to lay such reports before the Oireachtas. The provision of this Bill does not affect that section.

The risk equalisation scheme will, in the first instance, only require data returns to be made by insurers. It will not require the making of financial transfers initially. Any commencement of financial transfers are a matter in which the Health Insurance Authority will be critically involved. The 2001 Act sets out its functions in detail in this regard and it does not subordinate the Minister's wishes. I wish to make that clear to Deputy Mitchell. Inefficiencies will not be transferred as the scheme is designed so that insurers retain their own average cost per claim. Insurers are not fully compensated for claims, therefore the scheme does not incentivise claims.

Deputy Mitchell was concerned about the impact of risk equalisation. The measure envisaged is moderate and balanced. The effect of any commencement of risk equalisation under the proposed scheme will be to make financial transfers, via the Health Insurance Authority, from insurers with a better than average risk profile to insurers with a worse than average risk profile. This will leave the former with an outcome which more closely reflects what the experience would have been if they had a more equitable share of the market risk. It thereby supports the application and stability of community rating across the insured community as a whole. Only the insurers' age and gender profiles will be adjusted to reflect the market experience. Other key cost drivers such as numbers covered, benefits promised and claims management will remain unchanged.

Risk equalisation affects the equitable sharing of risk profiles between insurers by replacing an insurer's own profile with the market average profile within defined agents and their gender bands. Looking at risk equalisation on an agent-gender basis it is evident that its impact on the key drivers underlying an insurer's own claims experience is no more than is appropriate and proportionate in a community rated market.

Deputy McManus raised a number of key issues. The amendment on the exemption from risk equalisation is precautionary. The possible difficulty was identified during the course of detailed consultations with the Health Insurance Authority on the development of a detailed scheme. The Bill provides for an extension of the Act with regard to immunity for the Health Insurance Authority. This was specifically sought to enable it to undertake its independent functions under the Act and scheme to be introduced. The highlighting of this matter followed the establishment of the authority and consultations with it. I welcome the Deputy's support for the need for risk equalisation to support community rating.

Deputy Connolly welcomed the Bill and his supportive comments on community rating and risk equalisation were noted. Deputy Cowley was critical of the role of private health care within our system. Private health insurance has been an important element of overall hospital care provision since it was introduced by the late Tom O'Higgins in 1957 and due regard and credit has been paid this evening to the important decision that was taken at that time. Allowing individuals to provide financially for their own health care needs has the impact of displacing demand on the public health system. However, it needs to be pointed out that there has been a massive increase in the level of public investment in health over recent years.

Many comments were made during Second Stage about the general health system and the issue that emerged today in regard to the Mater Hospital. There have been significant increases in health spending. The health portfolio does not just involve the hospitals, it has a broad remit. Over the past five years there have been almost unprecedented levels of funding under every heading, particularly in areas that were starved of funding in the past, such as mental health, disability and child care. Previously these areas had never received a decent allocation of funding. There has also been a significant increase in the funding of the acute hospital system in the past two to three years since we devised the strategies to improve their status.

Cumulatively since 1987, some €400 million has been invested in the area of cancer care. In reply to Deputy Ring and other Deputies, we are improving the quality of care for cancer patients. The quality of cancer care today is far superior to anything we experienced five or ten years ago. The number of procedures has increased dramatically in all hospitals, as has the number of professional consultants dealing specifically with cancer issues over the past four years. We can talk the health system into a crisis as long as we want but those facts cannot be dismissed.

Mr. Ring

We are not the ones saying it.

Mr. Martin

I accept that there are other issues.

Mr. Ring

It is the professionals on the ground who are saying it.

Mr. Martin

I am not making those points in an argumentative way but in an objective, factual way.

Heart disease is one of the biggest health issues in the country and the Government decided to target such issues in a strategic way. Ultimately it is only by tackling the big killers in the country that, in time, we can reduce mortality rates. That is the ultimate measurement of the success of the investment over the past five years – the dividend in regard to a reduction in morbidity from heart disease and cancer which are the two big killers. Time will show that a significant degree of that investment has been well made and effective.

It is also important to point out – and I share Deputy Ring's concerns – that there are major reform packages coming down the tracks. There are also major reports nearing completion which will be brought to Government and to this House for subsequent discussion. I would welcome a wide-ranging debate on health. Perhaps the Oireachtas can look at the issue collectively.

There are issues pertaining to how budgets are managed. In 1996 the rainbow Government introduced the accountability legislation into this House, which we supported and continue to support to try and bring some kind of accountability, certainty and consistency to the service – and that applies to all of the major agencies, health boards and hospitals. The legislation provided for a first charge on the subsequent year if one went over budget, which can create a difficulty, as has happened this year with some of the hospitals in the Dublin region where there was significant overruns on last year, despite the fact that last year's increase was well over €1 billion.

This year, after the publication of the revised volume of Estimates, we were faced with another increase in health spending of some 12%, which is significantly higher than the original November Estimate. One may well ask why that is the case. Benchmarking has now kicked in. The benchmarking bill alone for health this year is well over €200 million, and that is only the first 25% or maybe the arrears. I will check those figures. There is another pay agreement for the intellectual disability sector. We have gone up to about €970 million extra in health spending this year alone, the bulk of which is going into pay. People are popping up everywhere saying they did not get enough. A 12% increase is way ahead of any other European country in terms of investment in public health, particularly in a tight fiscal year.

We have invested significantly in the public sector. Some Deputies, including Deputy Ring, raised the issue of whether we should concentrate on the public health service and forget about private health insurance. The bottom line is that the public health service has said it does not have the capacity to cope with additional numbers. There is not a hospital in the Dublin region that has not had significant capital funds allocated to it for major infrastructural work. The Mater Hospital itself, in conjunction with Temple Street Hospital, is the largest investment project in the country under the health aspect of the national development plan. Due cognisance should be taken of these developments and commitments.

Last August dire consequences were predicted all over the country with deficits of up to €16 million, much of which did not materialise. I said that at the time, but no one believed me. There were headlines everywhere. Last Sunday one radio programme raised that specific issue.

Mr. Ring

They should be brought before the Joint Committee on Health and Children.

Mr. Martin

I am not talking about specifics. The system tends to react in certain ways in terms of issues arising. I am not saying for a moment that there will not be difficulties this year. There will be, but the knee-jerk response of saying the world is going to collapse is not a sustainable approach to take. In difficult times, one manages by prioritising. Irrespective of what the financial allocations are this year, there is no reason any of the key specialties should be affected. I refer to cancer, where we have invested additional funding, cardiology which should not involve any cutbacks in service and renal services which should not be curtailed anywhere in the country. These are life and death issues and we are satisfied they will be protected in the allocation we have made. We need to take a measured and balanced approach to the issue in what I agree will be a difficult year. I am not disputing that for a moment. Neither am I going to respond to people who forecast the collapse of the system every day.

Question put and agreed to.