Vol. 624 No. 1
112 Mr. Cuffe asked the Minister for Health and Children if her attention has been drawn to the pay demands of consultants and junior doctors; her views on whether such demands should be linked to negotiations on their respective contracts; and if she will make a statement on the matter. [29561/06]
I am aware the Irish Medical Organisation has, on behalf of junior hospital doctors, submitted a claim to the Public Service Benchmarking Body for a 20% pay increase. The benchmarking body, which is independent, examines and reports on the pay of public service grades with reference to pay rates for similar types of employment in the private sector. A media report has suggested that a similar claim may be submitted to the Review Body on Higher Remuneration in the Public Sector on behalf of consultants. The review body, which is independent, examines and reports upon the remuneration of consultants and other senior public service grades. In making its report, the review body is expected to have regard to the desirability of encouraging a high level of efficiency and effectiveness in the relevant areas. The Health Service Executive and I are keen to ensure that any pay increases awarded by either body will reflect the level of co-operation by medical grades with the health reform programme. A new contract for consultants and junior hospital doctors is a central element of that programme.
When I attended the recent People of the Year awards, at which the Minister, Deputy Harney, spoke eloquently, I spoke to a consultant who expressed his view that the Minister's long-term aim is to introduce what he called "yellow pack" consultants, who would not be as well qualified as Irish consultants. I ask the Minister to comment on that. The consultant made the point that some young consultants who have returned from the United States are having difficulties in finding houses in Dublin and living in Dublin. I ask the Minister to comment on his suggestion that media reports of consultants' huge salaries are often exaggerated. Is the Minister aware of the interesting RTE documentary series, "Junior Doctors", which highlights the excessive hours worked by such doctors? They work even harder than we do, which is saying a lot. When we have been working for many hours we can go on auto pilot, but junior doctors have to make decisions of life and death in such circumstances. Does the Minister agree they should be remunerated properly for all their work and responsibility? Does she believe their hours should be cut, for the sake of patients?
I want to refute the term "yellow pack" consultants. I do not know what that is supposed to mean. I will not be appointing consultants; they will be appointed on the basis of their expertise. In many countries, after a doctor is trained as a consultant, he or she then takes up a consulting position. In Ireland one could be training for 20 years and never, unfortunately, be given a consulting position. I am not suggesting that every junior hospital doctor or non-consulting doctor should become a consultant. That is a decision I am not qualified to make nor should I make.
A consultant's basic pay begins at €139,000, rising to €181,000. On top of that, he or she will have allowances of about €22,000. That is not an inconsiderable salary. An academic consultant will be paid €222,000. There is not much private practice for many consultants in specialties such as geriatrics and paediatrics. In other areas, the opportunity for private practice, on top of the existing salary, exists. The intention with the working time directive is to reduce working time for a junior doctor from 77 hours to 55 hours per week. A junior hospital doctor receives almost the same pay as a consultant, particularly when one factors in overtime. On a 55 hour week, the earnings of a senior house officer stand at €104,000 while those on the special register stand at €152,000. We want fewer junior doctors in the health service. We have 2,000 consultants but 4,000 is the figure we need to achieve in the next few years. I hope we can have a new contract of employment that delivers flexibility and teamwork.
I referred earlier to the clinical directorate. Doctors are among the brightest and best educated of our graduates. Their remuneration must reflect that, as it does in other countries. This is not a question of saving money but of having flexibility and a contract of employment that suits our health care needs. It cannot be a one-size-fits-all solution. I want a range of different contracts that suit different circumstances.
In many countries, a doctor working in a peripheral location will be offered a more lucrative salary than if working in a large centre of population. I acknowledge the Deputy's comments on house prices. There is no doubt, particularly in Dublin, Cork and some of the larger cities, it is a factor in attracting people home.
Is it acceptable that five years after the Government's health strategy which promised a new consultants' contract talks leading to it have not even begun? What is the Tánaiste's view on this? Gabh mo leithscéal, I meant former Tánaiste. Will she acknowledge that this Government, of which she is an integral part, and a succession of other Governments, have allowed an elite in the medical profession to enjoy a position of privilege unrivalled by any other sector in society? Will she accept that her initiative of private hospitals being developed in public lands adjacent to existing public hospital sites is undermining the Government's negotiating position with the consultants' representatives? Only yesterday, this was demonstrated by a spokesperson from the Irish Medical Organisation, Mr. George McNeice. He asked why the Government will proceed to deal with category 2 contracts while allowing for the development of new private facilities adjacent to public hospital sites.
What are the Minister's plans to stand up to these vested interests which perpetuate a piggybacking off our public health care system for their personal greed? The people want to know what she intends to do about it.
The Deputy need not apologise for calling me Tánaiste. For the first two months when I had the job, I always thought it was Dick Spring was being referred to when the title was used. It does get confusing. I also remember the Taoiseach, on this side of the House, referring to John Bruton as Taoiseach.
I do not share the Deputy's perspective on consultants. What is needed with the consultant contract is flexibility and teamwork. It may sound clichéd but we want consultants to deliver the services because they are the most experienced and competent in the business. The category 1 contract allows doctors to engage in public and private practice in a public hospital. Category 2 allows a doctor to have a private practice off-site in several hospitals. I want doctors to be kept on hospital sites. If a co-location facility exists on a hospital site and it fits in with a current category 1 contract, a doctor will be on-site and working in the facility.
I am concerned that particular arrangements are in place for a public practice in a public hospital and to which a consultant will be committed. It must also be measured and monitored so we get what we are paying for. We get an excess of what we pay for from many doctors who work beyond the 11 sessions or 33 hours a week. There are many difficulties with the current contracts and we could never negotiate such contracts again.
I agree with the Deputy that it is disappointing new contracts have not been agreed. The talks began and collapsed on two occasions. I understand Mr. Connaughton, SC, the chairperson of these talks, is talking with both sides. I hope this will have a successful outcome. I saw many positives in Mr. McNeice's article yesterday. I got the impression the IMO wants to return to the negotiating table. I would welcome that and like to see it happen as soon as possible.
The Minister said that with overtime, a junior doctor could earn considerable amounts. How much of the 77 hours a week is overtime or is it on top of that figure? How confident is the Minister that the working time directive will be introduced? When will junior doctors be working a 55 hour week?
It should be 58 hours. I was wrong when I said 55 hours. Agreement has been reached on nine pilot sites where this working time structure will be implemented. It is, however, on hold pending the talks at the LRC and I cannot say when these will be completed. The sooner, the better because no one wants junior hospital doctors working the hours they have to now. It is neither good for them nor their patients. The only way this can be reorganised is through agreement. We cannot, however, be expected to pay 20% more for a substantially reduced working week.
How much of the 77 hours is overtime?
I do not know the breakdown.
113 Dr. Cowley asked the Minister for Health and Children if the system of VAT being added on to the care services provided by commercial companies to older people will be removed; her views on whether the Government is adequately providing essential care services for older people; and if she will make a statement on the matter. [29555/06]
Home care packages for older people deliver a wide range of services. They are delivered through the Health Service Executive by a range of providers, including the Health Service Executive, voluntary groups and the private sector. They consist of a mixture of grants, contracted care services, therapeutic input and equipment and other such community services to facilitate the older person to remain living in his or her home.
Home care services provided directly by the Health Service Executive do not generally come within the scope of VAT, as public bodies are not regarded as taxable persons. It does not charge VAT on the services it provides and cannot recover VAT incurred on its input costs.
Where home care services are provided by private companies for a consideration in the course or furtherance of business, the provider may be obliged to register and account for VAT at the appropriate rate depending on the type of service provided. Home care provided to individuals consists of services which may be liable to VAT at different rates. The current VAT treatment of such services is in accordance with the EU Sixth VAT Directive, with which Irish VAT law must comply.
Officials from the Department of Health and Children, the Revenue Commissioners, the Department of Finance and the Health Service Executive are examining VAT liability for home care services provided by private companies to older people. In particular, they are trying to ensure the home care services provided under home care packages are exempt from VAT in a manner that complies with EU law.
The Government has made services for older people a priority. This means supporting older people in dignity, to live in their own communities, for as long as possible. Additional funding for services for older people and palliative care, amounting to €150 million, has been allocated in the 2006 budget. This is the largest ever increase in funding for services for older people. It is important to have a high quality of residential care available for those who require it and additional funding was also made available in the 2006 budget for the subvention scheme.
It is a national scandal that the State is failing to provide necessary services for older people. Even though some must scrimp and save to support themselves in their homes, the Government cruelly imposes VAT on the companies providing care services. These companies inevitably pass on this charge to the person who must pay to keep an elderly relative at home. Such people are being unfairly doubly charged. This points to the duplicity of the Government which, on one hand, encourages the private sector to provide services for older people which are its responsibility to provide, while, on the other hand, making it more difficult for older people to buy the service they are compelled to buy because the Government will not do so. It is absolutely ludicrous.
I am encouraged by the Minister of State's reply that he is reviewing the situation. Will he remove this inequity immediately? It is a crippling charge. The Government is not providing adequate home care for people who require that service. The available home care packages are limited. In particular, those who are trying their best to keep older relatives at home must not only provide the cost of paying a private company to do what the State will not do but also face the further cost of the VAT that is cruelly taken by the Government on that charge.
The Minister, Deputy Harney, encouraged these companies to provide these services, no doubt to satisfy the Progressive Democrats' private profit agenda. No mention was initially made that VAT at 13.5% would be charged for those services. Only those who are registered for VAT and have a VAT number, which is not the case for most of those looking after elderly relatives, can get that money back. "Liveline" listeners were lining up to talk about this issue and they have a strong case. I ask the Minister of State not merely to talk about reviewing the situation but to tell us whether the Government is committed to removing this inequitable charge.
Will the Deputy let us know if he has a magic wand or is doing something we are not? As I explained, the Government must comply with the relevant EU directive. Officials from the Department and the HSE are working with the Revenue Commissioners and officials from the Department of Finance to see if there is some way to overcome the issue.
We appreciate the value of home care packages and the wonderful work that is being done in this area. In last year's budget, the amount of money available for this service was almost trebled. This resulted in an increase in the number of packages available from 1,100 in 2005 to 3,000 this year. These services keep people out of hospitals and facilitate the early discharge of elderly patients. They are provided by several providers, including the HSE. We are keen to see a situation where this service could be provided VAT free, which would make it more affordable for families. It would also mean the Government would be in a position to provide more home care packages.
We showed our commitment in last year's budget which included a major investment in this service. That investment will continue.
Does the Minister of State not agree this burden is too great for many people? How can VAT be charged on this service when there are civil servants and others employed by the Government in the service who should be able to recognise the inequity of this charge? The system is supposed to serve the people but seems rather to serve those who are making profits. The interests of the latter appear to have the upper hand over the needs of the public. It is wrong that a situation can arise whereby people are trying their best to pay for a service and must then face a second charge imposed by the Government. How did such a situation come about, especially given the Government's encouragement of private companies to provide this service? Is it part and parcel of the Government's role to act in this way or will we ever see a situation where people are put before profit?
It is not a matter of putting people before profit. As I explained, home care packages are provided by several different bodies, some of which are private and one of which is the HSE. The current VAT treatment of such services is in accordance with the EU's sixth VAT directive, with which we must comply.
The Minister of State is correct that we will all benefit from the home care packages if they serve to reduce the dependence on hospital beds. It is important that people are confident that this is a solution for which they may opt. Given that 13.5% of €150 million is in the region of €20 million, is the Department of Health and Children seeking to reclaim this money from the Department of Finance? If not, this charge serves to reduce the funding that should be directed towards the home care package. It is desirable that this amount should be further increased and the most important issue is that it covers the costs of the service.
I am aware there are delays in payments under this scheme. I have dealt with several people who have had to get loans to cover the first two months before the payment comes through. This is a particular difficulty for persons on the low end of the income scale. These problems must be resolved if this service is to be an option for people across the spectrum. The VAT charge should be repaid from the Department of Finance to the Department of Health and Children so that the funding of €150 million is not reduced by 13.5%.
We are developing a much more flexible approach in dealing with home care packages. In some instances, people are given the money when they can provide the required service themselves. We have entered into discussions, as I outlined already, with the view to reaching a situation where this service can be provided without VAT. If we can do so, we will be in a position to provide a far greater number of home care packages throughout the country. As I mentioned, we have already increased the availability from 1,100 last year to 3,000 in 2006. In the first six months of this year, an additional 1,800 clients became in receipt of home care packages.
I will investigate what Deputy Murphy said about delays in payments and respond to those concerns at a later date. I appreciate the difficulty such delays would cause.
It is obvious patients are not getting a fair deal on this issue. From the perspective of the taxpayer, if the Government is spending this amount of money, a cost benefit analysis should have been done. Does the Minister of State know how much it costs the HSE to provide each home care package? Taking into consideration a 25% premium, which comprises the VAT and the profit of the private company at a minimum, is the Minister of State saying private companies can deliver the same quality and type of service at a lower rate than what it would cost the HSE to hire home helps to provide exactly the same service? According to the Government's value for money audits, there is an obligation on the Department to undertake such an analysis to ensure it is getting the best value for the taxpayers' money. Has this been done or is there an intention to do so?
There is no way around the VAT issue because its imposition is necessitated by an EU directive. The Minister for Finance, Deputy Cowen, has not managed to do it when answering parliamentary questions in this House and it is highly unlikely anybody else will come up with a solution. Has the Minister of State at the Department of Health and Children, Deputy Seán Power, ever done a cost benefit analysis on this issue comparing private sector delivery of this service with that of the Health Service Executive?
We had a number of pilot projects throughout the country providing these home care packages and the feedback suggested they worked exceptionally well. We decided, on that basis, to increase our investment from 1,100 to 3,000 home care packages throughout the country.
The Health Service Executive and also the private sector provide this service and competition must be welcomed in this area. In some cases the private sector may provide a more flexible service. It is important that we continue to invest in this and if we reach a point where this service can be provided VAT free, all the better and all the more money we will have to spend to provide home care packages for more people throughout the country.
We must proceed to Question No. 114.
If the VAT issue fails, does that mean this initiative may be withdrawn?
We have not reached a conclusion on it. We are seeking a solution and our experts in different areas are examining it to see if it can be overcome.
114 Mr. Rabbitte asked the Minister for Health and Children her views on the current situation with a company (details supplied) in relation to its recent financial difficulties; if she will provide an update of her understanding of the difficulties faced by the company and its effect on the software roll-out here; if she will provide an update on the Health Service Executive’s payment terms with the company; the systems that are provided by the company; where these systems are in place; the timeframe of any further roll-out; the cost so far and expected total cost involved; and if she will make a statement on the matter. [29550/06]
The Health Service Executive has confirmed the position in relation to the company in question to be as follows. The company is a major supplier of information technology systems to the health services in Ireland, the UK and several other countries. Financial difficulties at the company, combined with changes at senior management level and staff lay-offs in the UK have been widely reported during the course of this year. Although the company's latest financial results for the year ended April 2006 reported a significant net loss, it made an operating profit on revenues for the year. The net loss was primarily attributable to a substantial goodwill impairment charge associated with the goodwill valuation attributed to a company it merged with three years ago.
The company's difficulties in the UK have not impacted on services to Irish customers. The company has met its contractual obligations to the HSE and has advised that it will continue to do so. The company supports many IT systems that have been in place for years in various hospitals in Ireland.
The HSE awarded the national contract for new hospital systems to the company in 2005. The total ten-year value of the contract is €56 million plus VAT. Under this contract, phase one of the roll-out of the company's existing hospital software, which will meet HSE requirements for the short to medium term, is under way. The system has been successfully deployed in Cork and Kerry and is expected to be implemented in hospitals in the north west and north east over the next few months. A total of €11.6 million, including VAT, has been paid to date.
The national contract also entitles the HSE to deploy the new software that the company will develop over the coming years. Further engagement with the company is planned in the near future to determine the implications for the HSE of the company's revised software development programme arising from the difficulties the company has experienced in the UK.
The HSE is confident that the contract protects its position appropriately against poor performance and non-delivery of software and services. The contract was prepared by the HSE's legal advisers and explicit provision was made to protect the HSE against a series of eventualities. Payments to the company under the contract are dependent upon the receipt of identified deliverables. The contract also provides for financial remedies in the form of payments to the HSE to deal with possible problems with quality, performance and-or availability of software or with the quality, responsiveness and availability of support services.
Is the Minister for Health and Children not concerned that the UK company we are discussing has declared a net loss of €500 million? Is she suggesting that not only has this company been paid for services, she intends to complete the contract with a €59 million payment without expressing concerns about the current situation? The company's chief executive officer has resigned and there has been a late declaration of an enormous loss. There are major concerns in Britain's National Health Service regarding the possibility of this company delivering services.
I acknowledge the change of status of the Minister for Health and Children and acknowledge also that she is one of the very few women Members of the House and is unique in having led a political party and having been Tánaiste.
I thank Deputy McManus for her kind comments. One would be concerned when we have contractual arrangements with any company that gets into difficulties, but the banks, in the case of this company, have reconfirmed the borrowings and that is encouraging. The HSE believes that its legal position is protected. As the company has a major contract with the NHS, we therefore believe that if it were not in a position to continue, its products would be taken over by a competitor and the services would continue to be supplied. The HSE remains confident that the company can continue its contractual obligations.
