Priority Questions.

Health Insurance.

James Reilly

Question:

67 Deputy James Reilly asked the Minister for Health and Children the assessment she has carried out to justify the introduction of recently announced private health insurance measures; the assessment she has carried out to measure the impact of this scheme on the market; if she will publish details of same; her views on the financial impact this move will have on subscribers; if she has had discussions with health insurance companies regarding proposed substantial increases in health premiums which according to media reports may be as much as 60%; and if she will make a statement on the matter. [42892/08]

Minister for Health and Children (Deputy Mary Harney)

Immediately after the Supreme Court judgment in July which found the 2003 risk equalisation scheme to be ultra vires, I initiated a comprehensive review of the options which might be open to the Government in the aftermath of the court finding. Since then, I and officials from my Department had meetings with the Health Insurance Authority and the three insurance companies operating in the market. I also had the benefit of advice from the Attorney General and external counsel. At appropriate points, I also had the advice from the Department’s consulting actuaries. Following receipt of a related proposal from the Health Insurance Authority, officials from my Department and the Department of Finance explored the potential of the taxation system to meet the long-established policy objectives of successive Governments in regard to private health insurance.

Based on the advice which I have received, I believe the interim arrangements which have been approved by the Government can be objectively justified. They are a necessary and proportionate response to the problems arising in the market for health insurance and have been formally notified to the European Commission as a potential state aid. The assessment undertaken of these measures constitutes part of the notification to the Commission and it would, therefore, not be appropriate to publish it at this time.

The effect of the measures on the premiums charged for particular policies by individual companies is a commercial decision for the companies themselves, as they set both policy benefits and pricing at the same time. However, they should not in themselves lead to an overall increase in the approximately €1.5 billion in private health insurance premiums paid, as the levy will yield approximately the same amount as the cost of the tax relief at source.

The package of measures announced last week will help to keep private health insurance affordable for older people. In addition, the introduction next year of lifetime community rating regulations will encourage younger people to continue to take out health insurance. The combined effect of all of these measures is overwhelmingly positive for the health insurance industry and its 2.25 million customers.

Deputy James Reilly

The Minister has told us that, as far as she can foresee, there will be not be any increase in premiums. Will she confirm this to the House? It is important to point out that community rating is still enshrined in law and, therefore, a rise cannot apply in a plan unless it applies across all age groups. Will the Minister admit that younger people will be pushed out of health insurance through the combination of increased premiums, levies and reduced tax benefit apart from those aged over 50? When will the new legislation be introduced? Will the Minister share with us why we remain insistent on a 40% reserve in the VHI when most other places, including the UK, have a reserve of 25%?

Deputy Mary Harney

To deal with the last issue first, I share the Deputy's view that it is high and out of sync with other countries. However, it is entirely a matter for the independent financial regulator and neither the Government, the Minister for Finance nor I have a role with regard to the reserve requirements set by the regulator in Ireland.

With regard to new EU directives, I hope there can be consistency throughout the European Union on this matter. A company incorporated in another jurisdiction doing business in Ireland would only have to meet the reserve requirement suggested by the Deputy if it were incorporated in the UK.

Tax relief has not been withdrawn from anybody. We all have 20% taken away at source and this has not been interfered with. Last week's announcement was that additional benefits will be given to everybody over the age of 50. This will be a benefit of €200 for those aged between 50 and 59, €500 for those aged between 60 and 69, €950 for those aged between 70 and 79 and €1,175 for those aged 80 and over. This will be deducted from the premiums at source.

It is true the Supreme Court found we must have community rating within a plan. However, the market is segmenting to such an extent that thousands of plans will exist. A company with a young workforce will get a particular plan while another company with a workforce of an entirely different age profile will have a different plan. Within each plan everybody will pay the same. We know many companies introduced plans covering maternity benefits, sports injuries, joining a gym and teeth whitening, but not hip replacements or cataracts. Within a plan everybody pays the same but an older person will not take out a plan offering maternity benefits and a younger person will not take out a plan providing for cataract removal.

The Minister has no function in approving price increases. This was changed a number of years ago. I believe in a highly competitive market and for the first time it will be competitive to attract older people. The introduction of lifetime community rating will encourage younger people to take out insurance.

Deputy James Reilly

To correct the point, there was no suggestion on my part that the 20% tax rebate would be removed. However, it has been reduced for higher earners from the top rate to the lower rate and this is another whammy for the young which may well undo what the Minister seeks to do, which is to keep younger people in insurance and make it more affordable for the elderly.

Deputy Mary Harney

This tax change was made a number of years ago and was made at the suggestion of those who examined the tax system to make it equal between the better off and the less well off, in other words, those who only pay tax at the standard rate and those who pay some tax at the higher rate. Otherwise, better off people would receive twice the benefit of those who are less well off and only pay the standard rate.

The introduction of lifetime community rating in particular will incentivise young people to take out insurance or disincentivise people to wait until they are in their 40s or 50s to do so. This will have a major beneficial impact on keeping young people in the market and attracting others.

Health Service Staff.

Jan O'Sullivan

Question:

68 Deputy Jan O’Sullivan asked the Minister for Health and Children the discussions she has had with the Health Service Executive on a redundancy scheme for management grades; if there are proposals to reduce the layers of management within the organisation; and if she will make a statement on the matter. [42595/08]

Deputy Mary Harney

I have had a number of discussions with the chairman and the chief executive officer of the Health Service Executive about a targeted voluntary early redundancy scheme to be introduced for the HSE. Initially, the scheme will concentrate on surplus management and administrative staff. This will be extended to other staff in due course. It will apply to staff at corporate HSE and also to staff at hospital and community level. This decision was reaffirmed by the Minister for Finance in his budget speech on 14 October.

The HSE announced plans in July to modify its structures, including merging the existing hospital and community pillars at national and regional level. The purpose of this is to have clear lines of authority and accountability for delivering services to patients from national to local level, and between hospital and community services. Initiatives that lead to improved efficiencies and the reduction of administrative duplication at all levels of the HSE will be part of the scheme.

One such example is a plan to create single unified organisation structures between a number of hospitals. The aim of this model is to ensure that health service delivery is planned and organised on the basis of a single entity, thus optimising the use of resources, streamlining decision-making, harvesting the benefits of critical mass and avoiding wasteful duplication. Where two hospitals are to operate as a unified entity, there is no need for a duplication of payroll, personnel, IT offices and many other backroom services. This will lead to efficiencies of between 10% to 20% in administration costs.

Similar initiatives at community level will lead to equivalent efficiencies. As we continue to bring together services through primary care teams, there is an opportunity to reduce levels of administration and to facilitate more clinician-to-clinician engagement regarding the care of patients. I support the rationale for this model of shared services, which is very much in line with the health reform programme.

Deputy Jan O’Sullivan

I welcome the Minister's acknowledgement that she has established a dysfunctional organisation, comprising an amalgamation of a large number of separate entities, with a layer of management at the top. It is clearly not working and was not set up properly in the first place. I welcome the Minister's recognition in this regard and her acceptance that nobody could possibly have run it in a way that would work well for the public. Given that more than €14 billion of public money, along with the lives and health of our citizens, are in the hands of this organisation, one must question why it was set up in this way in the first place.

I have several questions for the Minister in the context of the announced changes. We have heard much jargon from her without any clarity in regard to what is envisaged to be done. Does the Minister intend specifically to take out layers of management grades, including some of the 800 staff members above grade eight? One could count on two hands the number of staff at that level before the HSE was established. What types of numbers are envisaged in terms of those who will be offered voluntary redundancy? Is the redundancy programme targeted specifically at the management layers as opposed to those who are taking people's names in clinics? When can we expect these changes to happen?

Deputy Mary Harney

The Minister for Finance said in his budget speech that his plan was to introduce a voluntary redundancy scheme across the public service. I hope the HSE scheme will be the start of the process in 2009. I am engaged in ongoing discussions on this issue with Professor Drumm and the chairman. It is not a matter for me to identify who should stay and who should go. That is a matter for those charged with the management of the organisation.

Deputy Jan O’Sullivan

It is the Minister's role to lead. There must be political leadership on this issue.

Deputy Mary Harney

I invite Deputy O'Sullivan to read what was said by the spokesperson for her party and those of the other Opposition parties when the organisation was being established, accusing me of not being sensitive to staff and so on.

Deputy Jan O’Sullivan

Our spokesperson emphasised the importance of setting up the organisation properly in the first place.

Deputy Mary Harney

Since the establishment of the HSE, there has been a reduction of 10% in the numbers working at corporate level in the health service, and an increase of 10% in the numbers of professionals, including nurses, physiotherapists, occupational therapists and consultants. I introduced the legislation providing for the establishment of the HSE. Many other countries are considering taking the same approach. I believed then it was the right thing to do and I still believe that.

Deputy Jan O’Sullivan

Such a body must be set up with proper management structures in place.

Deputy Mary Harney

Yes, but one must first establish the organisation and put people in charge before deciding who should go and who should stay.

Deputy Jan O’Sullivan

That is the wrong way around.

Deputy Mary Harney

All the best human relations experts in this State would confirm that this is the appropriate approach.

Deputy Jan O’Sullivan

Why did the Minister set up this huge structure in the first place? It is the equivalent of building a house and adding lots of rooms before subsequently removing those same rooms. What is needed is a simple but effective management structure where there is clarity as to who is in charge, instead of throwing up a general plan to take out personnel. Any changes should be focused in such a way that there will ultimately be a structure under which everybody can understand precisely who is responsible for what.

Deputy Mary Harney

It would not have been possible for any individual, no matter how extraordinary, to have sat down in any office and decided, when more than 50 organisations, including 11 health boards, were being brought together, which staff would be necessary to retain and which would not. It was known that the chief executive officers of the former health boards, since their roles were being abolished, would no longer be in position. Therefore, there was a redundancy plan for them. After that, it was important to establish the unified organisation and to assign it, under its new chief executive officer, Professor Drumm, and his team of managers, the responsibility to decide which personnel were required at the various levels and to learn from experience in this regard.

The recommendation in the reform analysis that was done, before I became Minister for Health and Children, was that there should be two pillars. However, my own experience and that of the management team is that this is not a good idea. We need integration between hospital and community rather than separate pillars with separate budgets. Yet the advice given to the Government in advance of the establishment of the HSE was that the model that was put in place was appropriate. Professor Drumm has been in office for three years. He is the appropriate person, together with his new human relations director and the other staff at his disposal and on the basis of the external advice he has availed of from individuals and organisations with expertise in this area, to decide, in accordance with the process the Minister for Finance will put in place, on the level of redundancy in the organisation in 2009 and onwards.

Health Services.

James Reilly

Question:

69 Deputy James Reilly asked the Minister for Health and Children if she has received the Health Service Executive’s service plan for 2009; if she has approved the plan; the locations at which the level of service in 2009 will be below that of 2008 or 2007; and if she will make a statement on the matter. [42893/08]

Deputy Mary Harney

I received the HSE's national service plan for 2009 last Tuesday, 18 November. It is being examined by my officials and I will review it later this week. As is normal, the plan will be published after I have approved it.

Following the budget, I wrote to the chairman of the HSE on 15 October outlining my requirements for the 2009 plan. I emphasised that my priorities were to avoid service reductions, protect the least well-off and to continue the overall reform programme. I also highlighted the need for service levels in 2009 to reflect planned activity throughout the year.

Clearly, the current fiscal position demands the most careful control of public expenditure within the approved limits. However, the 2009 allocation for the HSE should allow it to continue to provide services in 2009 which are at least in line with those provided in 2008. The 2009 allocation includes €120 million to meet service pressures arising from demographic changes. It should, therefore, fund service increases in areas where there are unavoidable demographic and other pressures.

The 2009 allocation also includes €55 million for the fair deal scheme, an additional €15 million for the cancer control programme and €10 million for therapy supports for children of school-going age.

Deputy James Reilly

The Minister has referred to the transfer of €77 million from the fair deal scheme to the refund scheme. Already, therefore, we have been presented with a supplementary provision. Some €70 million is allocated for the new deal with consultants, €350 million is set aside for repayment to the United Kingdom health authorities, who hotly dispute the bill they received from the HSE, and some €60 million is allocated for pharmacies, although in her supplementary budget for this evening, the figure indicated by the Minister is closer to €32 million or €34 million.

Will the Minister give us some idea of the areas in which she will curtail the roll-out of programmes in order to make the savings to which she alludes in that document? My question was how the Minister plans to maintain the 2008 service level in 2009. How will this be achieved given the cutbacks already taking place? These include the closure of the orthopaedic unit in Navan, of 31 beds in Mercy Hospital, Cork, and of orthopaedic services at Naas General Hospital. Hospitals in Galway and Blanchardstown are withdrawing services under the pressure to break even. The 12-bed orthopaedic unit in Letterkenny is to be closed and cutbacks are taking place at Mayo General Hospital.

Can the Minister give a commitment that there will be no reduction in front line services to patients in 2009 given the budget she has been allocated and the supplementary allocation she is seeking this evening?

Deputy Mary Harney

Regarding appropriations-in-aid, as the Deputy is aware, when citizens of one country come to reside in another, the country where such a person spent his or her working life traditionally pays for health services provided. In this case it seems we were overpaid in the past which is the reason for the discrepancy. Apparently, the amount of money we received was significantly out of line according to the agreement reached concerning the services provided. I am not yet in a position to give a definitive answer on the service plan, but we will discuss it at the Oireachtas Joint Committee on Health and Children later this week. I am currently in discussion with my officials on this matter.

I want to see an increase in day activity and a reduction in in-patient activity in hospitals. I seek a move in line with best international practice in this area. I also wish to see shorter in-patient stays where such in-patient stays are required. I believe if we could move more rapidly to day stays and shorter stays in general we should be able to provide the level of service envisaged for 2009. I have stated in the House on several occasions since the budget that we face a challenge during 2009. Given the overall increase in the Department of Health and Children Vote including capital and current expenditure, the increase is less than 2%, which is the smallest increase in 13 years. The annual increase has been running at an average of 9% for each of the past 11 years.

Deputy James Reilly

How will this be achieved? In 2002 and 2007 3,000 extra hospital beds were promised. The Minister delivered 1,300, but this year she reduced by 500 the number of beds and plans to reduce by 600 the number of beds next year. This amounts to 1,100 beds taken out of the system and there is no sign of any co-located hospital beds. I fail to see how the Minister will manage it.

Deputy Mary Harney

As the Deputy is aware the matter of co-location arises in the next question and we will deal with the matter then. The big issue with acute hospital beds is how they are used, it is not only the number of beds involved. There can be a significant discrepancy between hospitals in the country in the level of activity between one and another even if the budgets are very similar. That is the reason I seek more day case activity and shorter in-patient stays for hospitals. I believe with such changes we can deliver the level of service necessary in the country during 2009.

Hospital Accommodation.

James Reilly

Question:

70 Deputy James Reilly asked the Minister for Health and Children to outline the funding difficulties with regard to the co-location plan; her views on the fact that more than three years since the announcement of this plan not one bed has been created; and if she will make a statement on the matter. [42894/08]

Deputy Mary Harney

The aim of the acute hospital co-location initiative is to make available additional public acute hospital beds for public patients by transferring private activity, with some limited exceptions, from public acute hospitals to co-located private hospitals.

The beds in public hospitals that were formerly used for private patients will be used for public patients. In addition, public patients may also be treated in the new private beds, subject to value-for-money agreements being entered into with the HSE or the National Treatment Purchase Fund. Each co-location project is required to demonstrate value for money for the State, taking into account its comprehensive benefits, as well as the cost of tax allowances and private bed revenue currently accruing to public hospitals.

There is a complex process to achieve the results we seek and significant progress is being made. The board of the Health Service Executive has approved preferred bidder status for the development of co-located hospitals at Beaumont, Cork University, Mid-Western Regional Limerick, St. James's, Waterford Regional and Sligo General Hospitals. Project agreements for the Beaumont, Cork and Limerick sites were signed in March 2008.

Planning permission was granted by An Bord Pleanála for the Beaumont project earlier this month. Planning permission for the Cork and Limerick projects was granted by the local authorities concerned and appealed in each case to An Bord Pleanála. The necessary preparatory work for project agreements in respect of St. James's Hospital, Waterford Regional Hospital and Sligo General Hospital is proceeding. A tender in respect of Connolly Memorial Hospital has been received and is under consideration. Work is being undertaken to finalise the invitation to tender for Tallaght Hospital. It was not envisaged that projects would be completed at this stage. I am satisfied that co-location remains the fastest, most efficient means of increasing public bed capacity in acute hospitals.

As regards funding, each successful bidder has to arrange its finance under the terms of the relevant project agreement. It is the case that the funding environment has changed radically in the past six months, for both public and private sectors and as with other major projects the co-location initiative has to deal with this. The successful bidders are working on the details of contractual terms with banks and other arrangers of finance in the very difficult and changed credit environment. The HSE is continuing to work with the successful bidders to ensure that the co-located hospitals can be built and brought into operation as soon as possible, and that the goal of achieving new public acute bed capacity at value for money to the State is achieved.

Deputy James Reilly

Unfortunately, although I very much wish to believe what the Minister is saying I cannot. The co-located hospitals issue is still an ongoing quagmire. The plan has not delivered a single extra bed to the country. The Minister has removed 500 beds this year and will remove a further 600 next year. This is all very familiar to me. There are promises of wonderful things to come tomorrow while the Government takes away what is in place today.

Are all companies involved in the co-location process tax compliant and have such companies filed tax returns on time? The Minister mentioned contract negotiations. Are these completed, signed and legally binding? What recourse is there for the taxpayer if these companies proceed with these contracts? Have the banking requirements for funding been resolved? I believe there was a significant issue long before it was known the economy turned.

I mentioned the matter of reducing the number of beds. I asked a question earlier and perhaps the Leas-Cheann Comhairle can rule on the matter. Can the Minister specify which services had a slower than expected roll-out from which the Minister hopes to save €38 million in the supplementary budget?

Deputy Mary Harney

I realise there is an obsession with co-location. The purpose of co-location is to convert some the beds currently available. Some 700,000 bed days per year are used in public hospitals funded by the taxpayer for private patients at a subsidy of considerably in excess of €100 million. Since I became Minister for Health and Children I have substantially increased the cost of those beds to the insurers. I have more than doubled the cost of category 1 beds and category 2 beds to reduce substantially the subsidy paid by the taxpayer to beds that can only be occupied by insured patients. This is the purpose of the policy. As the Deputy is aware, owing to consultant contracts and so on, it is desirable to keep our consultants on site rather than moving among three or four hospitals to look after private patients. I was in Beaumont Hospital, Dublin last night, which Deputy Reilly has often referred to as his constituency hospital. It has 110 beds for private patients. I believe it would be highly desirable to convert those beds for the use of public patients which the taxpayer is funding and the staff of which are all paid for by the taxpayer.

I do not have details regarding tax affairs of the relevant companies. There are rules relating to State projects which apply and relevant companies must be tax compliant. I am not aware of the tax position of any company involved. If the Deputy has information which he wishes to make available to me, I would be more than happy to receive it. It is not a matter for me. Project agreements and bids must be overseen by the HSE. I am not involved in the selection of tenders or in negotiations with bidders. I am optimistic that we can see progress by way of construction on these sites very quickly. I understand that from the time work begins it will be approximately two and a half years before these beds can be commissioned.

Deputy James Reilly

I repeat the questions previously asked. Will the Minister confirm by letter within one week or ten days the position of the tax status of the companies? I believe the staff in the Department can do this. I asked if contract negotiations had been completed and what the legal implications would be for those who have signed contracts which do not materialise. That question was not answered. Have the banking requirements been resolved?

Deputy Mary Harney

The banking requirements are a matter for the bidders and their banks. I am not involved in negotiating with banks on behalf of bidders. I was accused in the House for many months of devising what was termed a sweetheart deal from which everyone would benefit. Now the Deputy accuses me of a deal so restrictive that no one can raise the finance to build accommodation for these beds. That seems to be the implication.

Deputy James Reilly

Not at all. The Minister should not be paranoid.

Deputy Mary Harney

The tax situation of companies is a matter for the HSE. However, I will seek to establish the facts. If the Deputy has information, I invite him, perhaps on a confidential basis, to make it available to me. The Deputy seems to be operating on foot of some information he may have which I would be very happy to receive.

Child Care Services.

Alan Shatter

Question:

71 Deputy Alan Shatter asked the Minister for Health and Children if the Health Service Executive has finalised its inquiry into the circumstances relating to the death of a person, whose details are supplied; if she has received a report in respect of the said inquiry; if not when she expects the report to be completed; if the report will be published; and if she will make a statement on the matter. [42174/08]

Minister of State at the Department of Health and Children (Deputy Barry Andrews)

I understand that the internal HSE inquiry into the circumstances surrounding the death of the person referred to by the Deputy has been recently completed. A draft report has now been received by the HSE. I am informed that a final report is imminent.

The inquiry was set up at the request of the then Minister of State at the Department of Health and Children, Deputy Brian Lenihan. Deputy Lenihan requested that an internal inquiry be carried out and that the Minister be made aware of the findings of the inquiry. In accordance with this request, I understand that the findings of the inquiry will be forwarded to me once the report is finalised.

I acknowledge the tragic death of this young person. I am committed to ensuring that we learn lessons from any inquiry or investigation of this kind and that we take the necessary steps to ensure that, where possible, tragedies can be averted in the future. The development of robust, responsive and appropriate child welfare and protection services is a priority for both myself, as Minister of State with responsibility for children and youth affairs, and the Government.

Deputy Alan Shatter

Can the Minister of State confirm if he is aware that this report relates to David Foley, who voluntarily sought care from the State at 14 years of age? The State failed utterly to provide for him properly and put him in what is known as "out of hours" facilities. Three years after seeking help from the State, on 10 September 2005, this poor man lay dead in an apartment in Blackhall Place in Dublin.

The Minister of State's predecessor, Deputy Brian Lenihan, sought a report on these events a considerable time ago. Can the Minister of State indicate when his predecessor requested that report? Will he receive the full report? Can he confirm that it is an internal inquiry of the HSE, rather than an independent report? Will he receive the full history, or simply the findings? When does he expect to receive it and will it be published? If it is published, will it be available to all Members for their consideration? If we receive it, we should be able to determine whether action is required to ensure that we have the robust child protection services that the Minister of State claims he would like to see.

Deputy Barry Andrews

This report relates to the death of David Foley, who presented himself voluntarily for care services when he was 14 years old in 2002, and died three years later. I do not want to pre-empt the findings, but I can confirm that this is an internal inquiry. I will receive the report this week. I will have to look at the report before I can make any statement on how, when or to whom publication would occur.

The findings will be outlined in this report, as well as a chronology of the issues that gave rise to him being in care and any gaps that may have occurred. I hope that it will be a full analysis of the situation and will enable us to avoid repeating these failings. It is unacceptable to have to wait three years for this report and I will try to establish why that happened.

Deputy Alan Shatter

Does the Minister of State accept that this tragic teenager was scandalously failed by the State? Does he accept that under no circumstances should a situation arise where a teenager cries for help, presents himself to the State seeking care, is essentially left to his own devices and ends up dying three years later? Does he accept that it is in the public interest that there be transparency in our child protection services and that this full report be published without delay? We have waited three years for it.

The "Children First" guidelines on child protection have now been in place for almost ten years. Does the Minister of State accept that he, his predecessor and the Government have scandalously and abjectly failed to ensure that we have a uniform application of the child protection guidelines throughout the State? Does he accept that our current child protection services are dysfunctional and chaotic? It is unacceptable that a report published last July, almost ten years after these guidelines were put in place, refers to the absence of consistency in the delivery of child welfare and protection services across the State, and to the absence of any standards against which the delivery of services can be benchmarked. What steps are being taken to ensure that we provide protection for children who are at risk and that there is a uniformity of application of these guidelines and appropriate training available to all those social workers under pressure to provide fire brigade responses when reports of child abuse are made to the HSE?

Deputy Barry Andrews

I share the Deputy's sympathy with social workers who work under great pressure and tremendous difficulty. When a child dies in the care of the State, there is no question that he has been failed in some way. Through this inquiry, we must establish how he was failed and make sure it does not happen again.

Much has happened since the death of David Foley in 2005. In particular, the agenda for children's services became a core of child protection policy in this State in 2007. The principles of that are early intervention and prevention, to move away from crisis management towards the earliest possible intervention and family support services. We put in place a knowledge management strategy. We have already standardised the business process regarding the referral of children and initial assessment. We want to move towards further standardisation. As the Deputy points out, the service is not uniform throughout the State and that is partly a legacy——

Dáil Éireann debate - Tuesday, 25 Nov 2008