Health Insurance (Amendment) Bill 2012: Second Stage (Resumed)

Question again put: "That the Bill be now read a Second Time."
Deputy Caoimhghín Ó Caoláin: This is important legislation and a significant updating of the regulatory regime for the health insurance sector in this State. The Bill continues the necessary system of community rating which ensures that all consumers are charged the same premium for a particular plan regardless of age, gender or health status, thus preventing price discrimination against those more likely to require medical treatment. The Bill amends Section 1A of the 1994 Health Insurance Act by making the provision for community rating more specific, extending the cost subsidy currently between the young and the old to include the more healthy and the less healthy.
As long as we have the type of health insurance market and the type of health funding that exists in this State, the regulatory regime provided for in the Bill will be necessary. It involves a complex system of risk equalisation to support the community rating principle. This entails the transfer of compensation from insurers who carry lighter risk burdens to those who carry heavier risk burdens. All this requires regulation, monitoring, enforcement and penalties.
(Interruptions).

I doubt I deserved that round of applause.

I ask those in the Visitors Gallery to remain silent.

I did not think Deputy Caoimhghín Ó Caoláin was that good.

I am all surprises. The system requires regulation, monitoring, enforcement and penalties for infringement as provided for in the Bill. Without legislation, the unregulated market would discriminate against the old, the sick and any other group or individual insurance companies decide are a greater risk. The Bill is, therefore, supposed to provide protection against the working out of the raw profit motive in the health insurance sector. It is supposed to be based on solidarity between generations and the healthy and the sick. That is welcome in so far as it goes, but we in Sinn Féin would go much further and extend the principle of solidarity to the way we fund, organise, structure and manage the entire health care system. I will return to this point in due course.

The Bill is before us at a critical time for the health insurance sector and in the midst of a crisis for the health care system. There has been a massive decline in the number of people with private health insurance. In 2008 there were 2.3 million people with private health insurance, but that figure has decreased to 2.1 million in 2012. Over 60,000 people have dispensed with private health insurance in the last year alone. Meanwhile, the cost of premiums is rising. People who have dispensed with insurance because they can no longer afford it are now dependent on a public health system which is under attack from the Government's failed austerity strategy. The State continues to heavily subsidise the private for profit health system with private beds in public hospitals, a fast track to treatment for private patients, while public waiting lists grow with the dual working of hospital consultants in the public and private sectors.

The Government's proposed solution is to move to an entirely health insurance based system of funding, managing and delivering health care. It is important to note that the health insurance policies of both Fine Gael and the Labour Party were conceived at the height of the Celtic tiger when record numbers had private health insurance. Perhaps it appeared to these parties that the ready-made solution for the State was to extend health insurance cover to everyone, while subsidising those who could not afford it. During and after the general election of 2011, Fine Gael and the Labour Party managed to paper over the differences in their respective models of universal health insurance. It is now clear, however, that the Fine Gael approach won out in the programme for Government and, subsequently, in the stewardship of the Minister for Health, Deputy James Reilly. In the now famous Dáil speech last September the then Minister of State, Deputy Róisin Shortall, who resigned a few days later, asked a number of pertinent questions, while failing to express confidence in the Minister. She asked:

Are we going to reform and strengthen our public health services, or privatise large parts of it? How do we ensure equity and access in the health service? What model of universal health insurance best suits the situation here in Ireland? Should it be a commercial insurance model or a social insurance model?

If one reads Fine Gael's FairCare policy, it is obvious that it favours privatisation and the commercial insurance model. It states with what I can only describe as overblown confidence that once universal health insurance is introduced "the insurance market will double in size. This will attract new entrants, increasing competition and driving down costs". This is a pure market approach which treats health care as a commodity and believes consumers will benefit from competition. However, the Bill highlights a contradiction in the approach. The Bill is based on the recognition that there has to be social solidarity in the insurance sector. The market has to be regulated to prevent price discrimination against the old and the sick. There cannot be normal commercial competition because otherwise we would have a US-style law of the jungle where the young and the fit would benefit from cut price health insurance, while the old and the ill would be fleeced or driven out altogether.

Given that the principle of social solidarity is recognised, why not extend it across the entire health care system? If one takes that concept of solidarity to its logical conclusion, one moves to a system of universal provision of health care based on need rather than ability to pay. The question arises of how one pays for such a system. Contrary to the frequent assertions of the Minister, we in Sinn Féin recognise that health care is hugely expensive and has to be paid for. The question is how to pay for it in a way that ensures the best possible health care for all who need it with the best achievable value for money. The Government is proposing to bring forward universal health insurance, with the State subsidising those who cannot afford to pay insurance premiums. Given that the State will still have a huge regulatory, managerial and funding role, why would it give private for profit insurance companies such a central place in the system? What contribution will they make? They are funded by the consumers who buy their products. The insurance companies, on behalf of policyholders, will buy services from private or public hospitals or other service providers and will have to make a substantial profit in the process. Why not cut out that profit for the privateers and keep the money in the health system and the pockets of citizens? The only possible reason for not keeping out the profiteers is commercial. In opting for the privatised insurance model, albeit including a slimmed down VHI in the mix, the Government is putting business before health. For citizens, the bottom line is that when they need health care, they need it promptly and they need the best care possible. That is why Sinn Féin advocates universal health care based on equal access for all. We want it to be State provided, funded from fair general taxation and free at the point of delivery. This would involve a higher contribution in tax from the highest earners than they contribute at present. How could this be wrong?

We do not favour the model of insurance based funding for the reasons I have outlined.

If health insurance is to be the basis for funding, then it should be a State insurance scheme. The Labour Party once claimed to be in favour of this, but its former policy has been suppressed in favour of that of Fine Gael in the authorship of the programme for Government and in the outworking of that over the period since. As far as Sinn Féin is concerned, the least desirable model is an insurance system based on competing private health insurance companies. In that case, the profit motive and the interests of shareholders become paramount, rather than public health. This is the Fine Gael model and it won out in the programme for Government.

On 8 November, the trade union IMPACT published an important paper, entitled The Future of Healthcare in Ireland. I commend it to the Minister of State if she has not already read it. It says of the Government's plans:

The Government model of competing private sector insurers has not been properly tested. Delays in its implementation suggest that Government plans for UHI have been poorly thought out. If implemented, the model is unlikely to deliver equity, value for money, quality or universal access. Quite the opposite: lessons from the Netherlands show that a profit-driven commercial model led to an inequitable and inefficient system of funding, different tiers of entitlement, rising hospital deficits and even bankrupt hospitals.

That is a very different view of the Dutch system compared to the glowing reviews of Fine Gael. The IMPACT paper recommends examination of what it calls a single payer social insurance model along the lines of those in France, Germany and the Nordic countries. It states, quite rightly, that the "competing insurers" model should not be adopted, at least and until all the options have been evaluated in terms of equity, quality, access to services and value for money. I appeal to the Labour Party Minister of State and her colleagues to be the brake on this runaway proposal with which the Minister, Deputy Reilly, is most comfortable.

At present, we have decreasing numbers of people with health insurance, rising premiums for those who have insurance, more pressure on the public health system from those coming off insurance and the persistence of the two-tier public-private system, with the struggling public system subsidising the private system. We have calculated, based on figures from Government, that if the Government applied the full cost of private beds in public hospitals, it would save €432.5 million - a sum that could then be spent in the public system reducing waiting times and overcrowding in our hospitals and on improving services. We must ask what is the real prospect of change under this Government, particularly if the Labour Party allows Fine Gael run away with the ball.

Already, the promised extension of free GP care has been postponed. The programme for Government promised a White Paper on financing universal health insurance early in the Government's first term. The Department of Health's recent briefing for the Joint Oireachtas Committee on Health and Children stated the White Paper will be published "as early as possible within the Government's term of office". We are still waiting. Going the insurance route is a mistake. It offers the increasingly remote prospect of reform, while the deeply flawed current two-tier system deteriorates, especially as a result of the austerity policy and health cuts of this Government that are undermining the public health system. We have ample evidence of this the length and breadth of the country.

This Bill is a necessary measure for the insurance sector as it stands and we will, accordingly, accommodate its passage. However, the overall future of health insurance and of the health system generally under this Government is fraught with uncertainty. I urge the Minister of State and her colleagues in the Labour Party to utilise their special place in the coalition to bring real consideration to the alternatives that have been documented by many voices, not only domestically but internationally, and to recognise there is international experience of the model being proposed, including that of the host country from which the idea has been borrowed. That experience is far from the picture painted by the Minister and other voices here over the past 18 months. It is time for a reappraisal.

I welcome the opportunity to speak on the Health Insurance (Amendment) Bill. The Bill raises fundamental, serious and significant issues for the health services of this country. What type of health service do we want? What type of health service have we got? Do we want to follow the private health care model? Do we want to privatise facilities? Do we want to have the health care system driven by health insurers? How do we fund the health care system? How do we pay for the system? Are the budgets provided for the system adequate? Should we continue to maintain the two-tier system we have currently?

In my view, the provision of health services here should be on the basis of equal and timely access, based on medical need. Services should be free at the point of use and should be funded through general taxation. One of the fundamental problems with the health service here is the model we use and the manner in which the system is funded. This has resulted in a system in crisis. It is worth examining the current situation and what the austerity measures and cutbacks in health services have meant for the service and for those who require it, such as patients requiring hospital services and patients requiring community based services.

What is the vision for the future of health services here?

As the Minister and a Fianna Fáil speaker said earlier, a person with private insurance who is in a private hospital or a private bed in a public hospital receives what is known as the Rolls-Royce treatment. Such a person gets every examination, regardless of whether it is necessary or appropriate, so that the health insurers can make a commercial benefit - a profit, in other words - from his or her hospital stay or health care service. However, it is evident in places like the United States that when the system is dominated by health insurance companies, they will do the exact opposite and start to tell medical people, consultants and hospitals what services to provide. At that stage, it will be a question of reducing the various services and examinations that might be needed. We will go from one extreme to the other.

Our current two-tier system, which has not worked, can be described only as a system in crisis. It is important to paint a brief picture of a system that is simply not working by referring to the number of people on trolleys in hospital corridors throughout the country. According to today's figures, a total of 287 people are on trolleys, including 25 at Beaumont Hospital; 14 at Connolly Hospital; 28 at St. Vincent's University Hospital; 12 at Cavan General Hospital; 28 at Mid-Western Regional Hospital in Limerick; 30 at Our Lady of Lourdes Hospital, Drogheda; ten at South Tipperary General Hospital; seven at Waterford Regional Hospital; 11 at Mercy University Hospital, Cork; and 13 at Cork University Hospital. Similarly, figures that were issued yesterday indicate the budgetary difficulties that are being experienced in our hospitals. The extent of the trolley problem is a feature of hospitals throughout the country. It is not something that can be attributed to particular difficulties in one or two hospitals. It is a systems problem throughout the country.

The budgetary problem in hospitals throughout the country is also a systems problem. It is not a question of rogue management or inexperienced management in one or two hospitals. Every hospital in the country has a significant over-run. I will give some of the figures. Budgets have been exceeded by more than €2 million at Waterford Regional Hospital; €2.5 million at St. Luke's Hospital, Kilkenny; €3.1 million at Wexford General Hospital; €3.2 million at South Tipperary General Hospital; €12.3 million at Cork University Hospital; €790,000 at Mallow General Hospital; €2.5 million at Kerry General Hospital; €2.4 million at Mercy University Hospital, Cork; €7.4 million at Sligo General Hospital; €8.05 million at Letterkenny General Hospital; €6.4 million at Mayo General Hospital; €1.3 million at St. John's Hospital, Limerick; €19.1 million at Mid-Western Regional Hospital in Limerick; €6.7 million at Portiuncula Hospital; and €23 million at the Galway hospital group. On and on it goes throughout the country. As I have said, these difficulties indicate that there is a systems-based crisis. It is not something that can be solved by dealing with one, two or three hospitals. It is clear that this country's health services are significantly under-funded. These chronic difficulties need to be addressed urgently and immediately on the basis of the public funding of a public health system.

The question of waiting lists is another issue that indicates this is a systems problem. The difficulty relates to how we provide the system. There is no vision of how the system should be provided. It is clear that outpatient waiting lists are absolutely huge at present. Approximately 385,000 people are on outpatient waiting lists. That represents an increase of 20,000 on last month. More than 115,000 people have been waiting for more than 12 months for appointments. Some 185,000 people have been waiting for longer than six months. Approximately 11,000 patients have been on waiting lists for more than four years. This crisis has been driven by a lack of vision. The State has failed to deal with this difficulty by providing a public system that is free at the point of use and based on medical need. The problem is that our two-tier system does not provide for access to services on the basis of medical need. Under the system that is in place, medical services can be bought, in effect, and private medicine takes precedence over medical need in many cases.

The funding of the system is a core issue. I believe we should have a public system that is funded by the State. I know it will be said that it is not possible to provide for such a system in the current circumstances. As I have said previously, where there is a will there is a way. A small but significant number of people in this country - approximately 5% of the population - are very wealthy and have significant assets and income. They have increased their assets and their income over the course of this recession. It is clear from CSO figures - they are not my figures - that the assets of the 5% of people who are very wealthy increased by €46 billion in the 2009-10 period. That pattern has continued since then. The same CSO figures have also shown that the people in question have increased their incomes by 4% or 5% at a time when the rest of the population has experienced an average income reduction of approximately 18%. I believe these people have significant leeway to pay a wealth tax. The figures show that the total assets of the 5% of people in question are worth approximately €239 billion.

A modest wealth tax would bring in significant income that could be used to ensure our health services are properly funded. I know it will be said that this cannot be done without driving the people in question out of the country. The fact of the matter is that wealth taxes are accepted as a form of taxation in many European countries and many states of the United States. Such a system was introduced in this country by a previous Fine Gael-Labour Party Government. If the system introduced by the former Minister for Finance, Richie Ryan, was in place today at a modest rate, significant moneys would be available to fund a public health system in this country.

As it is now 10 o'clock, I ask the Deputy to move the adjournment of the debate.

Before I do so, I would like to say that the systems of intergenerational support, community rating and risk equalisation that are provided for in the Bill before the House are welcome for as long as the current system is in operation.

Debate adjourned.
The Dáil adjourned at 10 p.m. until 10.30 a.m. on Thursday, 15 November 2012.