The current health system is both unaffordable and unfair. That it is unaffordable is evidenced by the fact that the spend relating to it quadrupled between 1997 and 2009 and that in January 2011 there were 569 people lying on trolleys in hospitals throughout the country. It is unfair because it gives rise to a situation whereby people are often treated on the basis of what they can afford, not what they need and certainly not when they need it. The system is also unsustainable. This is the case because, thankfully, the number of people over the age of 65 in this country increases by 20,000 each year. This is a good thing but it imposes both a strain and a burden on the health service. That is why we must change both the system and the model of care.
The Government has embarked on an ambitious programme of health service reforms and we are already seeing positive impacts from those reforms. However, Deputies should realise that there are limits to what reform of a fundamentally flawed system can accomplish. If we want to realise the kind of health service which we desire and which our people deserve, then radical reform is the only option. Some have questioned whether we can afford this kind of reform. My answer is simple: we cannot afford not to reform the system. Without this kind of radical reform, the pressures on a dysfunctional system will become overwhelming. People have also asked whether this is the right time to introduce reforms, particularly in view of the financial difficulties the country is experiencing. To them I say, "If not now, when?"
The profound inequality at the heart of the current health system is most obvious in respect of access to acute hospital and consultant services. Although the public health service provides universal access to acute hospital services, the fact is that individuals who choose and can afford to buy private health insurance do so mainly because it gives them faster access to certain hospital services. If hospital services are free, why have almost half the members of the population chosen to take out private insurance? The answer must be that they have lost faith in the public health service's ability to deliver on time for them. This is what an unfair, two-tier health system means in practice. Those who can afford it can obtain faster access to hospital services, and those who cannot must wait. They must do so because the high costs that make our current system unaffordable lie at the root of the unfairness. High costs mean that services must be rationed and this gives rise to long waiting lists.
The Government made a commitment to the kind of radical reform needed in order to tackle one of the most profound inequalities in Irish society. We committed to introducing a system of universal health insurance, UHI, so that everyone will have health cover from his or her choice of insurer and access to high-quality care on the basis of his or her medical needs, rather than on his or her ability to pay. The publication earlier this month of the White Paper on Universal Health Insurance underpins the Government's determination to deliver on its commitment. We were clear from the start that achieving this goal would require at least two terms of office. The job of this Government is to put in place the building blocks in order that a fair and cost-effective system of UHI can be delivered by 2019.
The White Paper sets out the model of UHI for Ireland. In designing this model we were acutely aware of the opportunity we have to learn from the experience of other countries, both in the context of the good practices they have developed and also from the inevitable mistakes they made. We did not want to import the model of another country, rather we wanted to learn from the experience in states such as Germany and the Netherlands in order that - in line with the commitments in the programme for Government - we might develop a model that best fits the needs of the Irish system. We looked to Northern Ireland when developing the special delivery unit. Since it was established, it has assisted those on the front line to deliver great progress. We looked to Denmark and Canada in the context of taking steps to ensure patient safety. We looked to the UK when seeking to establish the hospital trusts. We are not importing a single system from elsewhere, rather we are trying to learn from other systems in order to discover what best suits our situation. With that objective in mind, my Department undertook detailed policy analysis of various multi-payer models to design the basket of health services for the future and financing mechanisms for UHI.
I take this opportunity to express my appreciation to the members of the UHI implementation group I established in early 2012 for their contribution in terms of the support and advice provided to my Department. I value, too, the advice the group supplied in respect of some of the core building blocks for UHI, including the introduction of a money-follows-the-patient funding system and the creation of hospital groups.
What will the Irish model of UHI mean for the people? Under it, everyone will be insured for the same standard package of services. In broad terms, this package will include core primary care as well as acute hospital services, including acute mental health services. Under UHI, there will no longer be any distinction between public and private patients. As set out in the programme for Government, everyone will have health cover from his or her chosen insurer. The health insurance market will include a number of private health insurers but people will still continue to have the choice to be covered by the publicly-owned VHI. Insurers will commission health services for their customers from health care providers, who will compete for business in a well regulated market. While people will buy their UHI policies directly from their chosen insurers, a system of financial support will ensure that cover will be affordable. Those on the lowest incomes will have their costs fully paid for by the State. The State will subsidise the costs of others on the basis of their ability to pay. These subsidies will be paid directly to insurers. The Government is determined that people on low incomes who currently qualify for medical cards will not lose out on benefits under UHI. However, all individuals - regardless of whether they pay all, some, or none of the cost of the UHI premium - will be able to access a standard package of health services on a fair and equitable basis that will meet their health needs.
Our system of UHI will be founded on principles of social solidarity. I refer here to the right of people to be accepted by their chosen health insurers and to switch insurers annually - in other words, open enrolment; the right to renew their UHI policies, that is, lifetime cover; and the right to the same policy for the same price, regardless of age or risk profile - in other words, community rating. These are fundamental protections that currently apply in the private health insurance market and they will continue to apply under UHI. It is intended that the standard package of UHI will cover a comprehensive suite of core health services. Under this single tier system, neither insurers nor providers will be allowed to sell faster access to services in the standard UHI package.
I am firmly committed to this fundamental aspect to reform in order that everyone will be able to access the health services they need in a timely manner. I realise some are concerned that the introduction of universal health insurance, UHI, could mean that waiting lists grow even longer. I agree this would be wholly unacceptable. We have already achieved great progress in reducing waiting times and we are not finished yet. This is why I will bring forward a strategy shortly to bring waiting times in Ireland in line with European norms and this will take place in advance of the introduction of universal health insurance.
Some health services are unlikely to be included in any standard package of services under UHI, for example, surgery that is purely cosmetic as opposed to reconstructive surgery after medical treatment. People will still be able to pay privately for services not included in the standard UHI package or purchase supplemental health insurance cover for these. However, these supplemental policies will not be subject to community rating and, therefore, supplemental health insurance premiums may take into account risk factors such as health status and age for non-standard procedures. Certain services, including social care, public health and well-being services, will continue to be funded by the Exchequer through general taxation. They will not be included in the standard UHI package and people will not have to buy supplementary insurance to access them. However, I emphasise that these will be delivered in an integrated manner and around the needs of the individual.
The delivery of a single-tier health system supported by universal health insurance is a central pillar of the Government's overall health reform programme. Since coming into office I, along with my colleagues, the Minister of State, Deputy Lynch, and the Minister of State, Deputy White, have been working on a range of reforms which will result in a fundamental shift in the way our health services are funded, organised and delivered. The purpose is to improve health outcomes, develop our health services, make the best use of limited resources and lay the foundations of the future universal health insurance system. The aim is to ensure more efficient and effective delivery of services in order that we can move away from a hospital centred model to one that provides the most appropriate care in the most appropriate setting. Members will have heard me say frequently that patients should be treated at the lowest level of complexity that is safe, timely, efficient and as near to home as possible. The aim is always to improve outcomes for the patient.
The introduction of UHI is the most radical reform of the Irish health system since the foundation of the State. It requires time and careful planning to implement. My goal is to put in place the essential groundwork to underpin UHI in the lifetime of this Government in order that UHI can be implemented by 2019. I am reminded that some people say we are going too quickly while others say we are going too slowly. We are going to do it right. That is the most important thing and we need not take as long as other jurisdictions because we can learn from what they have done. We will not be so precipitous as to rush this or not do it properly. The White Paper identifies and outlines progress to date on the key structural, regulatory, financial and information related building blocks that will pave the way for the introduction of universal health insurance. I will refer briefly to some of the key building blocks.
As Deputies will be aware, universal primary care is at the core of the Government's goals for universal health insurance. Today, the Government approved the health (general practitioners service) Bill 2014, which provides the basis for each of the 420,000 children in Ireland aged five years and under to access a general practitioner service without facing the barrier of fees. At present, the parents of approximately 250,000 children under six years of age must pay if they need to attend a GP. This legislation will bring Ireland into line with health systems in Europe which ensure all children can access a family doctor when they need the service. The Government has provided new additional funding of €37 million to meet the cost of this measure. This represents the first step in introducing a universal GP service for the entire population. Under universal health insurance, every member of the population will have a universal entitlement to the core primary care services provided by GPs. The Bill will be distributed to Deputies in the coming days when publication is complete. My colleague, the Minister of State with responsibility for primary care, Deputy Alex White, has invited the representative bodies of GPs to meet him in connection with the draft GP contract for the under-six years service, which the HSE recently published for public consultation. I encourage GPs and GP bodies to take up the offer. The best way to engage is across the table in order that we can learn of their concerns and address them.
One quarter of our children under three years are either overweight or obese and we know what this means for their future health. We need to consider a contract that looks to prevention rather than episodic cure all the time.
The transformation of public hospitals into independent not-for-profit hospital trusts is a key commitment in the programme for Government. As a first step in the process, seven hospital groups have been established. The creation of hospital groups is a critical step to improving hospital performance and, ultimately, patient outcomes. Chairpersons have been appointed to all seven hospital groups and board members have been appointed to three out of the seven hospital groups, the west-north-west hospital group, the University of Limerick hospital group and the children's hospital group, and appointment of the remaining four is imminent. Group chief executives have been appointed to five hospital groups and the HSE is working to appoint group chief executives to the remaining two groups. Following this, management teams will be appointed. The strategic advisory group to oversee implementation of hospital groups, the development of policy direction and the guiding of the reorganisation of acute services is in place and has had several productive meetings, which I have attended. On 1 January this year, we began the phased implementation of a money follows the patient funding system for acute hospitals. This will bring an end to the inefficient block grants and deliver funding on the basis of the number of patients treated. While the initial focus of the new funding system is on hospital care, the aim is to extend the system to care in primary and community settings. We know what happened with the inefficient block grants. When the money ran out, everything stopped. Doctors, nurses and staff got paid but patients suffered with cancelled outpatient and theatre appointments. This will no longer be the case. However, it will not only be about volume and the number of patients. It will also have a particular focus on outcomes, for example, the number of patients who have had to be re-admitted because initial treatment was not successful.
Effective regulation of the safety and quality of health services is important to protect and safeguard people's health. The approval of national health care standards and ongoing work in respect of licensing legislation are central to achieving good governance, patient safety and quality of care. Draft legislation to support the new licensing regime is being prepared. It is my intention to have the new licensing system up and running in early 2015. It has been a matter of concern to me that the Health Information and Quality Authority, HIQA, has no role in licensing. As matters stand, private clinics and hospitals, primary care facilities, home care organisations and home help organisations are services where consumers and patients need to be protected and there needs to be oversight by HIQA in this regard.
Competing health insurers will form the backbone of the new purchaser-provider split. They will be the commissioners of a wide range of primary care services, acute hospital services and acute mental health. Even before UHI, we need an affordable competitive market that meets the needs of consumers. I am keen to create the best possible environment within which more people will seek to take out and keep health insurance. In particular, I encourage younger people to join as early as possible, and to this end we will have in place lifetime community rating and discounted rates for adults. Lifetime community rating is designed to encourage people to join health insurance schemes early. Late entry loadings are applied to those who join later, but of course there would be a grace period to allow people take out insurance and a strong communications campaign to give everyone adequate notice of the change. I have heard Deputies raise in the House an issue I have raised myself. It it important that a 50 year old who has been in the VHI all his life should get some recognition of that fact vis-à-vis a 50 year old who was never insured before and who takes up insurance for the first time.
The second initiative I will be announcing involves some discounted rates for young adults while protecting the important principle of community rating. This is to help address the sharp increase in the cost of insurance faced by young people or their parents around the age of 21 years when child discounts cease. This change can lead to young adults downgrading cover or leaving the market altogether. Subject to the appropriate legislation, I intend to provide for these two initiatives to operate from 2015, allowing for an appropriate notice period for both customers and insurers.
I am committed to making further improvements to risk equalisation for health insurance as well.
In January 2013, I introduced a new permanent risk equalisation scheme designed to take greater account of the extra cost of treating older and sicker patients compared with younger and healthier ones. Last December, I introduced further improvements to the scheme's effectiveness. This process will continue. I am committed to improving the extent to which we take the health status of patients into account so that the extra costs of sicker patients of all ages are more fully reflected in the scheme. My Department is working with the Health Insurance Authority, HIA, to develop a more refined measure of health status as part of the risk equalisation scheme in order that insurers can be encouraged to take on sicker and older patients. Insurers have been making submissions to the HIA on the issue and I intend to set out my overall plans shortly for the scheme that will operate from 2016 to 2018.
We continue to address the issue of the cost of private health care through renegotiation of consultants' contracts in respect of the procedures that are performed, particularly those that take much less time than they used to, benchmarking what consultants are paid, auditing hospitals and challenging clinicians' rationale for some of the tests they conduct.
Significant organisational change is necessary to pave the way for the introduction of universal health insurance, UHI. This will involve the abolition of the HSE, which will be replaced with structures that deliver the essential purchaser-provider split, a key building block for UHI that will pave the way for health care providers to operate as independent entities in the future market-based health system. These are important initiatives that individually and collectively will play a vital role in improving our health service in advance of the introduction of UHI.
As well as providing detailed information on the UHI model, the White Paper overviews the processes and structures for determining the future health basket, including the services that will be funded under UHI as well as the ongoing management and review of the future basket; sets out the options for financing UHI; and clarifies the key regulatory and cost control frameworks governing the UHI system.
In designing our future health system, we must decide which services should be funded through UHI and which should continue to be funded directly by the State or individuals' own resources. These questions are of fundamental importance to everyone living in Ireland. The answers are complex and multifaceted, involving various technical, economic and ethical considerations. These are deeply value-laden decisions and, therefore, it is important the values underpinning the health basket reflect the values of the society in which we live. Good practice in other jurisdictions in these decision-making processes involves a critical blend of technical appraisal and comprehensive consultation with all relevant stakeholders. Therefore, I intend to establish a commission comprising all relevant expertise within the coming weeks. The commission will be tasked with developing detailed and costed proposals on the composition of the future health basket, including those that will form part of the UHI package of care.
However, these considerations cannot be solely based on expert analysis. They must also be based on values. In that regard, the commission will be required to engage in consultation with the public and system stakeholders. I hope the Oireachtas Joint Committee on Health and Children will be centrally involved in the consultation process. The committee is being invited to conduct hearings and make recommendations on a values framework that will assist in underpinning decisions on the future health basket and to consider the options proposed by the expert commission. Responsibility for the final decision on the services to be provided under UHI will, of course, rest with the Government.
UHI represents a substantial shift in how we finance and organise the health system. I am determined that total spending by the State on health care under UHI should not exceed total spending under the current two-tier system. With this in mind, the White Paper has been prepared with due regard to the fiscal realities and the need for robust cost control. The White Paper sets out a comprehensive cost control framework to ensure affordability and contain costs. These range from price monitoring of insurers and setting maximum prices for health care providers to more aggressive measures, such as capping insurer overheads and profit margins.
Ultimately, the cost of UHI will depend on a number of key decisions, including the basket of services to be covered and the scope and design of the financial support system. My Department is working to develop and refine proposals on cost control mechanisms, the financial subsidy system and, critically, costed recommendations for the basket of services to be provided under UHI. This work will proceed on the basis of the overriding requirement that overall costs remain within Government expenditure targets. Before seeking the Government's approval to draft UHI legislation, I will revert to it with all relevant cost estimates. A critical part of this work will be our new national health care pricing office, which is already up and running on an administrative basis but which will be placed on a legislative basis so that people can be assured it is truly independent of those who provide the care and those who pay for it.
A dedicated UHI implementation team is being put in place within the Department of Health to drive forward all aspects of the UHI project. The team will be led by the deputy Secretary General and will include specialist skills in such areas as project management, communications support and actuarial and financial advice. This expertise will be sourced externally, as required. The team will be responsible for managing the consultation process, UHI communications, developing costings for UHI and developing policy options for the provision of financial support for citizens in respect of their UHI policies.
In any reform, we must first put in place many of the building blocks, a number of which I have outlined. We must beef up the HIA to give it the tools to regulate the market more seriously. The current situation of more than 256 different policies is set to confuse consumers. The HIA does a great job of providing advice on its website. None the less, we should force insurers into offering fewer products with greater clarity for the consumer.
We must reform the Department of Health. A Prospectus report has made several recommendations about capacity deficits, specifically in particular areas of expertise. These recommendations are being addressed. As the House knows, we are reforming the HSE through a provider-procurer split and the new directorates and hospital groups.
Tomorrow, we will launch Professor Brian MacCraith's report on his work with non-consultant hospital doctors, NCHDs, and other stakeholders in respect of the training and career prospects of NCHDs and new consultants. This work is long overdue and has led to the loss to Ireland of many fine doctors who, after emigrating, have proven their worth by rising to the top of the finest institutions in the world. We want to bring those doctors home and retain the new doctors coming through in order that they can look after Irish people and have the opportunity to engage in research and innovate with new pharma, medical devices and care delivery methodologies.
I had the pleasure and honour of launching Lollipop Day for the Oesophageal Cancer Fund, OCF. Professor John Reynolds of the fund told me it had improved the outcome for oesophageal cancer by nearly 20%. This did not involve new operations or drugs but better organisation and management of care. Many aspects of the care we offer need to be examined and reformed if we are to get the best outcome for our people and patients. This is what we wish to achieve. At the end of the day, these are our families, friends and communities.
Delivering a single tier health system, supported by UHI, is central to achieving our policy vision for the health system, a vision that is far-reaching and ambitious, but one our people deserve. I repeat that it is not my health service or the Leas-Cheann Comhairle's, but everyone's, and I want everyone to have an opportunity to feed into the process of developing the UHI policy and to have his or her voice heard.
I hope that results in the major changes being put in place in the best possible way for the benefit of everyone. I urge individuals, local groups, national organisations and other bodies to participate actively in the consultation process and make their views known on the future funding and delivery of our health service. Full details of the consultation process are available on my Department's website at www.health.gov.ie. This consultation process by way of e-mail will stay open until 28 May 2014. However, as I am at pains to point out, the process through the Oireachtas Committee on Health and Children and through the commission will continue for several months.
I am a republican. I believe in the Republic and I believe a republic should cherish all its citizens equally. This policy of universal health insurance goes to the heart of supporting such a value. It is a value most Irish people hold very dear.
