Thank you, Chairman.
The Sláintecare report by the all-party Oireachtas committee recommended the phased elimination of private care from public hospitals. There is cross-party political support for this for a very good reason: quite simply, access to public acute hospital services is unfair and that needs to change.
Ireland is unusual in that those with private health insurance or who can pay out of pocket are able to access services in public hospitals quicker than those who do not have health insurance or cannot afford to pay. This is not fair. It is difficult to think of any other public service where people are treated more favourably simply because they can pay more for a service. Our recommendations are designed to eliminate this unfairness. Our proposal would also help to move us towards the accepted norm in almost all advanced countries.
Ireland’s system of private practice in public hospitals is very unusual. We asked the OECD to report for us on the Irish system, and it found Ireland to be a striking outlier. We have a very large private health insurance market. The overwhelming number of hospital consultants have rights to private work and almost 30% of our total hospital activity is funded privately, a situation comparable only to the US.
I would like to refer briefly to the widespread misunderstanding about the cost of removing private care. The recommendations we make are costed, and costs are phased in a way that makes the change affordable, and I will come back to this point.
We recommend legislation to ensure that public hospitals are used exclusively for the treatment of public patients from the conclusion of the ten-year Sláintecare implementation period. Our other recommendations ensure a reduction in private activity over time, but over the lifetime of Sláintecare, private activity must eventually cease entirely and the legislation should provide this.
The key recommendations in the report concern the consultant contract and there are five recommendations. First, all new consultant appointments should be to a Sláintecare consultant contract. This would allow consultants to conduct only public activity in public hospitals. It is important that this recommendation is implemented soon. There is no point in continuing to issue contracts with private practice rights when these will have to be bought out in the future. This recommendation is the key to removing private activity from public hospitals in a progressive, orderly and incremental way.
Second, we recognise that there are significant consultant recruitment problems in our public hospitals, with approximately 370 vacancies at the moment and a further 380 posts occupied by non-permanent staff. While working conditions, hospital rosters and matters such as training opportunities for non-consultant doctors play an important role, pay is also a factor. In October 2012, the starting pay of consultant doctors was cut significantly. We recommend that the payscales for all new entrant consultants to the Sláintecare consultant contract and for existing consultants appointed since 2012 on public-only contracts are restored to the scale that existed pre-October 2013. In current terms, the starting salary of a type B consultant appointed today is €131,000. The starting salary of a new consultant should our recommendation be accepted would be €182,000, a very considerable differential of €51,000. This new salary would compare very favourably with salaries in other countries and would put Irish consultants among the highest paid consultants anywhere.
Third, while our recommendation about new consultants being appointed to a public-only contract will ultimately lead to the removal of private activity from our hospitals, this will take some time. In order to speed up the process and encourage existing consultants to change to the new contract arrangements, we have recommended that existing consultants should be offered a contract change payment to move to the new Sláintecare consultant contract.
Fourth, we are concerned that there are some consultant posts, and I stress the numbers are likely to be very small, where it may prove almost impossible to recruit a suitable candidate. A scheme exists in the third level sector that allows a special derogation from pay service caps to address recruitment to highly specialised posts in a very limited number of cases, and we have suggested that this also needs to be considered in the public health service.
No doubt members are aware of some concerns that have been aired over the amount of private activity in public hospitals conducted by a small number of consultants that is above the amount allowed in their contracts. It is our view that the HSE needs to ensure that this does not happen, so the agreed monitoring and reporting system to robustly monitor and enforce the existing consultant contract must be implemented. We made two further recommendations, namely, the Department of Health should ensure that HIQA’s quality and safety regulatory functions are extended to all healthcare settings, including those in the private sector, and that a better data collection system would be put in place relating to the nature and scale of activity in the private hospital system.
Obviously, the implementation of these recommendations gives rise to increases in public expenditure. The additional costs arise mainly from the loss of private income of public hospitals but also in relation to consultant pay - for those taking up the public-only contract - and the increased cost of treating greater numbers of public patients, and we have set out the final costs at the end of ten years and it comes to approximately €650 million per annum. The main element of this is the private income of hospitals - now just over €500 million - paid mainly by insurers. This income is declining in any event due to the campaign by insurers to inform patients that they gain no advantage from using their insurance when admitted via the emergency department of a public hospital. While the loss of this income will result in a cost to the Exchequer, people are already paying for this in the form of higher insurance premia, and the loss of this income will result in higher taxes but lower insurance premia. Even if there is no change in the existing system, this source of income will decline, and it would be very risky to rely on this income continuing into the future.
It is important to note that €650 million is the annual cost which arises after all private activity is removed. In the initial years of implementation, the costs will actually be quite modest, primarily arising in relation to additional expenditure on consultant pay. This would amount to around €12 million if recruitment targets are met. An additional public activity which would be caused by the recruitment of these public-only consultants would cost a maximum of €40 million per annum.
One matter which is important to highlight is the effect these recommendations would have on the capacity of our public acute hospitals. We believe that the vast majority of patients being treated privately in public hospitals will become public patients under our future arrangements. This is because they are in a public hospital as emergency patients or they require complex care or multidisciplinary services, or maternity services where there is no equivalent services provided within easy reach in the private sector.
In our report, we also advised the Department of Health should examine the clinical indemnity scheme to ensure that there is a level playing field in relation to the clinical indemnity between private work carried out in public and private hospitals. This would address the situation where consultants conducting private work in public hospitals currently do not have to make any contribution towards their indemnity insurance for their private work. We have been careful to develop our recommendations in a way that ensures there is no shock to the system. While the policy change can be commenced quickly, the effects will happen incremental over time. While it will take ten years to fully remove private activity, significant progress can be made relatively quickly. Also, implementing these recommendations over the lifetime of the Sláintecare programme makes it more affordable and ensures that they happen in parallel with improved care models, better availability of diagnostics, and improvements in primary and community care that will be necessary to ensure the successful implementation of the proposal.
There will be little immediate effect for those who rely on private health insurance. People will still be able to use their insurance should they wish to, but over time, our public hospital system will be better able to provide services for all public patients, and people will have less need to take out health insurance. People will still be able to access services in private hospitals with their private health insurance should they wish. Our recommendations represent a significant part of the Sláintecare programme of reform and map out a small number of policy actions which can be taken which would see the change implemented progressively in parallel with the wider health service improvements already under way in Sláintecare. The costs are phased in a way that makes the change affordable. Thank you, Chairman.