I move:
That Seanad Éireann approves the following regulations in draft —
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1988
a copy of which regulations in draft was laid before the House on 16th March, 1988.
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1988: Motion.
A Chathaoirligh, Senators, it is an honour to address this House on this motion relating to health contributions — the Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1988.
Subsections (2) and (3) of section 9 of the Health Contributions Act, 1979, provide that the Minister for Health may vary the income ceiling which determines the amount payable by an individual, in a particular contribution year. Subsection (5) of section 9 of the Act requires that a draft of the proposed regulations shall be laid before both Houses of the Oireachtas and that the regulations shall not be made until a resolution has been passed, by each House, approving of the draft regulations. The draft regulations now before this House shall apply in relation to the contribution year commencing on 6 April 1988.
The income ceiling is at present £15,000, and it is proposed to increase this to £15,500. This £15,000 at 1.25 per cent gives a total contribution at the maximum level now of £187.50 per year. The proposed increase to £15,500 at the rate of 1.25 per cent will bring in £193.75 at the maximum. This is a very modest increase of £6.25 per year. The following categories are totally exempt under the Health Contributions Act, 1979: medical card holders, widows contributory pensioners, widows non-contributory pensioners, deserted wife's benefit, deserted wife's allowance, death benefit under the Social Welfare (Occupational Injuries) Act, 1966 and social assistance allowance under the Social Welfare Act, 1973, section 8.
In determining the proposed increase in the income ceiling I have taken into account — as required by the Act — the most recent information available regarding the average earnings of workers in the transportable goods industries since the last income ceiling was adopted. The latest recorded information on average weekly earnings in those industries relates to June 1987 when the average figure was £196.76, which was an increase of 5.2 per cent on the June 1986 figure of £186.92.
When this percentage increase is applied to the current £15,000 ceiling a new ceiling of £15,780 emerges. However, it is proposed to set the new ceiling at £15,500, which is more in line with the 3.2 per cent increase in the Consumer Price Index to mid-August, 1987. The effect of this increase in the ceiling is to increase the maximum amount of health contributions payable by persons with incomes in excess of £15,000 per annum, who will pay only an additional £6.25. Persons with incomes of £15,000, or less, will not be affected by this increase.
The proposed increase in the income ceiling will bring in about an additional £1 million in the contribution year 1988-89. Of this, about £250,000 whould arise in the financial year 1988. The balance of the additional yield, about £750,000, will come in the first quarter of 1989. Bearing in mind the overall cost of the health services — £1,300 million — this is a very modest increase. This levy contribution brings in £110 million in a full year. This increase, as I have stated, will bring in £1 million extra in a full contribution year.
The Revenue Commissioners are responsible for the collection of current health contributions from all sectors. The health boards remain responsible for the collection of arrears due from farmers for periods up to 6 April 1984. The total amount owed by farmers to health boards at 31 December 1987 was about £5.7 million. While the amount which is still outstanding is a cause for concern, there has been an encouraging response to the efforts of the health boards to recover these arrears. A total of £1.4 million was collected in 1985, £1.1 million in 1986 and a further £426,000 in 1987.
Senators will be aware that health boards can retain these arrears, including any arrears collected in future years, as additional revenue to be applied to local health services needs and most of the health boards have now initiated legal proceedings to recover arrears.
In addition, the Health (Hospital In-Patient Charges) Regulations, 1984, came into effect on 1 June 1984. These regulations allowed for an admission charge of £100 — which sum was subsequently increased to £150 on 1 July 1986 — to be levied on persons admitted for hospital in-patient treatment in a public hospital who are in arrears with health contributions. This has proved to be quite an effective measure in inducing defaulters to pay their health contributions. However, I should mention that persons in arrears are not refused admission to hospitals, but the collection of the admission charge and the arrears is pursued later.
I am anxious that outstanding arrears should be collected as soon as possible as it is clearly unfair that those who do not honour their obligations with regard to health contributions should continue to obtain health services at the expense of others.
As the House will be aware, the Government have decided to change the basis of income tax assessment for the self-employed and to extend liability to this sector for PRSI contributions. They have also stated their intention to apply the same assessment, collection and enforcement procedures as will apply henceforth to income tax also to PRSI, health contributions and to youth employment levies paid by the self-employed. I would now like to take this opportunity to inform the House that I am at present having regulations drawn up in my Department to give effect to this decision in relation to health contributions. When these regulations, together with other appropriate legislative provisions sponsored by the Ministers for Finance and Labour, are in place, health contributions together with PRSI and the youth employment levy will be aggregated with a self-employed individual's income tax liability and will be demanded and collected in a single sum.
At the same time the regulations which I propose to make will, in accordance with the budget announcement, also provide for the deduction of capital allowances in the calculation of the reckonable income of self-employed persons who are liable for health contributions. I am sure all Senators will welcome the main thrust of these measures which will, to a very great extent, streamline the assessment and collection of tax, levy, PRSI and, what I am primarily concerned with, health contributions, by removing any duplication at present inherent in the assessment and collection system. The individual taxpayer will also benefit from being able to discharge his full taxation and contribution liability to the State in one transaction.
Senators may wish to know that I shall be reviewing shortly the income limit for free consultants' services. I am not, as yet, in a position to say what the limit will be. I now ask the House to approve the regulations before it in draft.
I accept these regulations. The Minister's statement is very brief and very specific. It is very important that most of the population should be entitled to have hospital benefit. We heard from the Minister that the farming community once more have an outstanding bill of £5.7 million in respect of the health contributions. This is to be very much regretted. Farmers are evading their responsibility to pay a very essential sum. While the amount still outstanding is a cause for concern, there has been an encouraging response to the efforts of the health boards to recover these arrears. This is in stark contrast to the position of PAYE workers who have no option in regard to this contribution because it is deducted from their pay.
With regard to the argument based on the average wage, the latest recorded information on average weekly earnings in the transportable goods industries related to June 1987 when the figure was £196.76. That is the average wage. I am wondering if that is the male or the female rate, or is it the men's average rather than the women's because there is a disparity. As we know, women earn only 60 per cent of the male rate. That is just a query I have.
I recognise it is necessary to make this increase and we do not oppose it.
I recognise that this is an annual thing, that regulations must be made and laid before both Houses of the Oireachtas. It also gives us an opportunity to look at the hospital services and what value the public are getting for this percentage of their income which is given over to the health services. I recognise the fact that we are spending £1,300 million on our health services but I should also like to point out that our health services have been very gravely curtailed and that our public are not getting good value for money. They are paying very heavily for it.
When the original Bill came before the House in 1970, the late Deputy Erskine Childers, who was Minister for Health at the time, made it clear that this was to provide an improved health service for the public and that they were paying a percentage of their income for it. Up to then manual workers who were insured and had insurance numbers could get full health services free. This was their right under the law and that is what their social welfare contributions covered. Unfortunately, this right was taken away from them. This was a right that was there for 50 years up to 1970. They had the right to free hospital services and free consultant services and this was taken away from them.
I was amazed that the trade union movement did not take the case to court on their behalf. I thought they were rather reticent and dilatory in not challenging it but they did not challenge it and I thought that was very wrong. We could argue that the services were improved when this percentage of a person's income was paid for a health service but then, in the past few years, we had a very curtailed service, hospitals closing down, beds closing down. The services provided at out-patients and hospital levels are very inferior at the moment. I am speaking as a doctor now in saying that if a patient wants to be seen by a consultant that patient may have to wait six to eight months. If you ask a doctor to get an appointment for you with a consultant in a Dublin city teaching hospital the answer you will get at the present time is: "in August, September or October next". I am not exaggerating in saying this. I do not think that is a good service for the percentage of the person's income that paid for a health service.
On top of this you pay the out-patient charge and also the hospital charge for in-patient services. It was argued that you could take out voluntary health insurance but that was done to try to save you the cost and the burden. What was the health contribution for? I wonder are we over-looking the fact here that people are suffering, people are having great hardship. People who are bringing two or three children to a hospital and who must pay to be seen by a consultant have to pay £10 for each child. This is a lot of money to hand out and people are scared to attend hospitals because of the cost involved.
We have a growing population over the age of 65 for whom it is impossible to get a bed; it is absolutely impossible. This is happening not just in the past year but it has been going on for the past three or four years. We are not making provision in any way for these people who are over the age of 65. Because of the way the services and health in general over the years have improved due to developments in technology and medicine many people will live longer. They become a burden on the community. Many of them need health services and hospitalisation for periods ranging perhaps for a month, a week or two months but they cannot get them. This is something that we have to look at. This is an opportunity for another look at this whole matter.
I do not think I am out of order in discussing the health services because we are talking about health contributions which come within the ambit of this motion. I wonder why the ceiling below which the health contributions apply should be £15,500. If we had income tax stopping at £15,500 I wonder what kind of an outcry there would be. If you paid tax up to £15,500 and paid nothing after that, I dare say there would be a public outcry. I am wondering if we should have no limit, no ceiling on the health contributions, so that those with £50,000, £60,000 or £70,000 a year might pay appropriately and in this way we might get a little more for those who are in need. Perhaps the Minister would tell us why it was decided to put a ceiling on the health contribution and if they did not put a ceiling on it, what would be the consequences for the health services. Everyone knows that the big burdens on the health services and the hospital services are those among the lower income group. Having no ceiling would not put an extra burden on the health services other than taxing those with higher incomes. I do not think any of us would be adverse to that. The Minister might care to give us an answer to that.
I would also like to hear the actual figure for revenue from the health contributions in a year and if the Minister is satisfied that all sections of the community, other than the farmers are making a fair contribution. I often wonder, with regard to the farmers, why there could not be a closer liaison between the Department of Finance and the Department of Agriculture and Food so that where farmers are not paying the health contribution, the Department of Agriculture and Food could, on behalf of the Department of Finance, deduct the necessary health contribution in paying out certain grants. It is not fair to single out farmers. The same argument would apply to other groups not paying their share. In that way we would avoid the tremendous division between city and rural people because it is widely believed in the city — I do not agree with it because I think a lot of it is due to ignorance — that the farmers just pay nothing, get everything and make a fortune. This is totally untrue. If there is money going to that section of the community by way of grants or subsidies, a closer liaison between the Department of Agriculture and Food and the Department of Finance could rectify the situation very quickly and stop the carping that is going on.
There are areas like this we should look at. I would like to know the rationale for a £15,500 ceiling and I would also like to know the revenue from it. Perhaps the Minister would tell us if he is satisfied that the public are receiving the service for which they are paying this very high contribution.
The Government need not devise charges to pay for what is left of the health service. It is of such a poor quality now that it would be difficult to give it away, not to mention charging people for using it. The list of complaints is endless at this stage. Let me give a little example — it cannot entirely be laid at the feet of this Government — but it is a classic example. I happened to come into contact recently with the cases of two children, one of them my own who had a relatively minor ear ailment. The other was a child of a relatively poor family. My child was from a relatively affluent family. The operation did not require an overnight stay in hospital but the consequence of a long delay before the operation would be that the children would be likely to become deaf. My child, of course, had the operation. The taxpayer paid for two-thirds of it via my VHI which is tax-allowable and, therefore, I who am well-off, got a service for which two-thirds of the case was paid by the taxpayer. The other child, who happened to be the child of a caretaker in a school, would have done without the operation if the teachers in the school had not the concern and compassion to actually organise a collection to pay for private health care for the child because there was a two-year delay on that operation and, by the time the operation could take place the child would be likely to have been permanently and seriously damaged in his health.
There are increasing indications of similar problems. The Southern Health Board, for instance, have obviously identified the less sensitive areas to decimate the health service. Most of the voluntary redundancies in the nursing sector have been in the psychiatric area, that area having the classic symptom that people will not protest or complain. Nobody is going to get up and say: "I was psychiatrically ill and I could not get into hospital". People who have physical ailments will happily get up and say: "I had a serious illness or a debilitating illness and I could not get into hospital". You will find few enough people who will get up and say: "I was mentally ill and could not get into hospital". You can, therefore, count on the psychiatric patients to remain quiet. There is increasing concern about the people who are being discharged from psychiatric hospitals, about the quality of care, about whether our long stay psychiatric hospitals are any more now than institutions of containment rather than institutions of care.
I predict that within the next two years we will find our extremely creditable record of infant mortality beginning to deteriorate. You cannot provide high quality pre-natal and ante-natal services on the cheap. If you begin to cut back on the services and on the numbers, you have the consequence which is that more babies will die and that is an appalling price to pay for financial rectitude.
Senator O'Connell made a very interesting speech. The only thing I can say about it is that I am not sure what he is doing sitting where he is. He should be back where his original allegiance lay, with those of us on the left who always knew that when Fianna Fáil were in Government they would obey "capital" before they would look after the welfare of ordinary people. It has been their history since 1960 to be the servants of capital rather than the servants of labour which is not their original history.
There was a Labour component in the last Government.
I may be——
Senator Ryan should stick to what we are discussing rather than judge whether Senator O'Connell has made right decisions. I do not think it is for him to discuss that.
I rarely dispute with you but I do think I am entitled to make political analyses of the position of other Members of this House without being in any way disorderly. I am quite happy to take an interruption from Senator O'Connell if he wants to explain something to me. I am entitled to make comments about other Members of the House and their views and how consistent or otherwise they are. I have the great privilege of speaking in this House. I would be in jail over something else if it were not for the privilege of this House, I hasten to add.
There are a number of questions which need to be pursued. Can the Minister tell me what proportion of national income is actually not covered by the health charges? In other words, how much of the total income that is liable for income tax, for instance, is not covered by the health charges? Is it 10 per cent, 20 per cent, 30 per cent or 40 per cent? It would be interesting to see what proportion of the total income, not the numbers of people, that is excluded from the health contributions.
Also, if one is going to suggest that certain people, because they cannot get the services or because they can afford to pay for them, should be excluded, then one should be logical and carry this through to its conclusion. At the risk of alienating half of my own constituents I think there is no case for allowing private health insurance or voluntary health insurance contributions to be allowed against tax at the top rate. The very best that could be argued is that it should be allowed against tax at the standard rate which is what two-thirds or 63 per cent of taxpayers will be paying after 6 April. It appears to me that the other 37 per cent — myself included — do not deserve and should not be given a subsidy from the State to the extent that I am given for my voluntary health contributions. Now, if I were a saint I would follow that to its logical conclusion and not claim it. I am not a saint and I shall claim it. I invite the Minister to address that problem.
If we are cutting back on health expenditure we should not simply cut back on direct expenditure: we should cut back on indirect subsidy, indirect supports which, by an large, benefit the most well-off. We also, incidentally, might have a look at multinational operations in the area of health contributions and the profits that are being exported outside the country. I refer in particular to what boasts about being the largest private hospital in Europe, which is a religious-run hospital in my own city which is effectively a multinational which makes profits which are then transferred to the head office of the Order in Paris. I object to the idea that a large part of the taxpayers' contribution to the voluntary health insurance is being used to create a profit for what is effectively a multinational, although it calls itself a religious order, and is exporting the profits from a private hospital out of this country to finance the activities of a religious order. I do not think that is the function of the Irish health services. That it is an area which ought to be scrutinised and examined by the Department of Health.
Let me warn the Minister and the Government that the idea that privatising the health service generates greater efficiency or generates a more responsible use of money is a palpable load of nonsense. The country in the world which spends the greatest proportion of its gross national product on health services is actually the United States of America. In the US they spend 10¼ per cent of their GNP on health expenditure. A large proportion of that is private but they spend more than any of the Western European social democracies, most of whom have socialised medicine in one form or another. In the US they spend all that money to produce a health service which is in no visible or measurable way better than what we have here. Their life expectancies, for instance, are dramatically less than those of the northern European social democracies. Equally infant mortality in the United States is a disgrace to that country; it is closer to Third World countries than it is to First World countries. Infant mortality, for instance, amongst minority groups in the United States is dramatically higher than it is amongst the population of Cuba. The United States is no model for a future health service and those in our health services, or in Government, or in politics, or in economics who suggest a privatised health service as a substitute for what we currently have are deceiving the Irish people. It would be a costly failure and that is why there is so much wrong with the philosophy behind this Bill.
Health services ought to be free at point of delivery to everybody in our population. General practitioner services, hospital services should be free at point of delivery to everybody and we should be prepared to raise the taxation to pay for that. The idea that we produce these mickey mouse, half-way-house contributions which exclude the delicate sensitivities of the already well-off and penalise further the marginally poor in order to force them to pay for an inadequate health service is not a philosophy for a national health service; it is a philosophy for collapse.
There are a number of other questions that arise in the Minister's speech. He inform us, and he obviously takes great pride in the fact, that persons who are in arrears on health contributions are not refused hospital services if they need them. Now, I would be the last to object to that because I believe that nobody should ever be deterred in any way from using a hospital service he needs because of the fact that he cannot afford to pay for it. What is the position of somebody who perhaps — and I know of a case myself — through a lack of personal ability to organise himself does not have a medical card and needs those medical services, particularly general practitioner services? It is not the general practitioner's fault. He or she has to make a living but if a person does not have a medical card and is seriously ill he will not get general practitioner services without a medical card and if he does not have a medical card, he can either depend on the goodwill or charity of the GP or he will not get it.
I know of an unemployed man who has been buying drugs for a psychiatric illness because he did not have a medical card. I cannot understand why those who are relatively well off, i.e., the farming community, and who do not bother paying their contributions, should be treated more favourably than those who are poor, disorganised and possibly not feeling very well and neglect to renew their medical cards. I do not see why one group who are sick should be treated with sensitivity and other groups who are sick should be told: "That is tough, but you will have to pay or you will not get the service." I find that reprehensible and I think it is more to do with the political clout of one group than with any evidence of evenhandedness.
Regarding the arrears of the farming community, I noticed the Minister told us what the arrears were at the end of 1987. I would like to know what the arrears were at the end of 1986. He gave us an interesting combination of figures but he did not make it clear in his speech whether the arrears at the end of 1987 were bigger than the arrears at the end of 1986. Whether or not a particular sum of money was collected in 1986 or 1987 is not the issue. What is the issue is whether the amount of arrears at the end of 1987 was larger or smaller than the arrears at the end of 1986. If it was smaller, I congratulate both the Government and the health boards. The health boards have shown a marked reluctance to do anything about it but I am delighted that they are now doing it. If the arrears are going up then the amount being collected is an indication that the problem is getting worse more slowly than it was before and that is not any real substitute.
There are a few other matters about which I should like to talk. I would like the Minister to reflect on the conditions of hospitals and the increasingly frequent charges. The Minister and his Department must get journals like the Irish Medical Times which, after a slow beginning, has now begun to talk a lot about the health cutbacks and begun to tabulate and document the increasing concern of the medical profession about these cutbacks. I would also invite the Department of Health, and the Minister in particular, to consider this: cutting back on the size of an inefficient organisation is no guarantee that the resultant organisation will be any more efficient. It will simply be smaller and equally inefficient and, therefore, produce an equally inefficient service which will simply be available to a smaller number of people.
It is a myth to imagine that simply cutting back on the funds available to a health board will improve their efficiency. That is a presumption about the quality of management, about the quality of control, about the quality of organisation which is not justified on any objective grounds. It is a presumption that is based on perceptions of how people operate, which I do not think are justified by the facts.
If you want to run a more efficient health service you must create the structures on management and control which make it more efficient. That involves dealing with some of the most important vested interests. I do not know how many Members of this House — and I do not know if the Minister is in this position — have actually read the common contract for consultants, because there cannot be a more extraordinary document defining the relationship between a public service employee and his employers than the common contract of the consultants. It is a series of escape clauses to avoid accountability by the consultant, to avoid any sort of accountability between the consultant and his or her employer. They cannot be expected to be there at a particular time; they can be expected to do certain things provided they are consistent with their obligations as a doctor. It is a most extraordinary contract and, may I say, it is no credit to the person who is responsible for it who, unfortunately, is the present Taoiseach.
One of the great ironies is to hear the Taoiseach talking about the extraordinary expenditures in the health service when a lot of it was presided over by his good self. I would find it much easier to take seriously a lot of what is being said by the Government if they were prepared to deal with the issue of the common contract for consultants which is a recipe for abuse, a recipe for privateering and a recipe for people to do a minimum in public hospitals in order to guarantee what they would regard as the minimum, which is £28,000 a year, and leave them with ample scope to carry on expanding private practices.
I find it astonishing that nobody regards it as peculiar that people who are supposed to be consultants in the public service hospitals have the time, resources and energy to be involved in large scale private hospitals themselves. As far as I am concerned, if we want to pay our consultants 50 per cent more, let us do it on condition that they become exclusively employees of the public health service. This mixture of public and private health service many of our consultants are providing is an absolute disgrace and if we are talking about equity, if we are talking about efficiency and if we are talking about justice, we must talk about those who are a critical and fundamental part of the health service.
On another occasion, if I have more time, I would like to talk about the consultant ethos, the remarkable, almost Godlike apparitions who descend upon hospital wards every morning. Everybody must fawn before the consultant and this person becomes God, the deity, and a lot of other incarnations as well for a couple of hours. I do not accept that any profession is entitled to that sort of obeisance and if we are to develop an efficient health service one of the myths that has to be disposed of is the myth of the all-powerful consultant.
The truth is that in most public hospitals most of the hard slog is done by junior doctors, irrespective of who gets the credit for the work at the end of it. I say that as one who is married to somebody who has been both a junior doctor and a consultant; so, I am not taking a particular brief on this. I am simply repeating what I know to be the case, which is that the real work in most of our public hospitals and most of our public wards is done by junior doctors. Most of the information I have about how consultants operate I have from the same source to which I have just referred.
It would be very tempting to oppose these regulations, but the point has been made to me that, however minuscule it is, it is a step in the direction of equity. It is a step, though admittedly a pathetically small step. I do not see why somebody with the income of, say, myself, which is substantially in excess of the income limit here, should be exempted from paying a health contribution while somebody else on a lesser income and with greater pressure on that income should be expected to pay it on all his income. I cannot understand how that could be just, proper or equitable.
May I, in conclusion, refer to one thing and that, of course, is that this used to be a contribution which guaranteed people free health services. It no longer guarantees that because they must pay the hospital services charge if they are in-patients and they must pay a charge if they are out-patients. Can I inquire of the Minister what his Department have to say to that particularly vulnerable group of people, older people, people who are above the age limit for entering the voluntary health insurance service who now have to pay the £10 a day because they do not have medical cards although they are eligible for hospital services? I understand that about 30 per cent of our old population would be in that category. They are not acceptable, because they are too old, in the VHI and they are now stuck with the prospect late in life of having to pay for what is a deteriorating health service.
The VHI will not accept them because they are too old. They are not eligible for a medical card because their income is in excess of the income limit for a medical card, so they are actually stuck. They are a particularly vulnerable group, a group who will quite clearly be in greater need of health services than other age groups in our society and yet they will be stuck with paying for those services because no provision has been made for them. It would not be so difficult and it would not be so expensive to exempt persons over 65 years from the charges for hospital services.
The regulations should probably be accepted. I find it more and more painful to ask people to pay for such a deteriorating service but it is a step towards equity and, indeed, it is quite possible that, if we were to get all of our population to pay on all of our income, we would not need these appalling cutbacks in the health service.
The Labour Party will not be opposing these regulations on the basis that they represent a move in the right direction. I had a certain feeling of nostalgia listening to Senator O'Connell earlier when he proposed, what would be very dear to my own heart, that there should be no limit on the income assessable for health contributions. I will not be opposing the measures, but they do not go nearly far enough.
Generally, the Labour Party's greatest worry is that at the moment a two-tiered health service is emerging. We find that if you have VHI cover or if you have money you get the service; if you do not have money you do not get the service. A case came to my notice recently of a four year old child with a very serious heart condition. The parents were told last November that the child needed an operation to remove an obstruction that will cause his health to deteriorate gradually. They were told that the operation would be carried out in five to six months. They discovered a couple of weeks ago that the child is not even on the waiting list in the hospital. These parents, obviously and quite rightly, are very distraught. I came across the case yesterday of an old man who is in great discomfort and requires surgery. His family were informed that he will get to see a consultant in 12 to 18 months time.
Seven hospitals have closed in the south eastern region. We have supposedly a new regional hospital under construction at Ardkeen but I would like to put a question to the Minister on this. At the prices that obtained in 1984 the construction of the hospital was scheduled to cost £40 million, the equipping of the hospital to cost £10 million and that to staff and run the hospital would cost £26 million. The South Eastern Health Board in their budget last year allocated £34 million for hospitals generally. This year £31.5 million was allocated, with about £20 million allocated to Ardkeen. The question I seek an answer to is: where are the funds to come from to staff and run this regional hospital, if and when it is finished.
On a more general level, I believe that large areas of the services relating to senior citizens and to the handicapped have not been tackled heretofore. It has come home to me very much, in the region where I live, that the speech therapy services for disabled children are very defective. Disabled children, in particular those with Down's Syndrome get something like nine-and-a-half minutes speech therapy per week. There is an ongoing problem resulting from this. Some children require therapy in order to develop their facility to speak. They understand speech but become totally frustrated because they are unable to express themselves. They are unable to speak because of the lack of specialist help. They will become less adjusted and less fulfilled adults and, in many ways if we look at it purely in monetary terms, they will cost the State much more because there was no input at the time they most needed it.
We are concerned about the provision of day care for the severely and profoundly handicapped, in particular as severely and profoundly handicapped people get older. As they become older their parents need to get a rest during the day and day care for the handicapped becomes more and more important. There is a very great need for such a facility in my area. Early in 1987 we had 84 acute surgical beds in Waterford city — the capital of the south-eastern region. When cutbacks which the health board have decided to effect come into operation the number of acute surgical beds in Waterford will be reduced by 50 per cent in 12 months. There is a huge waiting list. At a recent meeting in Waterford we were informed by the medical staff in Adrkeen that only absolute emergency procedures are being carried out and that people who have less important or less pressing surgical needs will not have their needs met.
We in the Labour Party support this very minor adjustment towards equity. I hope Senator O'Connell will make his views heard within the Fianna Fáil parliamentary party that there should be no limit on the income on which health contributions are assessed. I hope he will press that point strongly and fully inside the party.
In conclusion, a two-tiered health system is evolving. There is absolutely no doubt about this. The evidence is quite clear to me in my own area. Private patients who have VHI cover or who can pay their way get the treatment. The people who are actually paying the health contribution, the people who avail of the hospital services card are getting a reduced service. This is totally unjust and the Government stand totally condemned for what has happened to the health services.
I wish to welcome the introduction of these regulations. As Senator O'Shea has pointed out, they are a step in the right direction. I wish to ask the Minister seriously to consider what Senator O'Connell said in view of his medical experience and his deep knowledge of the health services over the years, of the various difficulties he sees and which all of us know are arising. I hope the Minister is fully aware of the grave deterioration in the health service and, in particular, the service which is provided for vulnerable people in our community, the old and the handicapped.
I am extremely concerned about the deterioration in the health service in the south-eastern region. Seven hospitals have closed in a matter of nine months in the south-eastern region. Several wards have been closed in other hospitals including a gynaecological unit in St. Luke's Hospital in Kilkenny. Women seem to be taking the severe brunt of the cutbacks in the south-eastern region this year.
It is not surprising that health board members are put in the unenviable position of having to make very difficult choices between the closure of hospitals or the curtailment of services when the Minister's Department have made a cutback of £10 million in the budget allocation for the South Eastern Health Board in 1987 and 1988. That is a savage cutback. Administrators and health board members find it very difficult to balance the books at the end of the day.
The health service in the south eastern region has deteriorated to such a degree that ministerial intervention may be necessary to provide finance in the latter part of the year to keep the present appalling service going. I was taken aback recently by the closure of a district hospital in New Ross, County Wexford. The health board members were asked to make the difficult choice between maintaining the existing service in Wexford County Hospital or closing a district hospital in New Ross. On receiving the news of its closure the patients at the district hospital were caused considerable distress. It is notable — and the hospital can verify this — that a number of deaths occurred in that hospital following the announcement of its closure, a greater number than was normal. I appeal to the Minister to look at the various cuts and savings he is trying to implement in the health boards and to be a little more caring about the degree to which these cuts are being implemented.
I want to refer to the controversy about the collection of the health charges. The Minister referred in his contribution today to the moneys owed to the health boards by the farmers and the self-employed. There has been an argument between the farmers, the Minister for Finance, the Minister for Health and the health boards over the collection of that money. I suggest that matter could be resolved easily. The difference arises over the difference between gross income and net income. People have now developed hang-ups about this terminology. If the words "total income" were used as in accountancy systems — in accountancy terms total income has a much different meaning from gross income — it would take into account the capital allowances which are subtracted from the gross income in order to arrive at the contribution they should make. The investment made by farmers and the self-employed — and anybody in business will tell you this — is essential if you are going to keep a business going. There is no way that anybody in a Government Department or any public representative can legitimately say that an investment in a business, no matter what it is, is not necessary and is something which should not be taken account of as a source of income. After all, these people are creating much needed employment in the community. They are prepared to pay their contribution but they will pay it on the same basis as everybody else. That does not exonerate anybody from not paying their share of the health contribution. I am glad to see that substantial inroads are being made by the Revenue Commissioners and the health boards into getting that money in which is so essential to keep the very basic health services intact.
Senator Ryan referred to the VHI and to the consultants. The VHI are facing a very serious problem. We have had such an emphasis on the voluntary health insurance scheme that many people have joined it over the past year. Many claims are being made on the VHI and, because of this, there will be a severe financial crisis in the VHI in the next couple of years. There is no way the VHI can withstand the number of claims being made on them at the moment. The recent statement by the Minister for Finance in the budget that he is going to clawback 35 per cent from the people who introduced the service to the patients will certainly reduce the acceptability and the attractiveness of that scheme for medical personnel who are taking the pressure off the public hospitals.
I have no hangups about public or private care. Where people are in a position to afford private care, the resources saved as a result should be pumped into the public hospital system. We should be able to maintain essential patient care for people who are not so fortunate as to be in a position to afford the Blackrock Clinics of this world. In order to assist the VHI we should impose a ceiling on each service given and claimed for under the VHI system.
The system is being abused by some people. The general public seem to think that consultants can just think of a figure which the patient claims from the VHI. Checks and balances in claiming hospital benefit from the VHI do not seem to exist. The Voluntary Health Insurance Board and the consultants seem to be able to do what they like, without any ministerial intervention or any ministerial misgivings about the claims being made. There are indications in the media that the VHI are looking for an 8½ to 9 per cent increase in their premiums. I would like the Minister to confirm or reject that when replying. No increase should be given to the VHI until the Department of Health have carried out a total investigation into the running of the affairs of the VHI. The policyholders in the VHI system should be seen to get better value for money and the health system should be seen to get better value for money. The general public should not see the VHI as a rip-off for consultants. I urge the Minister to carry out a detailed investigation into this matter.
The Minister referred to the introduction of PRSI for the self-employed. I also have misgivings about this system because the introduction of PRSI for the self-employed is suggested in the Programme for National Recovery on the basis of social equity. The people who signed that programme did not know the full impact this measure will have on the Exchequer in the years ahead. The Government are getting a once-off income from the self-employed which is perhaps essential to the Exchequer at present. When we start to pay out pay-related benefits and contributory old age pensions to the self-employed, how much will that cost the Exchequer and the general taxation system in the years ahead? The Exchequer will lose considerably more than it expects to lose.
No thought whatsoever has gone into the introduction of the PRSI system for the self-employed. It is estimated by some commentators that it would take 15 per cent of income to bring about a self-financing scheme of PRSI for the self-employed rather than 3 per cent this year, 4 per cent in 1989 and 5 per cent in 1990. I would appeal to the Minister to have a rethink about the introduction of PRSI for the self-employed and to see the full impact of this measure in ten years time. Enormous resources will have to be taken out of general taxpayers' pockets, at a time when we are punch drunk with high taxation. We should rethink this scheme. Perhaps the present system is catering adequately for social equity.
I agree with what Senator Ryan said about consultants. I am glad he clarified the position with his detailed information about consultants. I certainly would not like to contradict anything he said, in view of the intimate knowledge he would have of that sector of the community. I am very sad that more effort is not made by the Department to put the emphasis on patient care, rather than being seen to adopt a sledgehammer approach, an ill-thought out approach, an ill-planned approach to bring about the savings necessary in all Government Departments at the moment.
I am sad that as a nation we must look now in many instances to the national lottery to finance various projects in the health services. That has severe connotations for everybody. The basic essential requirement of any country should be to provide essential health care for the old, the sick, the infirm and the handicapped. The national lottery now seems to be the source of finance for many services.
It was since 1930 — the Sweepstake.
It is sad that out of our general resources we cannot provide sufficient money to make sure that the sick, the old, the infirm and the handicapped are looked after.
Unfortunately waste in the health service still continues with the over-prescribing of drugs and duplication in administration. We have eight health boards for a small population. Still the Minister arbitrarily gives a figure to each health board each year and asks administrators and health board members to make difficult choices about hospital closures rather than about cuts that could take place elsewhere to eliminate waste. If the Minister took on board only one proposal that the Fine Gael Party are making, a prescription charge, this would bring in £3 million to the health boards and save about £16 million in the over-prescribing of drugs. We have a punch drunk society in relation to the amount of drugs being given out indiscriminately by the medical profession. I appeal to the Minister to bring the views of Senators here today to the Department and to rethink some of the ill-thought out decisions that are being put into operation by the Department.
I wish to express to the Senators who have participated in this debate the general consensus that exists in relation to the Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1988. From the contributions I have heard there seems to be total support for the proposals before the Seanad today.
I would like to refer to Senator Fennell's comments, first of all, in relation to the £5.7 million outstanding from the farmers. I have the details here of the action taken by the health boards. Senator Fennell was interested to know exactly what was happening in relation to the work being carried out by the boards. The calculation of the average earnings in transportable goods industries is based on both male and female earnings, that is, an average of both is taken into consideration.
In relation to the action being taken by the health boards Senator Fennell will be interested to know the following details. The Southern Health Board have initiated proceedings against those with arrears in excess of £600 and at a later date those owing lesser amounts will be tackled. The South Eastern Health Board have decided upon a figure of £50 and proceeding have been taken against about 9,000 farmers. The Mid-Western Health Board have issued solicitors' letters to all those in arrears and for the present proceedings are being taken against those owing more than £100, about 2,100 defaulters. The North Western Health Board have decided to take legal proceedings against all those with arrears exceeding £10. The Western Health Board have initiated civil proceedings against 444 farmers for whom details of reckonable income were available. While no cases have yet been heard, there has been a very good response to this course of action. On 1 September 1987 these farmers owed £193,500. This figure was revised to £147,000 when actual accounts were produced and estimates were re-examined and, since then, a total of £47,000 has been collected from those 444 farmers.
The North Eastern Health Board are taking two courses of action to collect arrears. Civil proceedings are being taken against the seven or eight farmers from each county who owe the greatest amounts based on reckonable income. Fifty farmers from each county who owe the greatest amounts based on the health boards' assessments have been referred to Dun and Bradstreet — Stubbs Gazette — and there has been a very good response to this course of action. The Midland Health Board are also taking two courses of action to collect arrears. Civil bills were issued to about 300 farmers and about 650 cases have been referred to Dun and Bradstreet. The Eastern Health Board have billed all those with arrears of at least £200 and there has been a good response either in payment or in the provision of additional information on which revised assessments can be based.
Senator O'Connell made a point in relation to the ceiling figure. It is related to the question of entitlements to free consultant services. If you were to remove the ceiling, you could find yourself with demands for free consultant services from people over the ceiling figures. The number of people earning in excess of £15,500 is fairly small, say about 15 per cent of the workforce. Amounts coming in by removing the ceiling would be very small now — a rough estimate would be between £3 million and £4 million. We would have to do a lot of calculation to get it exactly right. It is the estimated figure and I want to make that clear. This must be viewed against the £110 million now being brought in by way of health contributions. I take special note of the general consensus in the Seanad in relation to removing this ceiling, provided that removing this ceiling would not give rise to further demands for public beds. That is the balancing decision we have to make in the Department and the views being expressed——
In Britain there is no demand.
Fair enough. The point has been raised again about the use of having a debate in the Seanad on these matters. Points put forward by the Senators are certainly taken into consideration by myself, the Minister, Deputy O'Hanlon, and the Department officials who are here at present. All of the population is entitled to accommodation in public wards. That is a point made by Senator O'Connell. The charge of £10 per day to a maximum of £100 a year is very modest when the real cost of hospitalisation can be as high as £150 per day. Those who can afford to pay consultants' fees, that is the top 15 per cent of the population as was said earlier, are required to pay.
We are all concerned about this whole question of waiting lists, but we find waiting lists arise only in the case of elective procedures. Urgent cases are dealt with as a priority, and that is a fact. With the rapid explosion in health services costs in every country in the developed world, every avenue must be explored to achieve savings without the diminution of services to patients. I am satisfied that Ireland maintains, by international standards, a health service which is second to none.
We should be more positive. There is a tendency to highlight the negative side of the health services. That is very easy to do and it can be very emotive at times. I think it is an awful pity. We should also commend the work being carried out in our hospitals and by the health service generally. We can compare it with the service in the most developed democracy in the world, America, and I would say we have a far better service than is available there.
The yield from the health contributions, as Senator O'Connell mentioned, is actually £110 million in a full year. The 1988 figure will be in that region. If we bear in mind that the overall cost of the services is £1,300 million, this gives us some idea of the cost of the health services. This increase will bring in just £1 million which is a very small increase and means only £6.25 per week to any person who has £15,500 a year or over.
Senator Ryan, who is not here at present, mentioned admission to public hospitals. Admission is based on the assessed medical priority and it is a matter for the medical professions involved. It is a clinical decision and it is one that has to be made by the medical personnel who are in charge at a particular time. I disagree totally with Senator Ryan's view on the infant mortality rate. This has been declining and I see no reason why these alarmist comments are being made. They are unfounded. They only tend to disturb the public generally who have problems. I am sorry Senator Ryan is not here.
An Leas-Chathaoirleach
It is disorderly to refer to the presence or absence of a Senator.
I apologise for that but I wish to make the point that I do not like referring to a Senator or making comments on his comments unless he can refute them. I am making a case for privatisation and I feel that Senator Ryan should consult with his colleagues or his fellow people in the Labour Party or The Workers' Party who voted in Dáil Éireann for privatisation of a hospital. In fact, under a previous Labour Minister, privatisation blossomed over that period. I am not criticising that. I am only stating an actual fact.
On the point also made by Senator Ryan in relation to the tax relief on VHI subscriptions, this now costs the Exchequer about £40 million per annum as against the VHI contribution of about £30 million to the public hospitals. You have to take into account VHI payments which support private hospitals. If the private hospitals were not there patients would have to go to public hospitals thus bringing heavier charges to the Exchequer. All in all, the income tax relief on VHI subscriptions does not impose a net burden on the Exchequer. This should be borne in mind. It was considered very carefully and it was decided to retain this particular tax incentive. I think it is a reasonable point because people are making voluntary contributions to provide the services.
Of course, we would all like health services to be free but, unfortunately, somebody has to pay at the end of the day and those who can afford to pay should pay. We cannot afford a free service in this country, and that is simply it. Health contributions serve to focus attention on the vast cost of the health services and we have to bear in mind that the actual cost has to be collected in income tax and other taxes which are such a heavy burden on the State.
Senator Ryan referred also to the common contract for consultants. He must be aware that this is being renegotiated at present. We are all aware of some of the problems associated with the existing common contract. In fact, meetings are taking place at present.
Senator Ryan also referred to cutbacks. The Senator and this House are well aware of the critical fiscal situation facing this country. We were faced with an impossible burden when we took office in 1987. We had to take the action we took to save the system. Savings have been effected in such a way as to minimise the effect on the patients. We should also bear in mind that the actual allocation for the health services is still very high.
The public-private mix has served the country well to date. Private practice has allowed the best professionals to be attracted into the public system. This can only benefit the overall system. Charges for health services are not required from medical cardholders. Senator Ryan expressed some concern about people making formal application for medical cards. In relation to any charges, the chief executive officers of the health boards have discretionary powers, which they use quite often. He made a point in relation to people over 65 years of age but many of them have medical cards. Those who have not got medical cards can be treated on a discretionary basis. We have a very humane approach to these matters when they arise.
Senator O'Shea referred to Ardkeen Hospital in Waterford. This is not relevant to the debate here today. It is a matter for further discussion. Senator O'Shea referred to private hospitals. I want to make this point clear because people are criticising private hospitalisation. The Labour Party and The Workers' Party will have to realise that they voted in Dáil Éireann for privatisation. I want to remind them that there was an increase in private hospitalisation during the period of the last Coalition Government, under a Labour Minister. Let us be fair about it and not have this hypocrisy about private hospitalisation. When a party vote for something in this House it is a public statement of their real political affiliations and let them stick by that.
Senators Ryan and O'Shea also referred to the cutbacks in beds. They always sound dramatic, but when you look behind the scenes there is a far more economic use of the beds now. Acute beds should be used for acute patients. That is the case. Unfortunately, the occupancy of beds in some hospitals was excessive. The present restrictions have concentrated the minds of the professionals and the consultants, and far better use is now being made of the acute beds in the hospitals. Furthermore, I believe that patients are being treated very well. It is alarmist to talk about the type of problems which arise.
Senator Hogan referred to hospital closures and cutbacks. This is not really relevant to the debate here today. In reality, every country in the world is in the same position. The cost of health care has exploded throughout the world and every country is making a determined effort to cut expenditure. We have to take that approach. We have no alternative. The numbers in the health services had increased dramatically over the years. It is clear that the quality of services did not improve in proportion to the increase in the number of people employed in the services and the additional costs being imposed on the public by the Department of Health.
Regarding another point made by Senator Hogan, the capital allowances will be deductible, when the new regulations are passed, from 6 April 1988 by the self-employed. This was announced in the budget. This is a matter for the Minister for Social Welfare and the Minister for Finance. I am not that convinced about the opposition to the contributions from the self-employed.
As a person who was self-employed before coming into Dáil Éireann, I consider that to make a contribution to the Exchequer entitles you to a contributory old age pension on reaching 66 years of age. Some years ago I was a member of an old age pensions committee and some Members of this House may also have been members of old age pensions committees. I found that those who did not take any action to preserve their future were rewarded and those who had taken steps to provide some sort of security for the future were handicapped. Basically the maximum pension was awarded to a person who took no action whatsoever to have savings and anyone who had savings had them deducted from the pension.
In this case this will remove the demeaning system of assessment. In my own constituency farmers and the self-employed generally have to go through this demeaning means test. At present pensions are being awarded from the Exchequer without any contribution. Surely, in the years ahead, when this really comes into operation, pensions will be paid across the board to those who contribute. I think it is a welcome development and I am delighted the Government are proceeding with it. I feel I can justify it to the self-employed. In relation to farmers and others, the capital allowances will be deducted when the new regulations are passed. That concession was announced in the budget and it should be very welcome.
Senator Hogan referred also to the Voluntary Health Insurance Board. He made the point that they were getting into financial difficulties. I would remind Senators that last year their reserves stood at over £30 million, the highest recorded by the VHI to date. I realise that they have a certain draw on their reserves at this stage. Nevertheless, the Voluntary Health Insurance Board are in a very secure position. The reserves cover all their costs and liabilities. I can state categorically that we have not received any further application for an increase in subscriptions because, as Senators are aware, an increase was given recently. I presume Senator Hogan was referring to the last increase which has now probably been sent out to VHI policyholders. Senator Hogan also mentioned that it was roughly a 9 per cent increase. This is a cumulative increase over a period. We granted an increase in the region of 6 per cent.
I am sorry I did not know the protocol in relation to absent Senators but I always like to confront Senators and not speak behind their backs. That is why I made the point. Again, I express my appreciation to this House for the comments made here today. We will have them considered and assessed. Some very good points were put forward here in relation to the ceiling which should certainly be considered very carefully.
Question put and agreed to.