I am very pleased to bring the Health (Amendment) Bill, 1991, before the House today. This Bill is important legislation which will provide for the restructuring of eligibility for health services, as agreed by the social partners in the context of the Programme for Economic and Social Progress adopted earlier this year. The Bill also provides a statutory basis for the operation of a residency qualification in order to avail of health services and provides for the abolition of the income ceiling for payment of the health contributions, as announced in the budget.
I propose to discuss each of these areas in detail. First, however, I consider it important to set out the background to the Bill and the reasons for making the proposed changes to the current eligibility system.
The Bill arises from the Programme for Economic and Social Progress, which was agreed between the Government and the social partners at the start of the year. It is appropriate, therefore, that I should remind the House of the major commitments which it contains in relation to the health services. The programme commits the Government to investing, over a seven-year period, no less than £100 million of additional capital expenditure to the development of community-based services for the elderly, for persons with a mental or physical disability, for the psychiatric services, for child care, for the improvement of dental services and for the provision of new health centres. We are also committed to significant increases in the level of day-to-day spending on these services, so that we will, by the end of the seven-year period, be spending £90 million more than the present level of current expenditure, in real terms. The Government are committed to providing additional funding in each year's budget to achieve these targets, and a significant start was made with the allocation of £8 million this year.
It is also very important to stress that the development of community-based services which will be possible as a result of this expenditure is going to take place in a very co-ordinated and planned way. Over the past few years working parties and study groups have carried out detailed reviews of the various services and have identified the necessary direction and priorities for their development. Senators will be aware of the work of, for example, the Review Group on Health and Welfare Services for the Elderly, the Study Group on Psychiatric Services and the Review Group on Mental Handicap Services. Under the programme, the key recommendations of all of these reports will be implemented.
It would be very easy to provide health services to everyone's satisfaction if money were no object. Unfortunately, the costs of providing health care are so high, and the potential demands on the service so limitless, that we will always face resource constraints and the difficult choices that go with them. This will be true no matter what level of funding can be provided. It is crucial, therefore, that our decisions on the development of services and the way in which we make them available are based on the most thorough and expert analysis of the needs to be set and the best way of meeting them. The Programme for Economic and Social Progress involves a radical overhaul of the health services, and I believe that one of its great strengths is that the various proposals are backed up by the research and analysis of the expert groups that I have already mentioned.
The programme's commitments in relation to eligibility provide further examples of the Government's approach to taking careful account of expert research and analysis in adapting the health services to meet changing circumstances in our society. The report of the Commission on Health Funding, which has been generally acknowledged as an exhaustive and most valuable examination of the funding and administration of the health services, was published towards the end of 1989. The Government then embarked on a consultation process on the commission's recommendations to ensure that we had the firmest possible basis for our decision on their implementation.
The commission made a number of recommendations in relation to eligibility. These were subsequently endorsed by the National Economic and Social Council in their important report, A Strategy for the Nineties, which provided a significant backdrop to the discussions with the social partners on the new economic and social programme. The Irish Congress of Trade Unions, in particular, pressed for the inclusion of the measures in the programme and this was agreed between the Government and the social partners.
One of these measures, which did not require any amending legislation, was to have the chief executive officers of the health boards carry out an early review of the methods of assessment used throughout the country for determining eligibility for the medical card. There is a need for these procedures to be flexible to ensure that no person in genuine need of a medical card suffers hardship through inability to obtain one. However, the commission had also highlighted the need for uniformity and consistency in the assessment procedures so that persons in similar circumstances are assessed similarly in all areas.
I am pleased to inform the House that this review has already been completed and that, on foot of it, the chief executive officers have now agreed uniform procedures for assessing eligibility for the medical card, which will operate consistently in all areas. In addition, the chief executive officers have agreed that income from the social employment scheme and the family income supplement will in all cases be excluded when an applicant's income is being assessed. These changes are very welcome and have been sought for some time.
The removal of the income limit for eligibility for category 2 health services was one of the major recommendations of the Commission on Health Funding. At present there are three categories of eligibility: category 1 are entitled to the medical card and to receive a comprehensive range of services; category 2 are entitled to the hospital services card and receive a more limited range of services, which does, however, include free hospitalisation subject only to the £12.50 per day charge up to a maximum of £125 in any 12 months; category 3 have the same entitlements as category 2 with two exceptions: they cannot avail of consultant care as a public patient and they cannot avail of the free maternity care and infant welfare service which is provided by general practitioners. In both cases, they must arrange to receive these services privately.
It is important to realise, therefore, that the difference between category 2 and category 3 relates only to a person's liability for professional fees. Everyone in either category has the same entitlement to a bed in a public ward, paying only the £12.50 charge where it applies. The removal of the income limit for category 2 — in other words, the abolition of category 3 — does not have any effect whatsoever on the number of people entitled to public ward services.
The commission put forward a number of arguments for removing the income limit — arguments subsequently endorsed by the National Economic and Social Council. These arguments can be summarised in two sentences: first, that it is impossible to operate the income limit fairly; secondly, that the existence of category 3 can, in practice, work against equitable access to public beds.
As regards the first of these arguments, there are several well-known difficulties in the operation of the income limit. Ostensibly, the purpose of the income limit is to identify a cut-off point beyond which a person should be able to afford to pay for any necessary consultant care for himself or herself and for any dependants. In practice, the level of income alone is far too crude a measure to identify who can or cannot afford these services, since it takes no account of differing circumstances such as the size of the family, whether anyone in the family needs regular medical care, and so on.
Furthermore, the only way to operate the income limit without having a very complex administrative system is to rely on the document which most people can produce as evidence of their income, that is, the form P60, or similar documentation from the Revenue Commissioners. Given that half the population are entitled to category 2 services, the House will appreciate the need for a simple method of determining eligibility, and the use of the P60 is ideal in that respect. However, it gives rise to many anomalies. For example, each person in the family who has independent income, below the income limit, can obtain category 2 eligibility in their own right. Since the income limit is £16,700 at present, a family with two salaries of £16,500 is in category 2 despite having a total income of £33,000 — yet a family with a total income of £17,000, from one salary only, is in category 3; a single person earning £16,500 is in category 2 while a large family with a single income of £17,000 is in category 3; a spouse taking up employment, and thus increasing family income, can actually move from category 3 to category 2. This occurs when the spouse of a person in category 3, who, as a dependant, would also have been in category 3, takes up employment at an income below the limit and is thus separately assessed as eligible for category 2.
The second argument relates to the way in which the very existence of category 3 can, in the view of the commission, of NESC and of the Irish Congress of Trade Unions, work against equity of access to public beds. The fact that patients are simultaneously public patients of the hospital but private patients of the consultant — in other words, where a category 3 patient exercises his entitlement to a public bed — involves a danger that consultants may, all other things being equal, admit the fee-paying patient ahead of others, resulting in "queue-jumping" into public beds. There is no administrative device that can overcome this difficulty, since the decision as to which patient is admitted first is a clinical one which can only be made by the consultant concerned. The only solution is to move away from the concept of having fee-paying patients in public beds at all. There are two possible ways of doing this. The first way would be to remove the entitlement to a public bed from those in category 3. This would mean that the difference between the costs faced by those in category 2 and those in category 3 would greatly increase. Since we have already seen the difficulties associated with the method of identifying those in category 3, the House will appreciate that this approach would only serve to increase the unfairness of the system. The second way is to give everyone the entitlement to avail of a public bed, as the public patient of the consultant, but to require fee-paying patients to avail of private or semi-private accommodation. This was the option recommended by all the groups I have mentioned, and it is the approach which is embodied in the Bill before the House.
The new arrangements will be as follows:
—everyone, regardless of income, will continue to be entitled to a public bed as a public patient;
—those who wish to be public patients will not be liable for consultant's fees;
—where a person opts to be the private patient of a consultant he or she will, of course, continue to be liable for professional fees;
—modifications in access to beds will be phased-in so that, in general, public patients will be accommodated in public beds and private patients in private or semi-private beds. However — and this is important — emergency cases will always be accommodated even if the appropriate bed is not available.
When the Bill has been enacted the Minister for Health will immediately be making regulations which will provide for the designation of public hospital beds as public and private, and provide that public patients must be accommodated in public beds and private patients in private beds. There will be provision for emergency cases to be accommodated even when the appropriate bed is not available. The regulations will provide for the gradual phasing-in of the restrictions in access to beds over the next three years, to enable the Minister to ensure that the new arrangements are operating fairly and effectively.
In preparation for the new system, the Department of Health have been involved in detailed discussions with every health board and public voluntary hospital, who have been asked to draw up proposals for the designation of public and private beds and for a three-year phased implementation of the modified system of access to these beds. These proposals are being examined by the Department of Health, who are responsible for co-ordinating the overall phasing and for monitoring the new arrangements as required under the terms of the Programme for Economic and Social Progress. It is important to get the balance right in the designation of beds so as to reflect fairly the patterns of public and private practice. Hospitals have been asked to ensure that their consultants are fully involved in drawing up their proposals.
The clear identification of the status of every patient, as either the public or private patient of the consultant, will be implemented in every hospital, for every patient, from next Saturday, 1 June. Also from 1 June, subject to the enactment of the Bill by that date, the income limit for category 2 services will be removed, so that those who wish to avail of public consultant care may do so, regardless of income. The system of requiring public and private patients to avail of the appropriate designated beds will then begin to be implemented, carefully and gradually, to make sure that the transition works smoothly and effectively in the interests of all patients.
The new identification system will also apply to out-patient hospital services. Section 7 provides that, in relation to out-patient services also, the Minister will be able to specify by regulation that where a person is the private patient of a consultant he may, as with in-patient services, forgo his entitlement to treatment as a public patient. It also empowers the Minister to specify out-patient hospital charges for private patients. This is consistent with the general approach now being taken, that is, that private patients of consultants should be regarded as private patients of the hospital as well.
I can best summarise the purpose of the new system by saying it is intended to benefit public patients without disimproving the position of private patients.
Public patients will benefit by having greater access to public beds, as private non-emergency patients cease to occupy these beds. The Department of Health will be ensuring, through their monitoring of the beds designation process, that there is no fall in the number of what would have been regarded as public beds up to now. In certain hospitals there have been beds which are nominally regarded as semi-private but which have up to now been largely occupied by public patients. The appropriate proportion of such beds, based on a detailed examination of their usage, will be designated as public beds to ensure that there is no reduction in the number of beds effectively available to public patients.
The private patients who are occupying public beds will be gradually be absorbed in private and semi-private beds. To some extent, this will be possible by better management of these beds but, where necessary, hospitals will be able to increase the number of private and semi-private beds to cater for the level of private activity. Any increases in the number of these beds will be at the expense of public beds and will be introduced on a self-funding basis.
It is not expected that the changes in eligibility will cause any significant reduction in the proportion of the population who are already insured for private and semi-private care. This view is shared by the Voluntary Health Insurance Board and is borne out by independent research by the Economic and Social Research Institute. There is, therefore, absolutely no basis for the suggestion which has been made by some Members of the Oireachtas in recent months that the new measures will lead to substantially increased pressures on public wards. All the indications are that the benefits to public patients arising from the measures can be achieved without having to increase the number of public beds or to incur additional costs in the public hospital system.
However, the programme contains a commitment to monitor the operation of the new arrangements. If there are teething problems the Minister is satisfied that they will be overcome and he will take whatever action proves necessary in order to ensure that the fundamental objective of equity of access is achieved to the greatest extent possible.
The Commission on Health Funding placed great emphasis on the complementary roles of public and private healthcare. When those who can afford to do so decide to take financial responsibility for their own hospital expenses, for example, by taking out voluntary health insurance, those who rely on the statutory services benefit also since there are more resources available to meet their needs. It is also unquestionable that public patients, and the public hospital system in general, benefit from the availability in that system of the highest calibre of consultant, which is encouraged by the existence of private practice in public hospitals. The Commission on Health Funding, whose primary concern was so much related to ensuring equity of access to services, argued clearly that there was nothing wrong with people being able to get hospital care more quickly by going privately at their own expense, provided that the public patient has a reasonable service and is not disadvantaged as a result of the private patient's access. It is the scope for such a disadvantage, through the possible queue-jumping of private patients into public beds, which is being specifically addressed in the new measures. The balanced mix of public and private healthcare will continue. The programme contains a commitment to ensure that the public hospital system continues to cater adequately for the needs of private patients, and that the important role and contribution of voluntary health insurance is not diminished in any way. The announcement by the Minister for Finance in this year's budget that income tax relief on voluntary health insurance subscriptions will be maintained is a practical and positive demonstration of this commitment.
The Bill also deals with one aspect of eligibility which did not arise from the Programme for Economic and Social Progress. The opportunity presented by the need to amend the eligibility provisions in the Health Act is being taken to provide a statutory basis for operating a residency qualification for access to services under the Act. For reasons which I will now explain, it is necessary to do this in order to ensure that groups such as young Irish emigrants and persons working temporarily abroad are catered for fairly and on the basis of standard guidelines.
It has long been the practice to operate a residency qualification for entitlement to health services in Ireland and, indeed, this is the practice in most other countries also. A person is regarded as "belonging" to the healthcare system of the country of residence. If he needs healthcare while in another country, he is subject to whatever arrangements that country makes for non-residents. This would never, of course, mean being denied necessary treatment, but it can mean being liable for the cost of providing it.
In the absence of a statutory basis for the residency qualification, it has not been possible to have any statutory or uniform criteria for determining when a person should be regarded as qualifying. The Commission on Health Funding pointed out that this can lead to uncertainty, and the operation of different criteria in different areas. Under the Bill's provisions, the sections of the Health Act dealing with the two categories of eligibility will both be amended to insert "ordinary residence" as a qualification. There is also a provision to empower the Minister for Health to issue guidelines on uniform criteria for regarding a person as "ordinarily resident" for this purpose. These guidelines will be for the use of the health boards in deciding on eligibility, and also for appeals officers under the new appeals system on health eligibility matters which is currently being established.
The Bill contains certain safeguards in relation to this issue. Section 9 specifies that the new provision will not in any way affect the arrangements under which residents of EC member states may obtain necessary services, while temporarily in another EC country, on the same basis as if they were living there. The Bill also provides that the powers of a chief executive officer of a health board is available to him to award full eligibility on hardship grounds to someone who would not normally qualify, and will extend to giving eligibility, where it is warranted, to persons who do not meet the criteria for "ordinary residence".
Before formulating guidelines on the criteria for being regarded as "ordinarily resident", the Minister for Health proposes to arrange for discussions between the Department of Health and the health boards on the common problems which arise at present in the interpretation of residence. The Minister's intention is to ensure that anyone with a reasonable case for being regarded as eligible for health services here is able to avail of them. In particular, persons temporarily abroad must be catered for. I am thinking here, for example, of recent emigrants who may not yet have established permanent residence elsewhere, and of people who go abroad to work on short term assignments but would still be regarded as maintaining their permanent residence here. The case of foreign students in Ireland is also one which has given rise to differences in interpretation, and the Minister for Health has in mind to specify, following the relevant consultations, that registration for courses of study beyond a specified duration can be taken as qualifying the student as "ordinarily resident".
Section 8 of the Bill provides for the amendment of the Health Contributions Act, 1979, to abolish the income ceiling for payment of health contributions. In the budget speech, the Minister for Finance announced that this contribution would, from the 1991-92 tax year, apply to all income, as is already the case with the employment and training levy. As the income ceiling was £16,700, the effect of its abolition is that 1¼ per cent of all gross income over that amount will now be payable, in addition, of course, to 1¼ per cent of the first £16,700. A person earning £20,000 per annum, for instance, will pay an additional £41.25, or approximately 80p per week. Persons earning less than £16,700 will not be affected in any way.
There is no direct relationship between the income limit for category 3 health services and the income ceiling for health contributions. They have differed from time to time and, although they have usually been the same, there is no legal or technical reason this should have been the case. It is certainly not the case that the income ceiling on health contributions is being abolished as any kind of a quid pro quo for the removal of the category 3 income limit. The purpose of the measure is to provide some of the very substantial cost of the development of community based services under the Programme for Economic and Social Progress. As I outlined earlier, this will involve capital investment of £100 million over the next seven years, and will also involve yearly incremental increases in the level of current expenditure so that annual current spending on these services will be £90 million higher in real terms in seven years time than would have been the case in the absence of the programme. The total amount of additional spending over the seven years will thus cumulate to several hundred million pounds, and this will enable us to transform our community based services along the lines recommended by the various working parties and study groups in recent years.
In this context, I believe that the decision to draw a greater yield from the health contribution, without in any way affecting those earning under £16,700, is more than justified. This income will also enable any costs to be met which arise from the eligibility extension, although I should stress that it is by no means certain at this stage that the eligibility measure should give rise to any significant extra costs, for reasons which I discussed earlier.
To conclude I wish to summarise the various initiatives contained in the Bill. The Bill sets out new eligibility arrangements which were announced in the Programme for Economic and Social Progress. These measures go towards rectifying a number of anomalies identified by the Commission on Health Funding and the National Economic and Social Council which arise in determining eligibility for hospital services cards. I have in my speech explained in detail the fundamental problems inherent in the current practice of using income as the primary criterion.
The new arrangements will, I must stress, be of significant value to public patients and will lead to more equitable access to public hospital care. In improving the position of public patients, the new arrangements will also continue to ensure that the public hospital system continues to cater for the needs of private patients. Our public hospitals benefit greatly from having a balanced mix of public and private practice and the Government will strive to ensure that this balance is maintained.
In preparation for the new system the Department of Health have been involved in detailed discussions with health boards, public voluntary hospitals and the medical organisations to establish the actual mechanisms for the implementation of the new measures.
The operation of the new arrangements will, as provided for in the Programme for Economic and Social Progress, be monitored by the Department of Health during the three year phasing in period to ensure that the system is working as intended.
I am satisfied that these measures will be effective in improving equity of access to public hospital services and in the light of the huge body of independent support for these measures, I am assured that they have overwhelming support. I commend the Bill to the House.