Dáil Éireann díospóireacht -
Thursday, 22 Feb 1940

Vol. 78 No. 13

Supplementary Estimates, 1939-40. - Vote 44—National Health Insurance.

Mr. Boland

I move:—

Go ndeontar suim Bhreise ná raghaidh thar £11,421 chun íoctha an Mhuirir a thiocfaidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1940, chun Tuarastail agus Costaisí i dtaobh Riaracháin na nAchtanna um Arachas Sláinte Náisiúnta, 1911 go 1936, agus na nAchtanna um Pinsin do Bhaintreacha agus do Dhílleachtaithe, 1935 go 1937, agus chun Ilsíntiúisí agus Ildeontaisí, ar a n-áirmhítear Deontaisí áirithe i gCabhair mar gheall ar Chostas Sochar agus Costaisí Riaracháin fé sna hAchtanna um Arachas Sláinte Náisiúnta.

That a Supplementary sum not exceeding £11,421 be granted to defray the charge which will come in course of payment during the year ending 31st March, 1940, for Salaries and Expenses in connection with the Administration of the National Health Insurance Acts, 1911 to 1936, and the Widows' and Orphans' Pensions Acts, 1935 to 1937, and for sundry Contributions and Grants, including certain Grants-in-Aid in respect of the cost of Benefits and Expenses of Administration under the National Health Insurance Acts.

Parliamentary Secretary to the Minister for Local Government and Public Health (Dr. Ward)

An additional sum of £11,421 is required to meet expenditure out of the Vote for National Health Insurance for the current financial year. The principal item in the Estimate before you is the sum of £12,000 in respect of State Grant on expenditure on benefits and their administration. This is accounted for in the main by the fact that the National Health Insurance Society has in the current financial year paid from its Administration Account about £38,000 more than was expected in respect of interest on and repayment of the loans which it obtained, at the time the societies were unified, to meet the payment of compensation to ex-officials of the old societies and to pay for the erection of its headquarters offices.

Under Section 24 of the National Health Insurance Act, 1933, two-ninths of the amounts paid by the society in respect of interest on and repayment of these loans is provided by the Exchequer. Accordingly, provision has to be made in the current financial year for additional State grant under this head amounting to two-ninths of £38,000, or about £8,443. If this amount is deducted from the sum of £12,000 shown in the Estimate it leaves a sum of £3,557. The expenditure on benefits in the current financial year by the National Health Insurance Society has been higher than was provided for in the original Estimate, and it is expected that the foregoing amount of £3,557 will be required to meet the State Grant on the additional expenditure.

The remaining item of additional expenditure in the Estimate is small. A sum of £295 will be paid to 29 assistant inspectors for providing rooms for official purposes in their private residences. This amount is included in the Supplementary Estimate, as it was not provided for in the original Estimate, the decision to grant the allowance having been made since that Estimate was before Dáil Éireann. The two items of additional expenditure which have been dealt with amount to £12,295, to which has to be added a sum of £1,700, representing a short-fall in receipts to the Vote. The salaries of the staff engaged on work in connection with the Widows' and Orphans' Pensions Acts are recouped to the Vote by the Widows' and Orphans' Pensions Fund. Owing to changes in personnel and vacancies the salaries falling to be recouped in the current financial year will be some £1,700 less than the amount for which credit was taken in the original Estimate. There is thus a total sum of £13,995 to be provided, against which there is a set-off of £2,574, which is the amount expected to be saved in the current year in respect of salaries, etc. The explanation of the saving is the same as that of the shortage in appropriations-in-aid, namely, changes in personnel and vacancies remaining unfilled.

Mr. Norton

I would like to get some information from the Parliamentary Secretary as to what are his proposals for dealing with what I can only describe as the very unsatisfactory position of national health insurance legislation in this country. The Department has had presented to it from time to time over the past 15 years various reports on the valuation of the individual national health insurance societies, and recently the Department had presented to it the report of the Actuary on the unified national health insurance society. The publication of that report is usually accompanied by rather sensational Press headings indicating an alarming increase in the amount of sickness benefit and an alarming increase in the amount of disablement benefit to men and women and an effort is made by a thoughtless examination of the position to create the impression that the national health insurance society is in a very bad way financially. Of course, anybody who takes the trouble to examine the real position of national health insurance in this country will know that probably the position of the national health insurance society in this country is stronger than in any European country at the present time. In this country the basis of valuation of the unified national health society and of the 65 separate societies which preceded it was the British method of valuation. That method of valuation provided for the contingency that you had to be sure you had a sum of money on reserve to meet the claims of the last man who would be alive in the national health insurance society. In the circumstances in Britain that was probably an understandable arrangement because in Britain you had hundreds of individual national health insurance societies each of them competing for members among the insured population. A society might have 2,000 members, and after a given date no other person might join that society; the members might flow to all the other societies; the particular society might be left with 2,000 members, and in this circumstance it had to budget for the possibility that there would be last man in that society or a last dozen men. Therefore, they had to have some actuarial reserves against that person or persons.

The whole position has entirely changed in respect of this country. Here you have not the hundreds of societies you have in Britain. You have not even the 65 societies which preceded the amalgamation. You have one society, one society only, and legislation which compels the insured population to be members of that society. Therefore, there is not in our circumstances the need to provide for the last man, that theoretical factor which is a characteristic of valuations based on standards of that kind. Since our legislation here compels the insured population to join this particular society, so long as the race lives and the legislation lasts, there is never going to be a last man in that particular society. There is always going to be a flowing in of members, even if on the other hand there is going to be a flowing out of members. The contingency of the last man is completely eradicated now by the system of having one National Health Insurance Society in this country. Notwithstanding the fact that the circumstances here are different, we are still maintaining a British basis of valuation, in fact, a basis of valuation which very few people in this country understand, and still fewer can explain. That system of valuation which exists today is standing definitely in the way of any improvement in the scales of benefits for members of the National Health Insurance Society. It is a fallacy to say that the society is in any financial difficulties. Its assets amount to, I think, about £4,500,000. It is probably one of the very few organisations that has £4,500,000 to its credit to-day. In addition to that, it is putting aside each year about £250,000. How a society with that annual surplus and with such substantial reserves can be in financial difficulties passes my comprehension.

If we look at the basis on which National Health Insurance is financed in other countries, we can see the enormous difference between the position in these countries and here. In certain Continental countries where the scheme of National Health Insurance is very much better than ours, where the benefits are higher than ours, and where the scheme of treatment for sick insured persons is something that we have never yet dreamed of, the basis on which the society is financed affords a striking object lesson to us.

Mr. Dillon

What country is that?

Mr. Norton

The best of them, from the standpoint of national health insurance legislation, is Yugo-Slavia, a country with a population of 14,000,000. Take even the former Czechoslovakia, where national health insurance legislation reached a high scale, or take even Germany or Italy. In fact, take the generality of continental countries where there is a decent standard of insurance legislation.

Mr. Dillon

The Italian standard would not attract me.

Mr. Norton

I have not offered that as my test case at all. I have offered Yugo-Slavia. The YugoSlavian standard is something that we are very far short of and officials who have gone out from this country to examine the conditions in Yugo-Slavia have been amazed at the advance there and appalled at how far we are behind them. In these countries they regard about nine months' revenue from the sale of insurance stamps as providing an adequate reserve against claims for benefits but in this country today we have not nine months' reserve of premium income but about seven years' reserve of premium income. While the other societies, in Czechoslovakia or Yugo-Slavia, for instance, regard themselves as thriving on reserves of nine months' premium income, here in this country, with about seven years' reserve we get reports that the society is in a very dangerous financial position.

I do not want to pose as one who sees either a royal or republican road out of this difficult question of national health insurance in this country but I do suggest to the Parliamentary Secretary that the time has arrived when, with the experience which we have obtained of the Unified National Health Insurance Society, the experience which it in turn has gained of claims by insured persons, and bearing in mind that we have departed radically from the circumstances which necessitated the existing methods of valuation, a committee of experts should be set up to examine the existing basis of valuation and to see whether it is not possible to make much less generous provision for the theoretical last man than is being made today.

I am convinced from my examination of the matter that, without at all imperilling the structure of the National Health Insurance Society, without in any way endangering its solvency, by drawing on the experience of other countries and by adjusting the position to the altered circumstances here, not only could we maintain the Society in a very healthy financial position—and, above all, I want to see that done—but, in addition, we could make available for additional benefits the very substantial sum which is now held in the form of reserves. If we are not going to do that, and if we are going to continue the present method of valuation of the assets and liabilities of the Society, then we shall be faced with the alternative of a reduction in benefits or an increase in the rate of contributions, or both.

I do not think either of these alternatives is necessary or desirable, if we alter the basis of valuation and if we adapt our scheme of valuation to the altered circumstances of this country, bearing in mind the fact that there is now no need to provide for the last man, a policy which has been the sole inspiration of those behind the existing valuation system.

Mr. Dillon

Since when has the Custom House grown too small to accommodate the Minister's staff? Since when has it become necessary to occupy the private residences of officials and to pay £295 for this accommodation? I think the leader of the Labour Party has gone very far afield in this discussion on National Health Insurance and I do not propose to follow him. But some day, on an appropriate occasion, I should like him to tell me how it is going to benefit the members of the National Health Insurance Association to spend their reserves now and thus suffer a loss of income from the invested funds—which he wants them to spend now—for the remainder of the life of the National Health Insurance Society.

Mr. Norton

I shall be happy to discuss that at any time with the Deputy.

Mr. Dillon

I should be glad to have the Deputy's explanation in regard to it. I know how exceedingly attractive such a proposition can be. There is no co-operative creamery in the country which has not had to resist during its career the urgent representations of every shareholder to distribute reserves. That is a most attractive policy. It is always pointed out that the going is good, that everything in the garden is lovely and that it is foolish to provide for contingencies that may never arise.

All these optimistic utterances are forgotten in the bankruptcy that invariably follows. As sure as we plunder the funds of the National Health Insurance Society, for the benefit of the present generation, the day will certainly come when the State will have to come to their aid and accept as a direct liability——

Mr. Norton

May I point out to the Deputy that the committee of the society, the chairman of which is the Bishop of Clonfert, has been urging the Department to consider this whole matter, after expert examination of the matter themselves?

Mr. Dillon

Far from urging the society to distribute their reserves in increased benefits to the members now, I think they should be asked to consider very seriously whether it is not vitally necessary to supplement their reserves in some way in order to restore actuarial solvency to the fund. This is a very serious question, one which I need not deal with in all its details now. I do think it right, however, to say that when you are dealing with a fund, which it is your purpose to keep actuarially solvent, you should realise that you are fishing in extremely troubled waters. You are dealing with a problem entirely different from the problem of solvency as it is understood in an ordinary commercial undertaking, and we should not form an opinion on the appropriate measures to be taken without consultation with competent actuaries.

I beg the House, particularly the members of the Labour Party, not to be carried away by generalities as to what is happening in Jugo-Slavia or Italy. I do not know what is happening in Jugo-Slavia, but I do know that, as far as Italy is concerned, if the people of this country were asked to accept the standards of living of the people of Italy or of Italian peasants, they would get convulsions. If we attempted, in the absence of the Italian sun, to impose on our people the standards of living of the Italian workman, I believe our people would die like flies.

There are advantages and disadvantages which flow from severing our connection with Britain. One of the chief disadvantages is that we cut ourselves off from the high social standards which it was possible to attain in that highly industrialised country. We elected to sever our union with Britain just at the moment when she was beginning to get socially-minded. We stayed in the Union while we got all the kicks, but the moment that Britain began to develop social services, as she had done enormously since the war, we cut the painter, and lost the benefit of these social services. We were quite right, of course, to sever the Union, but there is no use in closing our eyes to the fact that if we were still in the Union, our workers, so far as social services are concerned, would be very much better off than they are in this country.

Mr. Norton

But this Act was passed in 1911, long before the Treaty, and it was always administered in Britain more generously than here. The benefits were better there.

An Leas-Cheann Comhairle

I would point out to Deputies that this is a Supplementary Estimate, and Deputies are not permitted to discuss the origin of the scheme.

Mr. Dillon

I agree, but by your indulgence, Sir, the Leader of the Labour Party went very far afield, and it is necessary to say something in answer to his representations, apart from what the Government may say. It is very easy to talk of distributing the funds, but decisions should not be taken on that matter without expert advice as to what the consequences will ultimately be.

Mr. Linehan

I should like to put this point to the House. If there is any question of opposition to an Estimate of this kind, the Minister may say that anybody who opposes it is going to interfere with the payment of National Health Insurance benefit, but actually in this Estimate while there is the sum of only £3,557 provided for benefits, there is a sum of £8,443 being provided for administrative expenses, and £295. for office accommodation for officials in private houses. If we are going to be faced in this House regularly, or irregularly, as has been happening, with additional Estimates of this nature, year after year, I say it is merely an attempt to raise the wind and to get over the difficulty of having to put all your cards on the table at the time of the proper Budget or the proper Estimate. The reason the Government are asking for extra money is because things have not turned out as they expected, and administrative expenses are costing something more than they estimated in the original Estimate. I say that is a shocking position, that in the last financial year we had a Budget as usual in April, then, when our neutrality started in September, we were presented with a Supplementary Budget, and now, within six weeks of the end of the financial year, we are presented with a series of Supplementary Estimates, while later we will have another Budget, all in the course of 12 months. The real point is that like every other Estimate the Government has presented, no matter who they say is going to benefit, the net result will be, no matter how much is spent, that only those who administer it benefit.

If we are going to continue to run riot with expenditure on administration, the Lord knows where we will end. The Minister may explain that he requires this £8,443 because something which was not anticipated happened. I think there could not be a clearer case than that of bad bookkeeping. If Ministers at the beginning of the financial year cannot make up their minds what money they require to fund particular estimates except where there are exceptional circumstances, they should do without that money until the next Budget. It is ridiculous, bad finance, and a bad principle for the country to be faced day after day with additional estimates, 75 per cent. of which practically goes on administration. It would look as if the other items are only brought in as a side line to cover up the scandal.

Mr. Hickey

Can the Minister tell the amount asked for increased sickness and disablement?

Mr. Linehan

£3,557.

Mr. Hickey

Is there anything to show why we have increased illness amongst the workers, having regard to our improved social services? One would expect that the demand for such assistance would be less now.

Mr. Dillon

The Deputy will notice that the amount covers sickness, disablement, marriage, maternity and additional benefits.

Mr. Hickey

What is the amount for increased sickness?

Dr. Ward

I am afraid I could not give that figure now.

Mr. Hickey

I am inclined to believe that more people are falling ill, and I am satisfied that that is due to the low vitality amongst junior workers in industry.

Dr. Ward

I cannot give the details now that Deputy Hickey asked for, but a possible explanation is that the increased extent of the benefits is due to the fact that there would be a less rigid administration of the National Health Insurance Acts.

Mr. Hickey

I do not think that is so.

Dr. Ward

I cannot say more than that that is the likely explanation. Deputy Norton would like to hear the Minister's policy on a very big issue on this Supplementary Vote. The Ministerial policy on that matter has not yet been determined. Deputies who took part in the debate will appreciate that it is a very big question. The actuaries' report of sickness benefit certainly indicates quite definitely that if the present actuarial basis is to be maintained, either benefits must be reduced or contributions must be increased. There is no doubt about that. The question must be examined, and it is being actively examined at present.

Mr. Dillon

The Parliamentary Secretary says that there is no alternative, according to the actuary's report, but to increase contributions or lessen benefits. Surely, one way would be to get the doctors to do their job, and not to mark people on the funds of the society that ought to be signed off, or let the society send down a referee to take off those who should not be on the fund.

Mr. Hickey

I think the Deputy need not worry about that aspect of the matter.

Mr. Dillon

I know that that is not popular. It is the truth, nevertheless.

Mr. Hickey

That is not the way to deal with it.

Dr. Ward

I do not think any increased rigidity in certification would bring about such a material change that on the present actuarial basis the fund would remain solvent. I think we may face up to the question definitely, either of changing the actuarial basis or having to increase contributions and reduce benefits. That matter is being actively examined. It may not be very long until the next Estimate is before the House, when I hope to be in a position to give an indication of definite policy in the matter.

Mr. Dillon

What is the present actuarial basis?

Dr. Ward

It is a capitalised basis as distinct from an assessment basis.

Mr. Dillon

It is not expressed in terms of interest?

Dr. Ward

No. Deputy Dillon raised a point regarding the provision of rooms for official purposes for assistant inspectors in their private houses. Such provision was made in the past. The reason for it is that these are outdoor men. They are on the road all day and bring home files and confidential papers. They write up their reports in their own homes. It is felt and, I think, rightly, that they should have a room in their residences that would be a private room, in which they could lock up these confidential papers, and be able to carry out clerical work without interruption, or permitting anyone to have access to these papers except themselves.

Mr. Norton

Are they not quartered in provincial centres?

Dr. Ward

Nevertheless, they have private rooms. They are not quartered in Dublin.

Mr. Dillon

What are they?

Dr. Ward

Outdoor inspectors.

Mr. Dillon

Ordinary National Health inspectors. There are dozens of them.

Dr. Ward

In this Estimate 29 are provided for. There is an allowance of £12 a year for each.

Mr. Dillon

It is not given to all. It is only given to a select few.

Dr. Ward

Why the number is 29 I cannot tell the Deputy. My advisers tell me that 29 of the inspectors, out of the total number, require this particular allowance at the present time. Deputy Linehan made a good deal of play about this Supplementary Estimate and suggested that Supplementary Estimates were a cloak for inefficiency. I suggest that this Supplementary Estimate is proof of the efficiency with which the unified society administers insurance affairs. Perhaps the Deputy did not catch my opening statement in which I said:—

"This is accounted for in the main by the fact that the National Health Insurance Society has in the current financial year paid from its administration account about £38,000 more than was expected in respect of interest on and repayment of the loans which it obtained at the time the societies were unified"...

A grant of two-ninths had to be made under the Act by the Exchequer, and were it not for the fact that the society paid more than was expected for a building loan and a loan for compensation to retired officials, that particular part of the Supplementary Estimate would not be required.

Mr. Linehan

Does the Minister say that this is mainly accounted for by a quicker repayment of loans than was expected?

Mr. O Ceallaigh

Yes.

Mr. Linehan

"Expenses of administration" is not the best way to describe the quicker repayment of loans, as set out in the sub-head.

Mr. O Ceallaigh

The Committee of Management are responsible for that.

Mr. Norton

Do I understand from the Minister that the actuarial report is under consideration by the Department and that in connection with that the question of revising the basis of valuation is also being considered?

Dr. Ward

That is so.

Vote put and agreed to.