I apologise for the delay in circulating the script and the Supplementary Estimate. There was a technical problem in the Department of which I was unaware until just before I came into the House. The script will be available soon. It is not a matter over which I have direct control and its non-availability is not my fault.
The agreed practice has been to seek supplementary funding in these areas when the amount needed becomes apparent during the year. The items recognised by the Department of Finance as falling within this category are medical indemnity insurance, superannuation costs, PRSI costs and demand led schemes, which consist of the community drugs schemes and certain capitation payments such as the domiciliary care allowance. Expenditure on these items is influenced by a number of factors which are difficult to predict in advance.
Expenditure on the community drug schemes is a factor of the number and cost of claims under these schemes which, again, is difficult to predict in advance. There is a statutory right to relief for expenditure on prescribed drugs and medicines in excess of the expenditure thresholds which are laid down.
There is an additional requirement for £30 million in respect of these schemes. Some £9 million of this refers to a shortfall in expenditure in 1997 and £21 million is related to additional expenditure on these schemes in 1998.
The increase in expenditure under the community drugs scheme arises in the main from an increase in the number of persons claiming under these schemes and also an increase in the cost of medicines due to the prescribing of newer, more expensive drugs which has been a feature of prescribing trends in recent years. Developments in drug therapies throughout the developed world has increased pressure on the State to fund such therapies. Arising from these developments, many patients can now be treated in their homes rather than on an institutional basis, life expectancy for others has been increased and drugs have been developed which can give comfort and improve quality of life where no such improvement was previously thought possible.
Drugs for the treatment of peptic ulcer disease, for example, figure prominently in the list of drugs of significant cost both in the GMS and the community drugs schemes, as do drugs for the treatment of asthma and cardiovascular disease. Substitution of newer and, in almost all instances, more expensive forms of medication for older treatments is, therefore, a significant contributory factor in increasing expenditure on drugs and medicines.
I turn now to changes I am proposing in the community drugs schemes with effect from 1 March next. First, the existing drugs cost subsidisation and drugs refund schemes will be merged into one new drugs payments scheme with a threshold of £42 per month per family unit. Second, a common drugs-medicines list for all schemes will be introduced. This list will essentially be the current list of items reimbursable under the general medical services scheme. Third, in tandem with these changes, a common prescription form for all schemes will be introduced. The primary aim of the new drugs payment scheme is to bring about important improvements and equity in the existing schemes.
The new family scheme will have significant advantages over the existing drugs refund scheme. Under the drugs refund scheme, families pay the full cost of their prescription medicines and may, at the end of the quarter, claim reimbursement from their health board, of expenditure over £90 in that calendar quarter. Many families have heavy expenditure on drugs and medicines in a quarter and have to wait a further six weeks from the end of that quarter before they receive a refund. In effect, they may have to wait up to four and a half months and be incurring expenditure in the next quarter before they receive a refund. In 1997 more than 110,000 claims under the drugs refund scheme were in excess of £150 per quarter. Of these approximately 33,000 were for £300 or more per quarter or almost £80 per month. This can cause considerable cashflow problems for a significant number of families. This will not happen under the new drugs payment scheme. From 1 March next no individual or family will have to pay more than £42 per month for prescribed medicines. It means that, for the first time, families will be able to budget for the cost of medicines. Families will know that, whatever the size of their drugs bill, whatever unexpected illness might befall them, they will not have to pay more than £42 per month. There are families where, although one member may qualify for a drug cost subsidisation scheme card, combined expenditure on medicines by other members, which can be considerable, cannot be recouped until the end of the quarter. With the new drugs payment scheme, no family will have to pay more than £42 in any month for prescribed medicines. The new scheme will be of significant benefit to such families.
That the drugs payment scheme will operate on a monthly basis has distinct advantages over the drugs refund scheme. Under the refund scheme, a family could, for example, in one month have expenditure of, say, £80 but no expenditure in the other two months. They would have not have been entitled to a refund. Under the new scheme, they will have to pay only £42 in that month.
The new drugs payment scheme is for everyone. To qualify under the old drug cost subsidisation scheme, patients had to be certified by their doctor as suffering from a condition requiring ongoing expenditure on medicines in excess of £32 per month. There are no qualifying criteria for the new scheme. Where expenditure by a family exceeds £42 per month, the balance will be met by the State.
There has been no increase in the threshold for existing schemes since 1991. It must also be borne in mind that the new threshold refers to family expenditure as opposed to the existing threshold in the drug cost subsidisation scheme which relates to individual expenditure. The introduction of the common medicines list will ensure equity between the general medical services and the new drugs payment scheme in relation to the range of medicines paid for by the State under both schemes. It will not remove any essential prescribed medicines from the schemes. The comprehensive range of the most modern therapies required to treat all conditions, which is available on the GMS, will continue to be paid for under the new scheme. What is being removed is a range of over the counter preparations that do not need a prescription from a doctor and are available in many instances in supermarkets and other retail outlets. Examples of such products are some simple analgesics such as panadol, disprin, solpadeine, neurofen; vitamin supplements such as rubex, vivioptal, seven seas, royal jelly; and products for the treatment of baldness such as Regaine. A range of analgesics is available on the GMS and these will continue to be paid for under both schemes. It is seriously inequitable that the cost of these products is reimbursed to patients who may have significant means, whereas those with medical cards who constitute some of the least well off in society have to pay for them. The introduction of a common prescription form is necessary to close the accountability chain between the prescriber, the dispenser and the end user.
Increases in PRSI costs are related to the growth in the number of new entrants to the health services and the replacement of the old D rate with the new A rate. Modified social insurance status does not apply to workers recruited into the public service after 6 April 1995.
The additional superannuation costs for which funding is sought are due to the age profile of personnel in the health sector. Agencies are experiencing an increasing number of retirements, including those opting for early retirement, and a consequent increase in the yearly budget provision is required. A sum of £9 million in additional funding is required.
An additional £500,000 is being provided to cover costs arising from the tribunal of inquiry into the BTSB and certain other legal fees. The tribunal of inquiry costs are in respect of the legal costs of parties, associations and witnesses who were granted full or limited representation before the tribunal including, in some cases, the cost of judicial reviews.
To date the compensation tribunal has made 1,042 awards. The total amount of the awards made to date is £147 million. A claimant to whom an award is made is entitled to the legal costs and expenses associated with the claim. The average legal costs per claim amount to £22,000. A sum of £85 million was provided in the original Vote in 1998 in respect of payments from the special account established under section 10 of the Hepatitis C Compensation Act, 1997, and £15 million in respect of payments from the reparation fund. A further sum of £4 million is being made available this year for payments from the special account established under section 10.
Another important area which is being addressed in the Supplementary Estimate is child care. The Supplementary Estimate includes provision for a sum of £1.625 million to defray the 1998 costs of a number of pilot projects which have been set up under the young people at risk programme established by the Government in January. This initiative is being overseen by the Cabinet sub-committee on social inclusion. This funding is to be used for 12 family support projects, spread throughout the eight health board regions.
The objective of the projects is to prevent at risk children and young people from engaging in various forms of anti-social behaviour by providing a pro-active response to the children and their families. There are two key elements to this approach: the establishment of formal collaborative structures involving relevant State agencies, the voluntary sector and the local community; and the identification or establishment of a local centre which will act as a focal point for the delivery of services to young people and children. These pilot projects meet a need identified in Partnership 2000 in regard to tackling social exclusion. I have no doubt these projects will make a significant contribution and I am pleased there will be a formal evaluation of them. This will allow us, in time, to assess the effectiveness of the projects and to identify best practice in this area.
The process of tackling the so-called Millennium bug is proceeding apace in health agencies and it is essential that the necessary remedial work is completed on time. The overall project is turning out to be quite significant. A sum of £5 million was originally earmarked for this in 1988 from my Department's capital budget, based on the best estimates made late last year. This sum has proven insufficient and, although additional moneys have already been diverted to the year 2000 problem, at the expense of other developments in the technology area, there is still a need for this further expenditure of £1 million in 1998 to ensure the projects in health agencies proceed unhindered. My Department is assembling a final estimate of the costs of dealing with the Millennium bug and the total figure is expected to be significant.
The Government has also agreed to provide a package of funding to meet pressing needs in relation to new technologies to further improve the safety of the blood supply. The BTSB is introducing these new technologies to ensure it meets the best international standards.
One of the most pressing needs for people with physical and sensory disabilities is aids and appliances. These include essential items such as artificial limbs and wheelchairs. Waiting lists in this area can be a cause of great hardship for those affected. For this reason, substantial additional funding to alleviate this hardship. has been provided by the Government since it took office. At the end of last year grants totalling £4.325 million were given to voluntary agencies providing services in this sector for aids, appliances and equipment for people with physical and sensory disabilities. A further £1 million was made available to health boards this year for the same purpose.
In spite of this substantial investment, it has been brought to my attention that health boards still have substantial waiting lists for aids and appliances. I am determined to deal with this issue and I am making a further grant of £4 million available to health boards this year. This will help eliminate those waiting lists and provide some additional funding for much needed equipment such as wheelchair accessible transport to enable more people with disabilities to access services.
A sum of £22.924 million is being sought to cover the cost to the health service in 1998 of the settlements in June and September with craftworkers and non-nursing personnel, respectively. This sum includes retrospection. These settlements, which also relate to local authority craftworkers and general operatives, were concluded under the auspices of the Labour Relations Commission and represent a significant advance in flexibility and productivity which will translate into gains in efficiency and cost-effectiveness in health agencies.
The original estimate of the cost of implementing the recommendations of the review body on higher remuneration in the public sector was made when the review body's report No. 36 was published in December 1996. By the time the revised contract, based on the review body's recommendations, was introduced in 1998 a number of factors pointed to a review of this estimate. The number of hospital consultants had increased from 1,100 to 1,300. There was also a need for greater provision for locum cover and rest days. The new contract is significantly different in several respects from its predecessor and a more precise estimate of its ultimate cost can only be made on full implementation. This heading will cost an additional £10 million in 1998.
The original Estimate provided for the Department for 1998 included receipts of £239 million from health contributions. It is now estimated that health contributions will contribute £282.5 million to the Department, an increase of £43.5 million. It is normal practice that the Department of Finance calculates the original estimate of receipts due from this source when preparing its estimate of health needs. A combination of the increased numbers in employment and pay rises have led to this significant amount being available.
It is expected that receipts of £90 million will be received in 1998 under EU regulations on the social security of migrant workers. This is against a projected £63 million. The additional £27 million is being put towards the delivery of health services in 1998. Taking health contributions and receipts under EU regulations together, there is an additional income of £70.5 million in excess of that contained in my Department's original Estimate.
This Supplementary Estimate will add further to overall health expenditure and a budget day package to be announced tomorrow in regard to key areas of the services will add even further funding. These figures clearly illustrate that we have ensured more than adequate resources are being applied to the health programmes. The increases already announced for 1999 over 1998 for non-capital expenditure and the increase for 1999 over the expected outturn for 1998 represents a figure of 9.5 per cent. This figure will be further increases by the additional funding in tomorrow's budget. It gives the lie to critics who have claimed that our health services are being under-funded.
Since becoming Minister I have been conscious of the challenges which are faced in managing a system as complex and dynamic as the health services. Perhaps more than any other sector of the public services, health is influenced by constant technological innovation and new methods of service delivery. There are undoubted benefits attaching to such developments but they are almost always invariably very costly. The Supplementary Estimate before the House illustrates this point clearly.
This Supplementary Estimate will greatly assist health agencies in meeting the additional costs they are experiencing and in addressing the need for immediate investment in key service areas. The funding being sought shows the real commitment of the Government to adequately fund the health service and accordingly I recommend the Supplementary Estimate to the House for its approval.
