I am happy to contribute to the debate on the Health Service Executive (Financial Matters) Bill 2013 which, as outlined to the House by the Minister, has been designed to disestablish the HSE Vote and take it back into the Department of Health as part of his planned reforms leading to the abolition of the HSE and the introduction of universal health insurance in his overall grand design for the health service. There have been questions raised that the legislation may reduce the democratic accountability of the HSE in financial planning because under the current system, it is the subject of a separate Vote which means that its expenditure has to be provided for separately in the Estimates and which will now be subsumed into the Department of Health. I can see that this change has the potential to create obscurity about what happens within the HSE and the finances of the health service in general. That needs to be identified by the Minister as something that will not occur. He needs to outline how we will see financial accountability to the Houses and how the Estimates process will work in the future because that is a real concern.
There is another concern. The Minister outlined on Second Stage that much work needed to be done within the Department of Health to ensure it could strengthen its financial control and planning capacity. The questions arising are whether this will be done and when will it take place. There is a real risk that we will pass this legislation and disestablish the Vote and the Department will not be capable of providing for the financial oversight that the Minister stated needs to happen. He needs to clarify whether that financial planning process is in place and what steps are being taken to ensure it is in place because the hallmark of the HSE has been that its financial management has been abysmal. One of the big criticisms of it is that it has not been able to plan and stay within budget, although there is another reason for this.
The HSE commissioned a report on its financial planning and financial services from PA Consulting which was critical of how finances were operated within it. Probably, it dates back to its establishment when its administration was maintained along old health board lines. One of the big criticisms made in the report was that financial planning and control of expenditure was engaged in across the board in the HSE, with local offices being instructed to achieve a reduction of, say, 5% or 10% across the board, rather than targeting areas where there might be wastage and over-expenditure. I do not know how the Bill will change this. Mr. Tony O'Brien of the HSE stated the executive was attempting to put in place structures to allow that planning to happen, but it has not yet happened. In a couple of years time will we still be wondering when we will get to the stage where there is proper financial control and financial planning?
The Bill provides for the carryover of deficits from one year to the next and that the first call in the budget for one year will be to meet the deficit in the previous year. In one sense, this is prudent, but in terms of the cuts from which the health service has suffered in the past few years, it will create significant difficulties and we will continue to see emergency Supplementary Estimates to bridge the gap.
That leads me to have a little sympathy for the Minister in the sense that one cannot take any more out of the health service. I do not believe the Government can continue to reduce the budget for it year on year and continue to roll out the mantra of more for less. What we will see this year is less for less. We cannot continue on this road. We have to accept that if we want to have a functioning health service and a health service that will provide for an ageing population who will need more expensive treatment to help people to recover, we have to invest in it. We cannot continue along the road of constantly cutting expenditure. From that point of view, I have a little sympathy for the Minister, but in other ways I have no sympathy for him because he is the one who laid out this plan and stated there were inefficiencies and that so much more could be done for less. We just cannot do this. We need to have that debate.
It was interesting to read the reports in the media over the weekend on the letter from the Minister for Public Expenditure and Reform to the Minister for Health complaining about the projected cost of universal health insurance which could end up costing the Exchequer an extra €5 billion. We should probably be looking at spending an extra €5 billion to ensure we have a health service that can treat patients in a timely fashion and in which patients can access the services and treatment that they need and to eliminate waiting lists in a timely fashion. If it costs an extra €5 billion, we should provide for such expenditure and be looking at increasing taxation to provide for it. We must have a debate that is about more than cutting costs and ensuring the HSE sticks within its assigned budget. We must have a debate on the type of health service we want and the treatment we want to provide for citizens.
It was interesting to read the Minister for Health's opinion piece in one of the newspapers after the weekend on his plans for universal health insurance.
I sat down to read it wondering just how often the Dutch model would be mentioned. Lo and behold, there it was in the middle, saying that the Dutch model is the one the Minister wants to pursue. I wonder, however, why the Minister continues to trumpet the Dutch model as being a panacea for the health services in Ireland.
I have friends living in Holland who are familiar with the Dutch model, and they do not believe it works. The individual cost of health cover in the Netherlands has almost doubled since the model was introduced. Although the Netherlands, with a population of almost 20 million, is four or five times the size of the Irish market, the number of insurance companies operating there has decreased. There is therefore less competition in health insurance in the Dutch market. Is that the road we want to take? I can foresee a situation, if universal health insurance is introduced here, in which we will go from having three health insurance companies to having only two - that is, the VHI and one other company. People will not have a choice and we will see premiums increasing. In addition, we will not get the effect we want from universal health insurance.
Will we be capable of putting in place a system whereby oversight bodies for the health insurance market will be able to determine what level of treatment people can get? I do not think so. We will hand over control of the health market to insurance companies and will thus lose political accountability and control. In addition, citizens will lose the right to access treatment in a timely fashion.
We need to debate the whole concept of universal health insurance in the context of what type of health services we want to provide for our people in future. That is the discussion we should be having. Each one of these Bills is incrementally bringing us down the road to universal health insurance without having such a debate. When we wake up and have a discussion about it, it will be too late because all the various pieces will have been put in place. It will then only be a matter of introducing universal health insurance into the system.
It took more than 20 years of development to implement the Dutch model, yet the Minister wants to do so in five or six years, or in the next term of office if the current parties are lucky enough to get back into government. There are serious implications from this, so we should be having a serious discussion about the type of health service we want. We should examine the possibility of providing more funding for health services based on increases in taxation, because that is the only way we can do it.
It is difficult for people to access private health insurance due to significant cost increases, but it is also interesting to note the numbers cancelling their private health cover. One aspect that is never discussed here, however, is that costs are increasing because the State is reducing its subsidies to private health insurance. The State has provided tax breaks for those who buy health insurance, while hospitals have not been charging the economic cost of private beds. Private companies are now complaining when they are charged the economic cost. When we go to universal health insurance the economic cost for everything will be charged by the hospitals to the insurers, which will put costs through the roof. We must stop subsidising private health services.