Again, I must apologise for the absence of the Minister for Health. He is ill and asked me to take this Bill on his behalf and introduce it in the House.
It was made clear when the original Health Contributions Bill was being debated in 1971 that the rates of contribution would have to be increased as time progressed. The rates provided for in the 1971 Act were 15p per week or £7 per year. As Senators are aware, the rates have in fact been increased at intervals since then. They were increased in 1974, in 1976 and in 1977 when the rates of contribution became 39p a week, or £18 a year. The Bill now before the House provides for an increase in these rates to 50p weekly and £24 annually, with effect from 1 April 1978.
The explanatory memorandum which has been circulated with the Bill defines the groups of persons who are liable to pay health contributions and outlines the services to which they and their dependants are entitled. Persons who hold medical cards are exempted from paying the contributions.
The present system for determining "limited eligibility" is a complex one which contains many anomalies. In the couse of the Second Reading debate in the Dáil some Deputies were critical, for example, of the position of non-manual vis-á-vis manual workers in so far as eligibility for services is concerned.
However, the Minister for Health has recently announced that it is the Government's intention to replace the present flat-rate social welfare and health contributions by a fully pay-related scheme. The Minister hopes to put forward proposals at an early date based on a report from an inter-departmental working group set up to work out the details of such a scheme. It is expected that the introduction of this new pay-related scheme should eliminate many of the present anomalies and should make it far easier for everybody to understand.
Health costs are rising rapidly. When health contributions were first introduced, public non-capital expenditure on our health services was £86 million, of which the Exchequer contributed £45 million. In 1978 it is estimated that non-capital expenditure on health services will be of the order of £365 million, of which all but about £20 million will be borne by the Exchequer.
Specific "limited eligibility" services are hospital in-patient and specialist out-patient services, maternity and infant care services and the drugs and medicines subsidy scheme. The estimated cost of these services for 1978 is £265 million. The total yield expected from health contributions in 1978, based on the increased rates provided for in the Bill, is of the order of £16½ million, or about 6 per cent of the overall cost of providing "limited eligibility" services. From the contributor's point of view, therefore, it is clear that he is getting extremely good value for money.
The extent of the increase in the cost of hospital and specialist services must be a matter of serious concern and it is a problem to which the Minister for Health will be devoting close attention. There are many factors which influence costs and, I think it appropriate that I should mention some of them. They include:
— the inflationary effects of pay and price increases;
— the extra demands for services arising from the increase in population and other causes;
— the need to improve the standard of institutional care for the aged, chronic sick and the handicapped and the provision of homes for the ambulant aged to replace substandard accommodation in county homes;
— the advances in medical technology involving more sophisticated techniques and equipment, more specialised staff and greater use of intensive care units;
— the increases in the numbers of accidents;
— the provision of improved care facilities for infants at risk;
— the need to provide on an increasing scale services for persons suffering from illnesses caused to some extent by excessive drinking and smoking;
— increases in the levels of hospital personnel so as to ensure that good standards of service will be available.
I trust that I have explained some of the reasons for the increased rates of health contributions proposed in the Bill and I commend it for approval.