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Seanad Éireann díospóireacht -
Wednesday, 5 Nov 2008

Vol. 191 No. 17

Medical Cards: Statements.

I am pleased to be in the House to discuss this issue. I am sure most Members of the House have been awake all night watching the unfolding events in the world's oldest democracy, which are very exciting not only for the United States of America but for the entire democratic world and possibly beyond.

It is a pleasure to be in the House again to discuss the issue of medical cards. In recent years the number of people with medical cards has grown substantially — the growth rate has been one of the highest since the introduction of the medical card scheme. In October 2004 there were 1,150,000 people with medical cards and in October 2008 that number had increased to 1.338 million, more than 200,000 additional people now have access to their doctor and to medication free of charge under the general medical scheme.

Next year, notwithstanding the economic pressures we face, the general medical scheme will increase by approximately 14%. The scheme is increasing rapidly for two reasons, including new innovations on the market and new drugs being made available to Irish patients. I saw a programme on BBC last night about this matter. In Britain many medications are not made available to citizens and an issue has arisen there about whether the UK National Health Service will provide services to those patients who can afford to buy medication. The relevant UK Secretary of State made some changes in that regard. The position in Ireland is different. New innovations and new medication are made available to citizens through the general medical services scheme, refunded through the drug payment scheme for those who do not qualify for a medical card, and are available in hospitals when patients are being treated.

The general medical services scheme is increasing as a percentage of the public health budget by more than 1% per year. When I became Minister for Health and Children the general medical services scheme cost approximately 11% of the total public health budget. In 2008 it will be 18% of the total health budget. Therefore, it is an increasing proportion of the budget. In the context of the 2009 budget and Estimates, which were taken together this year because of emerging economic difficulties, the Department of Health and Children was required for budgetary reasons to make savings in the order of €700 million over and above what was planned for 2009.

On a point of order, is it possible to get a copy of the Minister's speech?

I do not have a script. Notwithstanding these savings, health spending next year will increase by 4.1%. To put that in context, in 1987-88 health spending was reduced by 3.5% when the country faced similar significant economic challenges. There will be an increase next year of approximately 4.1% year on year. Notwithstanding that increase, a cut of €700 million had to be identified in planned services for next year. There is no low-lying fruit in the health area and no easy pickings. There are many areas that had to be thoroughly addressed and one such area was the cost of the medical card scheme.

When the medical card scheme for the over 70s was introduced in 2001 it was estimated that it would cost €15 million per year, and in 2008 it will cost €245 million. Many people in their 60s earn incomes of approximately €300 per week. We have changed eligibility requirements to take account of disposable income for all medical card schemes. Generally, people in their 60s do not have to pay rent or mortgages. They have paid their mortgages, their children have been catered for and they do not have travel costs associated with work. Generally, their gross income and their disposable income are similar. For example, a couple aged 68 years on an income of €300 or above per week do not qualify for a full medical card. However, with the over 70s scheme, someone on reaching the age of 70 years automatically qualified regardless of circumstances. Many people criticised that scheme. Last December, the Fine Gael spokesperson on health said that a means test should be introduced for that scheme. Many people have examined this scheme and taken the view that, given all the circumstances and the pressures of medical expenses, a free scheme for any group of people regardless of income cannot be justified.

The cost of the over 70s medical card scheme is rising by approximately 7% per year because of the numbers involved, whereas the cost of medical cards in the general medical services scheme is rising by approximately 2% to 3% per year. The Government made a decision in the budget to end the automatic entitlement. Among the complications with the over 70s scheme were that a capitation fee of €640 per patient was agreed with the Irish Medical Organisation in 2001. That scheme was introduced by legislation as was the contract under which doctors operated the scheme. The only way to change the capitation fee, other than by agreement, is to change the legislation and the automatic entitlement. It was grossly unfair to have a capitation fee of €640 for doctors to treat people who are generally better off and a capitation fee of €161 for doctors to treat people who get a medical card based on means in the most disadvantaged areas. The €640 fee was virtually four times the fee for a doctor who treated a patient over 70 who was in receipt of a card based on means.

Of the 350,000 people aged 70 or more in Ireland, 215,000 receive the medical card based on means and 140,000 receive the card as a result of reaching the age of 70. There was a huge anomaly in the manner in which doctors were treated. After some reflection, the Government felt it was not in a position to negotiate under Irish and European competition law with the IMO or the IPU. As a result of consultation, we established a group, chaired by Mr. Eddie Sullivan, a former Secretary General of the Department of Finance who retired about 18 months ago. The group made a recommendation to the Cabinet and we agreed to pay a single capitation fee of €290 in respect of all patients over 70. That is right, given the circumstances. It ends the perverse disincentive for doctors working in areas of high disadvantage. From anecdotal evidence provided by doctors who approached me before and after the decision was made, it has been well received in those disadvantaged areas.

The Government estimates that €100 million will be saved as a result of this decision, which must be achieved during 2009. The new standardised capitation fee will bring in €16 million and a further €20 million will come from the 20,000 people who will not qualify under the new income criteria, which is €700 per week for a single person and €1,400 per week for a married couple. The CSO has provided new statistics from the EU-SILC, which is a household survey. We estimate that there are no more than 5% of people over 70 who have incomes in that bracket as the average earnings of people over 70 in Ireland is €260 per week. Therefore, the threshold is almost three times the average earnings of a single person in that population group.

The issue that arises is how best to use scarce resources. In Ireland, access to doctors is available free of charge to one third of the population. That population also receives medication free of charge and does not have to pay the in-hospital charge, which is being increased from €66 per day, capped at ten days per year to €75 per day. All other citizens pay for access to doctors and pay for their medication to a limit of €100 per family per month. That comes to €1,200 per year per family, which includes families of four, five or whatever. I do not believe that such an outgoing is unreasonable in the circumstances in which we find ourselves.

When this scheme was introduced, capitation fees to doctors cost about €203 million per year. In 2007, that had grown to €431 million. The cost of drugs was €434 million for the GMS, but that had risen to over €1 billion in 2007. Next year, the cost of both fees will rise by about 14%. We have increasing levels of unemployment and we must provide medical cards for those at the bottom of our society. One would love to do more as far as medical cards are concerned. I mentioned earlier that a couple in their late 60s earning over €300 per week do not have access to a medical card. Many people would say that is a low level of income, which it is, and one would love to do more. Since I became Minister for Health and Children, we moved to disposable income and increased the income threshold by 29%. That particularly helps young couples with children, those in employment and those with child care costs, rental or mortgage payments, travel costs and so on. We also introduced the doctor-only medical card, which has a 50% increased income threshold on top of the threshold for a full medical card. Approximately 80,000 people have that card, but the number is increasing reasonably rapidly with the rising level of unemployment.

Given all the circumstances, the decision made was fair. I have many quotations on this issue, including a quotation last December by the Fine Gael spokesman on health who said that a means test should be introduced. Notwithstanding that, people seem to change their position in the light of changing circumstances, even if it is just a few months later. I genuinely believe that regardless of who is Minister for Health and Children, the automatic entitlement to benefits such as medical cards regardless of income cannot be justified. Somebody like me should not be entitled to a medical card when somebody much less well-off just under the age of 70 cannot qualify. A society that does that is not a fair society and does not target resources to those who need them most.

There is no evidence to suggest that the introduction of the medical card has had a beneficial effect on access to hospitals for people in that age group. The average attendance at doctors' surgeries by people in that age group is four to five times per year. The reality is that many people who are better off tend to look after their health better. If we are to target resources to those who need the health service most, it must be at chronic illness management, which affects people in their 50s and 60s as well as those over 70. These are challenges which confront the Government and must be addressed in any contract of employment in the general medical service. Moving services from an acute hospital environment to a primary care environment means treating chronic illness in the community as part of primary care. The health transformation programme is a priority for the new reform which Professor Drumm and his team at the HSE are overseeing.

I thank the Minister for coming to the House and for the willingness she shows to debate the topics of the day. It is appreciated.

The Government made a political choice to deprive the over 70s of a medical card. There were many options on the table, but for some reason that was the decision the Minister made. We have seen the response of the people, who certainly do not agree with it. Given the statistics provided by the Minister today, she has effectively told us that she has made these changes to the medical card for a saving of €20 million. I think I am right in saying that the other changes could have been brought about anyway. For example, the change in capitation for GPs was negotiated by the former Minister for Health and Children, Deputy Micheál Martin, who has stayed very quiet on all this. What stopped the Government from changing that deal in the past few years and saving the amounts to which she referred this morning? I could ask a similar question about drug charges.

I appreciate that the proportion of the population that is elderly is increasing and that the Minister is looking at projected ongoing costs. I find it strange that since the Government has made four or five changes on entitlement, the savings figure still remains the same at €100 million. It seems that those savings are being made in areas where change could have been brought about anyway.

It is regrettable that the Minister had to come to the House today to debate this issue because the Government insisted that the priority was to protect the vulnerable and the elderly. Providing a right just before the general election in 2001 and withdrawing it as soon as times get tough does not sit well with me or with the Fine Gael Party. I think the Minister has seen that it does not sit well with the public. We have seen mass meetings in churches, radio station phone lines have been jammed with concerned callers and 15,000 people protested outside the gates of Leinster House. We have seen an extraordinary reaction from the public to the decision that was made. There have been apologies from the Government and I am sure the Minister will admit that the decision caused incredible confusion, upset and distress. It really was a new low for this older group. The Government obviously made a number of changes since then.

I want to raise a number of questions regarding the shift away from universality because I do not think the Minister had any political mandate to move from universality on this benefit. In the general debate, there has been a striking lack of discussion on the philosophy behind universality and the benefits it brings not just to those who access health services but to society as a whole. Does the Minister agree that the means testing system can prove both inefficient and burdensome? What will the cost be of means testing the 20,000 or so compared to the entire group? One of the Minister's goals is to reduce bureaucracy in the HSE. She wants to reduce administration and move to frontline services. How many people will have to be employed on the administrative side to police this system? Who will administer it and how many extra officials will be dealing with it? What is the timeframe for sending out these forms?

I want to discuss preventative medical care. The Minister commented on elderly people attending a GP four or five times a year, but that refers to healthy people over 70. In the course of this debate there has been strong evidence based on research in this area, which is a cornerstone of the Minister's work, that if one improves community care services, thus keeping people in their own homes, it lessens the burden on hospitals and nursing homes. We have all seen this happening in our families. The medical card represented a door to those services for many people. It made the difference between allowing people to remain at home instead of availing of expensive accident and emergency or other hospital services. That research became evident during the course of this debate.

What will the cost be of the extra numbers of people who end up using accident and emergency units because they did not call to their GP for an antibiotic for a bad cough which developed into pneumonia? We know that money is tight for many older people so what will the cost be of such accident and emergency attendances or inpatient admissions?

The Minister said she will bring out a simplified medical card means testing form for the over 70s. Will she give the House more details on this? What will appear on this form and what will be omitted? How will these forms differ from those for the under 70s? The Minister said there will be a simplified form, but can it be simplified for everyone? At this stage, it is not clear what she is planning in this regard.

The Minister says she will introduce legislation, but the measures are not in the Social Welfare Bill. Will she clarify when that legislation will be introduced and what it will contain? I assume that the three-year automatic entitlement will end. Will that be in the legislation?

Will the Minister clarify where the savings will be made? At the beginning, she said the scheme covers approximately 140,000 over 70s who are medical card holders. It was estimated at the beginning that 15,000 people would change their cards, 85,000 would lose the full entitlement but would have a doctor-only medical card, 25,000 would lose all entitlements but would be in receipt of a €400 grant and 15,000 would lose all entitlements. That would enable the Government to save €85 million by recouping the cost from GPs, but will the Minister explain how she will end up with €100 million even though the dynamics of the scheme have changed as a result of the pressure that has been brought to bear on it? Why could the savings from GPs not have been achieved to begin with, rather than targeting older people?

A number of people have attacked Deputy James Reilly for his role in negotiating the contract for the over 70s, but I consider this to be a complete red herring. The reality is that the then Minister for Health and Children, Deputy Martin, negotiated the deal with the doctors. The Government signed up to it without ensuring that the public and the Exchequer got the best possible deal. It should be acknowledged that this was the Government's error, not Dr. Reilly's.

On many occasions, the Minister has said that people such as herself and retired judges should not receive a medical card when they reach 70, but that ignores the debate on the benefits of universality. She says she thinks the majority of people agree with her, but questions have been asked as to whether people with substantial means apply for medical cards anyway. There is a question mark over that point. Does the Minister have statistics on that issue and do we know the costs involved? It would be interesting to know the answers.

Age Action Ireland and the Senior Citizens Parliament do not agree with the changes the Minister made. In discussing that 5% we need to debate the impact of universality. The Minister may have seen an article in The Irish Times entitled “Should there be universal access to State benefits?” One of the points made in that article about universality was that the debate is not merely about hard statistics, cost take-up and outcomes. Given the amount of waste there has been following a range of Government decisions, one must ask again whether this money could have been saved elsewhere. The article went on to state that it is about investing in social capital. It made the point that the economies of countries, particularly the Nordic ones, that have invested in social capital are extremely good. Universality gives middle and higher income groups a sense of tangible benefit from the taxes they pay.

International research shows that means tests reinforce a sense of exclusion, stigmatisation and intrusiveness. Although it may not be an issue regarding the medical card scheme, very often when means testing is introduced the people who should be getting this service do not get it because they are excluded. There is a sense that services for poor people become poor services. The response on the street was a call for universality for the over 70s.

People had seen a vision of universality when medical cards for the over 70s were introduced in 2001. They liked what they saw and felt it worked for their health. It gave a better quality of life to people over 70 so one must ask why this political choice was made. As for Fine Gael's position on universality, we went to the electorate in the 2002 election with a universal health policy. At the last election, in 2007, we went with the beginnings of a universal health policy for the under 16s and under fives. We also talked about moving towards that universal position over time, but beginning with those under 16 and under five. We made detailed provisions for those age groups.

I thank the Minister for attending the House and I look forward to hearing her replies to the questions I have raised.

I am delighted to welcome the Minister to the House. I do not find Senator Fitzgerald's ideological argument convincing. Her heart is not in it.

Anybody with common sense would know that one pays according to one's means. I accept that in the new revised scheme, 95% of people over 70 will have a medical card. I do not believe that people who are well-off and can afford to pay for medical services should get a free medical card.

Is the Senator getting rid of it?

I do not believe that, in her heart and soul, Senator Fitzgerald thinks people who have the money should not pay.

Is the Senator getting rid of universal access?

Senator White, without interruption.

I am talking about universality.

They have it in national schools.

Senator White, without interruption.

Is it Government policy to get rid of it now?

I support the revision. As spokesperson on older people, I was pleased to see that older people in Ireland were able to exert their influence to get it changed and rather than the 62% who would have been given a medical card it is now 95%. We were talking this morning about the United States and the people of that country engaging in the political process. In my view, real-life politics was the meeting I attended in Westland Row church with 1,600 older people filling the church, not one seat left vacant and 15,000 people out in the street. The older people in Ireland have got their voice. We talk a lot about the grey vote but to me it was grey rage, shown by the passion which the people expressed to have this measure changed.

Many of the people in Westland Row church were women. The Minister may remember that up until 1973 when we joined the EU, when women married, they were forced to give up their jobs in the public and private sectors. The women who spoke at the meeting told of how they had to give up their jobs on marriage, how they had no choice and could not work. In my mother's time it was culturally unacceptable for a woman to work, even if she had a skill which would get a job. Many of the women who participated in the meeting in Westland Row church were that group of women who had to give up their jobs. They stayed at home and minded their children and now the one thing they were given for free, the medical card, was being taken away from them. They were incensed and passionate. The grey vote and grey rage was successful in this case. As a business person I congratulate the Minister. If people see something is not working and do not have the guts to change it, then they are no good for anything, so I am delighted.

My purpose this morning is to talk about the fair deal scheme. I spoke in Drogheda to the local active citizens group. I went there specially to speak about the fair deal scheme and to explain it to them. This is a superb scheme. I supported the Minister when she came to present it to the Fianna Fáil parliamentary party meeting a year and a half ago and I wholeheartedly accepted the benefits of this scheme. It will provide a level playing field whereby access to nursing home care will be affordable, accessible and anxiety free.

I refer to my policy document of June 2006, A New Approach to Ageing and Ageism, with which I am sure the Minister is familiar. I listed 30 recommendations and recommendation No. 18 states:

The Government should encourage the provision of innovative financial arrangements ... that would enable older people to raise funds from their home to cover the cost of care while still retaining full possession of their home.

This is the beauty of the scheme, in my view, that people will be able to retain their homes. Many people find this fair deal scheme difficult to understand because there is a bit of mathematics involved but if they sit down with a pen and pencil and work out the 80% of their income and the 5% of the value of their house, they will have no bother in understanding it.

Nursing home care is very unequal throughout the country as a whole and citizens are not treated equally in the current situation. This is very unfair and I am an advocate for the new scheme. I ask the Minister in her response to say how sufficient public beds will be provided. Currently there are more private beds than public beds. I ask her to say what arrangements will be in place to provide more public beds if a person wishes to go into a public nursing home.

Currently the charges for nursing home care throughout the country range from €800 to €1,500 per week. This in itself is a sign that something is wrong if one Irish person has to pay more than another person. At last night's meeting of the Fianna Fáil parliamentary party, I made the point that this scheme is not just for older people; it is for any person who needs long-term residential nursing care. It is not just for the over 65s. The scheme is also available to somebody of 40 years of age who has been assessed as needing residential care as a result of Alzheimer's or whatever. Every Irish person is entitled to be assessed whether he or she needs long-term residential care. This is the democratic nature of the scheme.

Some speakers at last night's Fianna Fáil parliamentary party meeting questioned whether there would be asset stripping if a person's house was worth €2.5 million. I have no time for that whatsoever. Last Monday in Drogheda, one man said they all would sell their houses to their children in advance of needing to go into a nursing home. It would be much better where a person has to go into a nursing home and is then able to return to his or her home, that this home has not been designated in advance as being owned by his or her children. There is nothing so precious as having one's own home and one's own nest in which one can be happy and relaxed.

I am convinced about this scheme and I acknowledge there will be issues to be resolved during the passage of the Bill through the Houses. Returning to my point about older people showing their power, I was not upset or annoyed but rather I was impressed that the over 70s had the passion to come out and object and say they wanted to hold on to their medical cards.

I recommend to the Minister a book by Julia Neuberger which is a manifesto for old age, entitled Not Dead Yet.

We need to have a good debate in the House on a vision and a strategy for old age. I am meeting Julia Neuberger on 24 November in the House of Lords. She is bringing in to meet me a number of people in the UK who are interested in the whole vision for older people. I congratulate the Minister on making the changes when she saw the democratic response and I congratulate her on the fair deal scheme in which I have total belief. I spent three full days studying the scheme and I sent out a newsletter to all county councillors throughout the country to explain the details because it is a bit complicated. I say well done to the Minister.

Before I call Senator Joe O'Toole, I welcome a former Member of the House who is in the Distinguished Visitors Gallery, former Senator and Deputy, Mr. Martin J. O'Toole, and his wife.

He is a man I might acknowledge is related to me and, I might acknowledge to the Fine Gael people, although he might be slow to admit it, a man whose people came from a house in south Connemara that is a very strong Fine Gael house before he moved up to the next county. I welcome him and it is great to see him looking so well.

With the permission of the House I wish to share my time with Senator Norris. I welcome the Minister to the House and I echo the words said previously about her record of availability to Members of this House to deal with issues. It is well known in this House that I admire much of what she is doing in health and I have regularly been prepared to defend issues and points made in this House by the Minister. Both my colleague, Senator Norris, and I have taken great issue with personal attacks on the Minister.

I was delighted to see the Government make the change. I do not have any problems with change of mind or U-turns because Governments are there to deal with issues and to find solutions. However, I disagree with the partial impact of the change. All the anecdotal evidence has been to the effect that the health of the over 70s has improved significantly since the introduction of universal entitlement to the medical card for that group of people. If for no other, this is a good reason to have introduced it and to maintain it. I ask the Minister to consider it on that basis.

The movement from gross to net income was unfortunate. I took serious issue with the line on the Department of Finance website on the morning the decision was made which stated it was being moved to gross income more or less because people understand their gross income more easily than their net income. This line, which is still on the website, is facile, flippant and irritating. I will explain why.

To give a real life example, I recently spoke to a man earning €40,000 a year who would be outside the qualification level. He is in his late 60s and, unfortunately, his wife has advanced Alzheimer's and eventually had to be brought to a nursing home. The cost of that nursing home is just under €4,000 a month — I cannot remember the exact figure but it is close to €47,000 or €48,000 a year. In his situation, the nursing home cost is more than his total income. To give the full story, he has two children who, despite being in comfortable but not superb jobs, are sharing the cost with him, as many people would do. It is a responsibility we all face at some stage.

It seems grossly unfair that this man would not qualify for a medical card. In his case, an issue of net income comes into play. I know there is a system of appeal but that does not appear to be set to deal with this particular issue. The net issue is the only issue that counts. The man also told me of previous physiotherapy costs and a number of other costs before his wife went into the nursing home. While I do not purport to know all the details, this is an example of why we should be reconsidering this area.

I have known the Minister long enough to know she would not deliberately misinform me or anybody else. However, I do not accept only 20,000 people are outside the limit. I have tried to put together figures in this regard and I have been able to judge the number of teachers who would not qualify. Between primary, post-primary and third level, I estimate that approximately 15,000 or about half of retired teachers would not qualify, although I stand to be corrected on this if the Minister can correct me. If I add to that the number of retired gardaí, nurses, civil servants and public servants who would be outside the limits, before even considering those in the private sector such as retired bank officials with occupational pensions, I cannot accept there are only 20,000 people. While I cannot disprove this at present, I intend to do so. I just do not believe it possibly could be correct that only 20,000 people over 70 are outside the limit. While I recognise that some of my figures apply to people in their 60s rather than their 70s, I do not believe the global figure.

Those are the nuts and bolts issues. The fundamental difference I have on this issue is that I disagree with the Minister's point on medical cards. I am not in favour of giving medical cards to millionaires. I am in favour of universal access which should be paid for through proper taxation and other means. Rather than setting up a system of trying to measure who gets under the bar and all that goes with this system, the most honest way in a republic and a democracy is that everybody over 70 would have universal access. While I do not see them doing it, if Michael O'Leary and the lads want to queue up and apply for a medical card, they will get the same as everybody else. They pay their taxes and that is their entitlement. To be fair to that man, he pays his taxes in this country.

I have effectively made four points: first, on the improvement in general health, second, on the net figure as opposed to the gross figure, third, on the numbers, which I disagree with, and fourth, that we live in a democracy where there should be universal access paid for by tax rather than by getting under the bar at the age of 70 or over.

I am grateful to my colleague, Senator Joe O'Toole, for giving me this time to speak. I welcome the Minister. She is a woman of exemplary courage but I just happen not to agree with her on a number of issues.

Like Senator O'Toole, I applaud universal access. There is a clear case that it saves money and one can test this against the improvement in health of elderly people. I am not convinced there is a queue of millionaires waiting to sit in doctors' waiting rooms and accident and emergency units.

There may be a few, however. I received a curious letter from a woman constituent to tell me she had been at dinner in one of the great clubs around St. Stephen's Green with some very sophisticated, nice people. They had their cellars of wine and all the rest, were delighted they had their medical cards and were very upset at them being taken away. Within a couple of days, the woman was out in one of the yacht clubs in Dún Laoghaire with a similar group of people. This is anecdotal evidence, however, and does not disprove the fact that although there may be mean-minded millionaires, the impact on the system is comparatively small.

I agree with universality. However, where I differ from my other left wing colleagues is that I believe one has to put in place the tax regime that would support universality before one has it. I do not believe the Minister, who has campaigned for lower taxes throughout her political career, would agree. I would opt for the Scandinavian model. If we want this kind of universal health care, which I do, we cannot introduce it before introducing the tax regime that will support it. I am very much in favour of doing that.

I am also in favour of means tests and have no difficulty whatever with them. However, if there is a means test going up, there has to be a parachute means test coming down so the most vulnerable are protected. That did not happen with the medical cards scheme as envisaged by the Government. I, too, was contacted by that gentleman whose wife had Alzheimer's. Clearly, he was saving the Exchequer money, yet he was being penalised for doing so. If he had washed his hands of his wife and stuck her in a home, we would be paying a lot more. Those kind of people need to be protected.

Politically, this was the most cack-handed thing I saw in my life. I was in that church on Westland Row. I thought the Minister of State, Deputy John Moloney, had great courage. They did not know him from a hole in the ground when he stood up but the minute Fianna Fáil was mentioned, a wave of palpable anger went through that church and he went pale.

People were not prepared for these cuts. While I do not agree with the medical card cuts, it is politically dangerous when a budget is beginning to unravel. The people should have been prepared properly by the highest political leaders in the land who should have outlined the specific clear financial dangers in which we are placed, reinforced this message realistically to the people and then made judicious cuts. One does not start with the elderly, the disabled and people in education. That is a political disaster.

The view of those who would like to support the Government in tackling this very difficult situation is reinforced when we see the dismantling of the Combat Poverty Agency, the Human Rights Commission, the Equality Authority and the Data Protection Commissioner, despite the very small savings, if any, which will result. This was clearly intended to cripple and muzzle the voice of the vulnerable and must also be reconsidered.

There is a difficult situation in which the budget is unravelling. I would support the Government if it was courageous, and I would do so to my own disadvantage. Although it is not popular with my constituency, I have said over the years that there is a clear argument which must be answered for considering the question of fees in third level education, for example. When resources are limited, they must be targeted at the most vulnerable. What the Government has done by doubling the capitation fee is to strike again at the most vulnerable. While I am all in favour of universality, the tax regime for this is not in place.

I will raise another issue while I have the Minister more or less captive. While some agencies such as the Equality Authority were targeted, the Competition Authority was left completely untouched. Although the Minister and I get on pretty well personally, this is one area where she and I have an ideological difference. I do not believe competition is universally to be held up as a positive ideal. I do not admire the work of the Competition Authority. Recently, the authority failed in its duty because it neglected a deadline by which it could have dealt properly with a major multinational and, as a result, it let it off the hook. It then went after those in Irish Equity, the vulnerable, who earn less than €7,500 from doing broadcast voice-overs. The authority claimed they could not collectively bargain through a trade union because they were a cartel. Cartels are big business; they are not poor, vulnerable people making the odd few bob out of doing a few voice-overs. That is why I am concerned that while the Combat Poverty Agency and the Equality Authority are attacked, the Competition Authority is left alone. I do not believe it has proved its value.

There are other areas where savings could be made and an audit should be conducted to identify them. I am concerned about an undue increase in the prescription of antibiotics for certain age groups over particular times in the year. This morning on the wireless this was reflected on by an entertaining Irish doctor from Canada. He said when he went to examine these patients, they would say they did not need an examining doctor but a prescribing doctor. Many antibiotics are being used for viral infections, respiratory illnesses and flus when they actually have no effect on them. It also has the effect of lessening their effectiveness which in turn strengthens other infections such as MRSA. Prescribing these medicines is a waste of money so it should be cut out rather than going after the elderly.

The removal of medical cards from the elderly was misplaced and badly handled politically. I met lovely and wonderful elderly people at the recent demonstration outside the Houses. That was grey power and since I am getting grey myself, I am pleased about it. Many of them said flattering things to me. When I asked them how many voted for Joe Higgins, when they most needed him, and how many voted for Fianna Fáil, there were few takers and a few guilty looks. We are all going to have to take some pain from the budget. If every interest group is able to unpick it and it starts to unravel, then the country will be in real trouble.

When the old age pension was first introduced in 1908 by David Lloyd George, it was seen as a progressive measure. It was, undoubtedly, the first political statement on these islands — Ireland was part of that jurisdiction then — of governmental intent on looking after the needs of older people in society. It can be argued that it was cynically introduced as the eligibility age for the pension was actually higher than average life expectancy at the time. The political argument was that a gesture had been made to look after the needs of older people in society but at little cost to the public purse.

Will the Green Party get rid of the old age pension too?

No. Since 1908, people have been living longer and healthier lives, fortunately, but their health needs and the cost of meeting them are also increasing. The Government is committed to introducing the best possible public health care service for the maximum number of people in society. Where that cannot be met from public resources — it must be remembered we are dedicating €16 billion of very scarce public resources a year to the health services — there is a contribution principle for those who can afford to pay. More than half of adults have chosen to do this by subscribing to private health insurance. Other people have other means at their disposal.

The introduction of universal medical cards for the over 70s was badly handled. It was ill-thought out and quickly put in place with no real assessment of its likely costs. As a result the scheme's costs became far higher than ever anticipated, however much political argument can be made that it was good for those who benefitted from it.

It has been forgotten that a small but significant group in this age group have resources. The State has been subsidising many of them twice, once in the form of a free medical card and then in the form of tax relief on their medical insurance should they choose to remain in the private health insurance system. This whole area, therefore, needs to be examined.

Undoubtedly, this process could have been handled better. The ultimate result, however, has been the setting of limits that reflect the incomes of the majority of people in this age group and the meeting of their health care needs through a cost to the public purse. I find it shocking that the average income for people in this age group is €260 a week. That is a wider issue and reflects badly on the society in which we live and how wealth is distributed. People from this age group are among the poorest people in our society, albeit still a wealthy society. We need to come up with a political response that addresses their needs in the best possible way.

I do not believe universality is the best way of doing that. If someone in this age group can meet health care through their personal resources, the State should stand aside. We know this is not the case for the majority in this group. The Government has now set benchmarks to meet their needs. The responsibility will be for whoever is in government in the future to assess those benchmarks, keep them apace with the prevailing cost of living and ensure this age group's needs are being met.

The programme for Government seeks to increase medical card entitlement across the population — for example, extending eligibility for children under five years and for those with an intellectual disability under 18 years — but not in the form of universality. It is a source of disappointment that this has not been achieved as it is resource linked, but it remains the Government's intention. It also means the existing criteria for medical cardholders need to be examined.

It is also unacceptable that resources have not allowed us to examine general eligibility levels for medical cards for the wider population. Up to €16 billion is spent annually on the health service. Either we make the difficult choices that need to be made to allow those resources to be better used or we limit the eligibility to an entitlement many of us believe should be more open and widespread.

I want to hear from the Opposition — those who aspire to being or could possibly be in government shortly — how it would answer these questions.

Does the Senator know something?

Senator Boyle should not be upsetting the Minister.

Other than pious aspirations, I am not hearing those questions being asked or answered by the Opposition parties.

Was the Senator not listening to the Fine Gael leader?

I heard the Minister raise Fine Gael's policy from the last general election which was based on 4.5% economic growth for the next five years.

That was based on figures provided by the Department of Finance.

Will Fine Gael implement its policy on that basis? There are fiscal conservatives in the party who would baulk at such a policy decision. The costs of such a policy could only be met by a Scandinavian style of taxation. One cannot say one is prepared to spend money without saying how one will raise it, and Fine Gael does not say that. The reality is that we are talking about tax rates well in excess of 50% — up to 60% — to fund the policy decisions Fine Gael is pretending it would make in government.

What will the Government do then?

The Senator has one minute. Senator Boyle, without interruption.

Unfortunately, I only have one minute, which is not long enough to explain my alternative.

Saved by the bell.

It is more than enough time.

The Government has considered universality and looked at the resources available. It has investigated how the majority of people in that age group can retain a free medical service. To the limited extent it can be, a circle has been squared. We must deal with the reality. The only other alternative is a Scandinavian model.

Senator Boyle to conclude without interruption.

If it is not a Scandinavian model it is a German model, which has the same effect of universal health care with 50% of one's weekly salary. Those are the answers.

It is a cheap price.

If Fine Gael is not prepared to be honest about how to achieve this, the credibility of what it is proposing lies in tatters. We must accept the situation as it is.

I too welcome the Minister, Deputy Harney, to the Seanad. I will not repeat many of the points that have been made, but there is major concern in certain areas. I too was in the church on the day of the protest and I was struck by how upset people were. I know many other people were too. I join others in saying I was rather horrified at the way in which the Minister of State, Deputy John Moloney, for whom I have high personal regard, having got to know him in his capacity as Chairman of the Joint Committee on Health and Children, was not allowed to put forward his viewpoint. I did not agree with that. People have a right to be heard.

As Labour Party spokesperson on older people, I maintain that the elderly should not be treated as an expense to be contained. We can make trite remarks and comments, but older people, generally speaking, are a lovely group of people. With the automatic entitlement to a medical card, they did not have to worry too much about going to hospital. I will speak a little about hospitals because of my past experience. Hospitalisation for older people is associated with a major cost factor. I am sure that if an analysis was done on the first three days of a hospital stay and then every ten days after that it would be found there is significant cost involved. When somebody is admitted to hospital, as well as all the issues of prescribing and changing medication, he or she is analysed and subjected to sometimes unnecessary interventions such as blood work. This must add considerably to the expense of putting that person in hospital. If the cost of each blood test is added up it will be found that this aspect contributes significantly to the cost of a hospital stay. Sometimes blood work is done in routine fashion although it may not always be necessary. This is an area that should be considered with the aim of achieving cost savings.

Senator Boyle wondered how we might do things. Working in the health service for so long I saw many areas in which there is scope for savings, which would not affect positive initiatives such as cervical screening. This has been shelved recently, to my regret. The extension of the medical cards entitlement to everybody over 70 was a very positive and forward-thinking development. It had a significant positive effect on the health of older people because it allowed them to be monitored and treated for their ailments at home or by the doctor.

My mother-in-law, a lovely woman of 84, was in hospital recently. When she came home she said it was very cold and that she felt the cold much more badly after coming from hospital. She felt her need for heat was increased when she came out of hospital, which was an additional expense. Bord Gáis is looking for a 3.9% increase in the price of gas, while the ESB is flagging a 5.6% increase. The cost of gas has already increased by 20% and that of electricity by 17.5%, while inflation is at 4%. People who worry about heat or are prone to colds find that their confidence has been damaged, whether because they no longer feel they have the safety net of the medical card or because they have a genuine fear that they are not keeping control of their health to the same extent. They are getting sick and being admitted to hospital. This results in a major increase in costs to the Exchequer as well as the follow-on negative aspects of being in hospital. When their confidence is gone it may not return for quite a while, if ever. I hate to say the word but we must consider the danger of being put in hospital. Older people are being put in a place which is frequently over-crowded and in which they may be prone to being infected with MRSA or other conditions they did not intend to get when they went into hospital. This results, again, in significant additional costs. Thus the automatic entitlement to a medical card was very positive. It allowed people to be at home and to retain their input into their health. It was lauded everywhere as being the right thing to do.

Based on the figures released by the Government, the medical card entitlement for the over 70s had a positive impact on health and took pressure off the acute hospital and nursing home sectors. It was felt that it did not make sense, from an economic or public health point of view, to press ahead with the abolition of the automatic right. That was also the view of Age Action Ireland, which went on to say it challenged the Government to reveal whether it has factored into the estimated savings the increased number of older people who will need to be hospitalised or to go into full-time nursing care as a result of the curtailment of the medical card scheme. Age Action Ireland also made the point that this measure, which has made a major contribution to people's health, was being abolished for the sake of saving less than €20 million. It felt the Government should have considered doctors' fees, the cost of prescriptions and the possibility of using generic drugs.

There is major scope within the health service to consult the people who are at the coalface. We should consult nurses, care assistants and doctors who treat people at the coalface. There is not much point in asking administrators or people who do not know what it is like. Sometimes when a person comes to a doctor or a practice nurse, all he or she wants is a little bit of time. They might not need treatment. Confidence is a major issue for older people. They do not like to have the rug pulled from under their feet in any sense. The removal of the entitlement to a medical card was a retrograde step. The automatic entitlement should remain. I am sorry that has happened.

I admire the fact that the Minister has come into the House. Given that I worked in a hospital for so long, when I met my former colleagues they wanted to know what it was like up here. I was amazed at the frequency with which I had met the Minister through this House and that is to be welcomed. I hope she will listen to some of what is being said. There could be an opportunity sometime to engage positively with people on the ground. I recall the Minister's visit to South Tipperary General Hospital. It was a lovely occasion and it was to celebrate the expansion of the services, even though they were being reduced. It would have been nice for the Minister to sit around the table for a cup of tea or coffee with the staff and ask them how they would run their departments if they had the budget and how they would make sure quality is maintained. The Minister would find that the service would be managed very efficiently. Staff who administer care would allow for the unexpected and we would have a very efficient health service.

I welcome the Minister to the House and I hope she will listen. The Minister is a great attendee to the House. She listens and, if there can be compromise, she is open to it. It is a measure of the woman she is and where she is today. She is a reforming and caring Minister and her caring and listening side has come across in recent weeks regarding the medical card scheme.

The decisions on medical cards was wrong. We did not gauge it properly and the Minister, the Taoiseach and the Government have said that. It is never too late to say "We got it wrong". The Minister has returned with a very good scheme and I welcome it as it is very workable. I will not discuss the financial issues; the Minister has outlined all of them. Regardless of who one is, whether one comes under the terms of free medical card cover, if one is undergoing undue financial hardship because of a medical condition, regardless of financial circumstances, the case can be looked at independently. I am glad to see that. There are people who may be just above the threshold but have expensive medical bills to pay.

Some 330,000 people out of 350,000, which is 75%, are covered by the scheme. I heard the concerns of Senator O'Toole and I am always taken with what he has to say. He is a very balanced man and never comes in with an agenda. He is in a unique position as an Independent Member rather than a party Senator. He has very good ideas, but I do not share his view on a universal scheme. When it was brought in, it was with the best intent. We were in a different economic situation and it was a very good idea at the time.

Senator Prendergast mentioned old people in hospital. We all have experience of that in our families. Old people do not like going into hospital, but they need not be afraid. The older people I know will stay at home and should have no fear of going into hospital. It was unfortunate, and I know the Opposition will jump up and say, "No it was not". Politics played its part in this. I said that in the House last week and the week before.

I am glad to hear Senator Prendergast say it was wrong that Minister of State, Deputy John Moloney, was not allowed to speak. Government Members were invited to the meeting. I will say no more on the matter because I got myself into deep trouble over it and I am glad it has settled down. I am glad to hear others acknowledge what I said in the House last week.

The VHI was mentioned by the Opposition in the past two weeks. There is no need to worry about the VHI. It has seen very few people over 70 who received a medical card leave the organisation. It stated that it welcomes anyone who left, having received a medical card, back into the VHI regardless of their current health. They will not be penalised in any way——

They cannot pay their premia.

The only thing the VHI asks them to do, and it is perfectly entitled to ask, is that they pay the premia outstanding from the time they left. It is a business. The Opposition must get real.

The Senator should get real. Where is she coming from, asking people to pay?

Let the Senator speak.

That is rubbish.

It is a very fair scheme. I smiled when I heard Senator Fitzgerald. She and Fine Gael are very precious regarding Deputy James Reilly. He held the country to ransom when he went out and——

The Government negotiated it. Accept the responsibility.

He bled the taxpayer dry.

There should be no interruptions.

This is rubbish. Accept the responsibility.

It was the Minister, Deputy Micheál Martin. The Senator is using parliamentary privilege to make false claims.

People will have their opportunity to speak. Let the Senator speak. Senator Twomey will have an opportunity.

Fine Gael and Senator Fitzgerald are very precious regarding Deputy Reilly. In his role as president of the IMO, he bled the taxpayer dry.

What did the Minister, Deputy Micheál Martin, do? Is the Senator taking responsibility for the Government's negotiation of the deal?

I ask the Senator to resume her seat.

Is Senator Feeney saying the Minister, Deputy Martin, was an imbecile?

Deputy Reilly is not taking part in this debate.

He bled the taxpayer dry in the interests of his own profession. The Opposition cannot have it every way. He cannot be the champion and they cannot be the champions behind him for the elderly. The Opposition needs to get real. He robbed the State and now he wants to be all things to all people. They cannot have it every way.

Deputy Bernard Allen, on 29 November 2007, criticised the extension of the medical card to all those over 70, regardless of income, and said he did not think it was fair that a High Court judge should get a free medical card. The Opposition cannot come in from all sides.

Senator Feeney must say if that is from the record of either House.

It is from the Dáil record. I congratulate the IMO. I hope talks will come to fruition. It is a much more agreeable fee than that negotiated before. I would like to see the IPU come to the table and look at generic drugs. I wish the Minister well and look forward to having the deal done with the IPO and the IPU.

I am glad the Minister has taken time to be here. I appreciate that. My colleagues have said there has been widespread acceptance from GPs and geriatricians that more older people will be admitted to acute hospitals because of the removal of the over 70s medical card from 5% of people, and there will be a decline in public health. This generation does not abuse and is not wasteful. It rarely uses its medical card. A number of people never used their medical cards but are registered with their GP and the GP still gets paid for those patients. That should have been addressed and still could be.

What is most mesmerising about this decision is the lack of transparency as to the actual savings for the Exchequer. As Senator Fitzgerald said, there is widespread confusion. Most important, the elderly are confused. Why not increase taxation for judges and Deputies who can afford to pay? Let the millionaires pay, not the most vulnerable and those who have worked all their lives to establish our country.

I have had a representation from a man whose wife was suffering from Alzheimer's disease. He aided her in her decline and demise, but he did not know how to care for her because he did not have a medical card. Therefore, he was not entitled to ancillary benefits such as access to the public health nurse, home help and meals on wheels. It is much more difficult to access these services if one has no medical card. An elderly person with a leg ulcer should be able to access dressings. I am aware of many cases where people were nursed back to health in the community, which the Minister advocates, because they had access to all those services through primary care in the community. That is what I advocate — universal health care.

Does the Minister not understand that this may cost the State much more in the long term and as other contributors said, our population is rapidly ageing? Those who do not have access to the medical card will become even more dependent on State services. A previous speaker spoke about having a chest infection. That can become a more serious condition such as pneumonia or pleurisy and the person may have to go to hospital. People do not want to burden the doctor but if they had a medical card, even that 5%, they would use it and, I emphasise, not abuse it. The concern is to keep people out of acute hospitals and ensure they are available for people who are very ill. This universal measure is being axed without regard to the benefits from the point of view of people's health.

On the flip side, the people over 70 who do not qualify for a medical card will have to pay more than €100 a month for their medication and if they need to go to an accident and emergency department, that will cost another €100. If they require X-rays, pathology services or blood tests, they will have to pay for those as well. As the Minister said, this is based on their gross income. Many people's pension funds have gone through the roof, so to speak, as a result of what is happening in the global economy and burdening people to this degree is very serious. As Senator O'Toole said, the true figure in terms of those affected is much more than 20,000. He gave the example of 15,000 teachers but what about the nurses and the gardaí who have retired? All of those people are on public service occupational pensions and they, too, will not qualify for the medical card.

Senator Feeney spoke about the people with pre-existing illnesses who have surrendered their private medical insurance. What is to happen to those people? Will they have to pay back ten years' premiums to the VHI? Any of the older people I know would find it a huge burden to pay back that amount.

I applaud the Minister for rowing back in the way she did and for listening. She is a caring Minister and one who listens. I applaud also the wonderful people in the grey army. In my young life as a politician I have never experienced such strength and courtesy as I did on Molesworth Street that day. I agree with Senators Prendergast and Feeney on allowing people to speak but those of us on this side of the House have not turned this into a political issue. We are elected to represent the people. This is a democracy and I resent Senator Feeney saying we have turned it into a political issue. That is not the case.

With the Chair's indulgence I want to ask the Minister when the sexual assault treatment centres for Mullingar and Galway will open. The Minister might come back to me on that issue in her own time; I will not put her in a position to do that now. A total of €2.4 million has been allocated and everything is in place, including the forensic service. Doctors and nurses have been trained and I would like to know the position in that regard.

I welcome the Minister to the House. I was looking through my notebook this morning and came across a quote I had written when I was involved in a debate with an economist. The comment he made was that politics always wins out over economics. I thought that was a depressing remark for somebody to make because when one is in politics, one must have the bigger picture and the long-term issues in one's sights at all times. In dealing with the principle of universality in respect of medical cards for the over 70s, this was the one time economics won out over politics.

The Minister made the points very eloquently in her contribution. With the declining resources in the economy, is it fair that those people who can afford to pay for their own medical care should pay when there are many people who are more deserving of the State's declining resources? If they are denied access to State services, where is the fairness in that? The Minister had the courage to take on that principle of universality and stake her claim that she stands up for a fairer system which will deliver the resources of the State to those people who are in greatest need.

I have sat through the debate as it has continued and there is one aspect that has been ignored, especially by Fine Gael speakers, and that is the economic position. The Acting Chairman addressed that issue in his own contribution, as did other speakers. We cannot continue to insist that services remain in place when it is clear the resources are not available to pay for them. I came across a great oxymoron in the title of an article, If It's Free, How Much Does It Cost? In this instance, the cost of something that is free comes to the Minister's desk. She is very much aware of the cost of something when it is free to people. If they have an entitlement, most people are not terribly concerned about how much it costs, yet it does cost and that is why choices have to be made with a limited budget.

I applaud the Minister's decision, particularly as the escalating costs of medical cards for the over 70s is often ignored. People only ever speak about the €100 million it cost this year, the €250 million it will cost next year, the 14% increase and so on. That is something that must be curtailed and it would be reckless in the extreme if the Minister had done nothing to try to curtail those costs.

I allude to what Senator Feeney spoke about. I accept Senator Fitzgerald's point that the Minister at the time must accept some responsibility in negotiating a price but I do not believe that the then Minister or Minister for Finance ever thought that, on the introduction of a universal card, the State would be required to pay four times the going rate. I am sure it never occurred to them at the time. Fine Gael's very able and capable James Reilly, now Deputy Reilly, seized the opportunity on behalf of the medical profession, and they were well rewarded for it. I am aware this issue has caused an element of disquiet within the Irish Medical Organisation. Many members of the IMO are happy that a more realistic and sustainable payment will be agreed. I welcome that and hope the IMO will agree to the terms because it is a much fairer system. At least the reformed system for the new medical card scheme will be more affordable.

It is important that the moneys available to the health budget go to the patients in the first instance and for services. Containing the costs to the doctors somewhat is something that is to be welcomed.

The Minister made mention of the statistics, and it was referred to by other speakers, and said she was certain about the figures for the 20,000 people who will now qualify. I want to ask a question about the statistics available to us. On previous occasions when we introduced various benefits the statistics have not always been good. Is the Minister confident that the statistics available to us across the board are correct? This is an area in respect of which we cannot afford to obtain incorrect information. I would welcome the introduction of identity cards for all citizens if this would assist in ensuring the statistics are correct.

I welcome the decision the Minister has made and also the changes that have taken place. She has taken vital action and stood up for a principle, which is important. I compliment her on the courage she has shown.

I wish to share time with Senator Bacik.

I welcome the Minister. I concur with those who stated it is good to see her so willing to come to the House on so many occasions.

At the height of the crisis that arose a few weeks ago, two Members of the Lower House who are over 70 years of age and I were interviewed on the plinth by RTE. The first question I was asked was whether I have a medical card and whether I receive free medical care. I do not recall ever receiving a medical card. However, on the one visit I made to him last year, my doctor stated that since I am over 70, I am not obliged to pay. He either missed out on the €640 the State should have paid him or on the fee that I should have paid for his services. I have no difficulty with stating that those at the top level should be obliged to pay. However, there is one query in that regard which I will put to the Minister in a moment.

As stated on the Order of Business, I am concerned that people do not realise the seriousness of the financial crisis into which the country is facing. We must take action to solve that problem. One of the things we must do is monitor areas in which we can afford to reduce costs. We must then proceed to reduce those costs in whatever way possible. I have a difficulty with those who object to every effort to cut costs without offering alternative proposals.

The Department of Health and Children employs approximately 100,000 people. Despite the pay freeze, the partnership deal will cost €189 million in a full year. That figure does not even include the cost of pensions. We will be obliged to pay 10% of every public service worker's salary from moneys borrowed. We have already borrowed so much and there is no sign that we will be able to reduce our level of borrowing in the near future. I have a real difficulty in respect of this matter, particularly in circumstances where there might be a failure to cut costs.

In my opinion, the deal done in 2002 was not good. I support the Minister in her efforts to ensure a better deal is obtained on this occasion. Unlike Senator Feeney, however, I would not state that we were screwed by the other side. If a bad deal is agreed, it is the fault of the negotiators on both sides. I applaud the Minister on what she is trying to do to reduce the cost to the State.

I have one query to put to the Minister. I am of the view that we should spend money on prevention rather than cure. In many instances we do not do so. From a business point of view, I came across an interesting case whereby one British company made great efforts to reduce the amount of salt in bread sold in its stores. What it did was approved and accepted because there was a large campaign in Britain in respect of how bad salt can be for people. When something similar was attempted in the Czech Republic, the relevant supermarket's customers sprinkled salt on their bread and ended up consuming far more salt than would otherwise have been the case. I refer to this case because it provides an example of what can be done.

The position is similar as regards obesity, in respect of which there is a major problem in this country. An extremely interesting article on this matter was published in The Irish Times yesterday. We must take action to educate people about the dangers of obesity rather than being obliged to provide them with hospital care at a later date.

Prevention is better than cure. Will the Minister put my mind at rest and indicate that the steps she is taking will not retain in our hospitals those people who might otherwise have been cared for at home?

I thank Senator Quinn for sharing time and I welcome the Minister. I wish to tackle a topic to which other Members referred, namely, the principle of universality. Essentially, as the Minister and other Senators stated, this matter boils down to a single question as to why richer older people should receive free health care. The Minister for Education and Science framed the same question some time ago when he asked why the children of millionaires should not be obliged to pay university fees.

There is a certain superficial attraction to the argument that people should pay for public services if they can afford to do so. However, this masks a clear ideological commitment to a different way of providing public services. We should be honest about this matter. Those of us who defend the principle of universal access are not saying that richer older people or millionaires should obtain services free of charge. Rather, we are stating that we should adopt the European social model under which richer older people pay more for public services through a fair and progressive taxation system. Under this model, services are provided equally to all on the basis of need. There is evidence to show that this method of provision is fairer and more equitable and does not lead to the sort of two-tier access that currently exists in the Irish health service.

The health service is beset by many problems. However, the scope of this debate does not allow for us to discuss them today. The provision of medical cards, free of charge, to the over 70s was a start is the context of creating universal health care provision. I and others on this side of the House have argued that there should be universal access to health services in the same way that there is such access to primary education. We do not ask that millionaires should pay more if their children attend national schools. No one in the House would argue in favour of that. However, the principle is the same. We all accept that our primary education system, which is fair and equitable, allows the children of millionaires to attend school on the same basis as those whose parents are in receipt of social welfare payments or on low incomes.

The same principle should apply in respect of preschool care and the health care system. If it did, we would be on the road towards a more equitable society. Such societies exist in countries that have embraced the Nordic model to which I refer. The universal medical card for those over 70 years of age could have represented a move towards this model of provision. Unfortunately, however, we have moved away from that model and back towards one which involves means testing. It is also unfortunate that the Minister for Finance has indicated a more universal — if I might use that word — attack on the principle of universality by signalling that child benefit is likely to be means tested in the future. This is a regressive policy and it will lead to our moving towards a system under which public services will only be available on a means-tested basis. As a result, two-tier models will appear at all levels and in all areas of public service provision. That is fundamentally regressive because it will lead to the creation of a more unequal society.

Millionaires have their waste collected and have access to public transport on the same basis as everyone else. That is how it should be. However, they should pay more for these services by means of a progressive tax system. Senator Quinn and others asked those who support the principle of universality to indicate from where the money will come. It should come from higher taxes on the wealthy. I said this on previous occasions and I make no apologies for doing so again. Instead of a 1% or 2% levy on those on certain levels of income we should introduce a higher rate of taxation in respect of those who earn over €100,000, €150,000 and €200,000, respectively. That would have been a fairer way to fund universal access to public services.

I welcome the Minister, who is always prepared to come to the House to answer questions. It is fair to acknowledge that the announcement in the budget in respect of medical cards was poorly thought out. I thank the Minister for reviewing the position and for getting the balance right. We upset many older people who provided the country with wonderful service in the past. I take this opportunity to apologise for causing any hurt or concern to these people, some of whom may be vulnerable, not in the best of health or whatever. If one makes a mistake, there is nothing better one can do than acknowledge that fact.

Older people have given the country great service and have been loyal supporters of those in the political arena. Regardless of the parties they favour, it is these individuals who come out to vote. They are very important to us as public representatives.

I welcome this debate because it highlights the issues that exist. Like Senator Quinn, I am of the view that we must address the economic situation. The Minister was faced with an unenviable job in the context of putting together a departmental budget and setting down parameters relating thereto within which she could work. When she was faced with trying to make the system fairer, which she has done, she again had to try to find savings. She is working within the economic structures and I do not consider that a rowing back in any way. We are listening to what people say. When people came to the gates of Leinster House to object to what we were doing, we said we were listening and we cared. It is important we did that.

We urgently need to highlight volunteerism. Many older people have retired early. They could make a huge contribution to various parts of our community. It behoves us to have organisations that would approach these people and tell them they can make a difference by making that contribution. Retired teachers, bank managers and so forth could become involved in volunteerism. It plays a major role in every aspect of life in this country through involvement with the GAA, soccer teams, the Society of St. Vincent de Paul and other organisations.

The expansion of health services has been enormous over the years. I spent eight years as a member of a health board and I can see the improvement in the standard of the services. More than 10,000 older people receive services in the home. This is a huge and important part of delivering services to older people. It is the most economical option as it keeps people out of nursing homes. A total of 53,000 people receive home help, with 700,000 more hours of home help being provided since 2005. These are huge improvements in the health service.

All of this costs money. We must ensure, within the parameters of what we can afford in the budget, that we are getting value for money. That is most important, now more than ever. Every euro squandered will put somebody on the live register. I feel sorry for people such as the young person on €40,000 per year with two children and a wife who is probably not working. They cannot acquire a medical card. It was important the Minister took action. The 5% will probably help to include people who become unemployed. We hope the unemployment will not continue for too long. It is a huge drag on our economy. A total of €19 billion is being spent on unemployment at present.

We must recognise our situation. Senator Quinn is correct that we must live within the parameters of what we can afford, and the Minister is trying to do that. I welcome what she is doing with the health service generally. However, it is time to examine the Health Service Executive. The HSE has been working for the past four and a half years. I do not believe it is working correctly. The Minister will have to regionalise it and make it more meaningful to people who use the services, which is not the case at present. The Minister is regionalising the BreastCheck service but she should regionalise the other parts of the health service and make them more relevant to the local people who use them. That should be done sooner rather than later.

This is a great debate because it has broken down into an ideological political debate. One either believes in universal entitlements or one does not. Clearly, the Government is following the line of the Republican Party in America by saying that people cannot have entitlements if the money is not available. Members on this side of the House say we must set standards and a baseline for people. One can have universal entitlements in this country. The Government could have maintained the universal entitlement for everybody over the age of 70 in the same way as it could maintain the free travel pass, television licence and so forth. The universal entitlement does not have to become an issue because the economy is deteriorating.

I will explain why. The Minister and I had numerous debates about this issue in the Lower House when I was a Deputy. She often pointed out that the health service in the United Kingdom costs €2,000 per citizen in that country. She also pointed out that health care in this country costs €3,000 per citizen per year. Everybody in the United Kingdom, not just those over 70, is entitled to free general practitioner care. The UK can provide more care and provide it more cheaply. Why is that? It does it more efficiently.

This Government has failed to introduce transformation, reform and accountability to the system, as is clearly shown in the argument from the other side of the House. That is what went wrong. It is not because Deputy James Reilly made Deputy Micheál Martin look like Mickey Mouse but because nobody in the past seven years has done anything about the system. The Minister and I sat on opposite sides of the other House when I told her it was not possible to have two rates of payment for the same group of patients. Not only did this Minister do nothing about it, neither did anybody who is saying here today that Deputy James Reilly took the mickey out of the former Minister for Health and Children, Deputy Martin. Deputy Micheál Martin and the Government did nothing to reform the health service and did not deal with this issue in the past seven years. I as Fine Gael spokesperson on health and children raised this with the current Minister but nothing was done. That is what went wrong.

Universal entitlement can survive these economic difficulties. We are still spending a great deal of money but if we reformed the public and Civil service, it would be possible to make the changes we have discussed. Senator Quinn is respected in the House for making good economic arguments. However, he would never consider turning off the heating in his stores if profit margins were becoming tight. He knows it would be a foolish decision that would drive people away. He would make the decision to cut costs and make the business more efficient. That is what should have happened in the health service. If there is an economic debate about this, it amounts to the failure to make accountability and reform part of what the Government has done for the past six or seven years.

Penalising older people now, penalising children in the future, lining up child benefit for taxation and removing home help and other services from older people is nothing more than an admission of failure. The Government failed to protect the people it was elected to protect. The Minister need not give me any of the silly arguments she is trying to gather to claim that this is about money or anything else. It was a failure to do her job. We could not only continue to give the medical card to everybody over 70 but also give the medical card to every child under the age of five years if we had reformed how money is spent in the HSE.

As I said previously, the UK spends €2,000 per person every year on its health service while we spend €3,000 per person per year. We get less for our money. Why is that? The Minister and I had this debate on more than one occasion in the Lower House. Furthermore, I am disappointed that the cancer vaccine for young women will be stopped. There is talk about drug restrictions in the General Medical Services scheme whereby I will be told, as a general practitioner, no longer to give the good drugs to my patients who have a medical card but to give them the yellow pack service. That is now Government policy. That is the road the Government has taken; it must stand over it.

With regard to the debate about universality, and it has merit, tax rates of at least 60% would be required to fund the proposals suggested by the Opposition. Senator Twomey referred to the United Kingdom but pharmacists in the UK, for example, earn at least €100,000 less than their Irish counterparts and the same applies to general practitioners. In the British health care system, one cannot get Herceptin for breast cancer, for example. We must compare like with like.

Recently I met the German deputy Minister for Health, who was here as part of a delegation. She pointed out that a high dependency bed in a nursing home in Ireland costs as much per week as it does per month in Germany. If we are to have a debate and compare ourselves with other countries, we must refer to the cost of health care professionals and to patient-staff ratios, including the ratio of nurses to patients, which is double in Ireland what it is in France.

We are living through a very serious economic crisis, as Senator Quinn pointed out. A number of people have yet to come to terms with how bad things are. Senator Quinn made the point that the money for 10% of all public sector salaries must be borrowed and that 100% of the pay for any new public sector employee recruited will have to be borrowed.

I did not, and do not, have the option of making people in the health service redundant. However, we should have a redundancy plan but we must be sure about who we want to make redundant. We had a redundancy plan in this country in the past and the wrong people left the public sector, although many of them subsequently returned. We do not want a redundancy plan which involves us running around like headless chickens cutting 1,000 jobs here and 500 there. It must be properly thought out and funded up front because it will be expensive. We must also ensure that we maintain appropriate patient-staff ratios. Any redundancy plan must apply across the health service, not just in what is broadly called the bureaucracy. One person's bureaucrat is another's support staff. None the less, there are many areas in which there is scope for redundancies.

The bill for public sector pay next year will be €19 billion. A 10% saving on that would yield €1.9 billion. If we could make choices like that, some of those other choices might not have been necessary. I make that point because we will have to make those kinds of choices.

Decisions being made in the health service are not taken lightly. The cost of medical cards will rise by 14% next year. The numbers accessing the over 70's medical card scheme is growing by 7% annually while the number receiving medical cards in the general population, that is, among the poorest people, is only growing at 2%. Up to now, a couple aged 69 earning more than €300 per week would not get a medical card but once they reached 70, they qualified for a card, regardless of their means.

I wish to clarify a point in connection with something Senator Quinn said. When a person reaches 70, he or she does not automatically receive a medical card but must apply for one. I have met a number of people who have applied for the card but have never used it. However, regardless of whether one uses it, the nominated doctor is paid the fee of €640. Furthermore, it was not open to us to renegotiate that fee unless we annulled the legislation. The contract with doctors in relation to that fee has legislative backing. The contract is based on the Health (Miscellaneous Provisions) Act 2001 and the fee can only be changed by altering that Act. The ending of automatic entitlement is essential to change the fee structure and the contractual arrangements which were entered into. The contract states that under the 2001 Act, the contract has been agreed with the IMO and can only be changed with its agreement. I am not blaming anyone for the contract. It was entered into in good faith and at a time of plenty. The view was taken that the scheme would be good for older people in our society.

There also happened to be an election pending.

The estimate at the time was that it would cost €15 million. As we know, that estimate was inaccurate because the numbers on which it was based were wrong.

To those who say that more than 5% of those over 70 will be disqualified, the Central Statistics Office has given the Department data on the number of people over 70. It is interesting to note that there are 10,000 fewer people over 70 than the current number holding the medical card. That is probably because people have passed away who are still factored into the equation. The Revenue Commissioners tell me that 57,000 people in Ireland over the age of 65 pay tax, approximately 18,000 of whom pay at the higher rate. The numbers decline very rapidly once one gets to people aged 70 and over, although to be fair to the Revenue Commissioners, they cannot distinguish between people aged 65 and 70.

No additional staff will be recruited to administer the means test, which we are trying to simplify. The means test for a card runs to eight or nine pages. I often help people in my constituency clinic to fill out the form and I have told the Health Service Executive that it must be simplified. It is an extremely long and complicated form. Indeed, means test forms should be simplified for everybody, but particularly for older people. We have made provision to repay people for nursing home charges. A total of 75,000 people or their estates qualified for reimbursement but 40,000 older people did not apply to get their money back. It is not that they were not aware of their entitlement. Many said that they did not want the money back because they received good care. We are dealing here with a group of citizens who are extremely honest and, therefore, a very simple form of assessment will be required.

I am also anxious to ensure that if a person qualifies for a medical card as part of a couple and his or her partner subsequently passes away, that person does not lose the medical card.

That is a very important concern.

In the context of the legislation, I am seeking to facilitate that. Once one does a means test at 70, that should be the end of the matter. There are very few people who can expect their means to improve after the age of 70. Perhaps one or two might win the Lotto but there should not be very prohibitive legislative requirements for the sake of one or two people.

The legislation to which I am referring will also protect community rating. Since the Supreme Court decision of 16 July, community rating is extremely vulnerable. I intend to include a measure in the legislation that protects community rating. If I do not make such a provision, older and sicker people in Ireland will not be able to afford health insurance, if the market segments. The Government is addressing this issue, which has not received a lot of attention since the Supreme Court decision. People have not yet made the connection between the decision of the court and the potential consequences for older people. We must bring in legislative provisions to protect the cost of health insurance for older people.

It is important to point out that people would not have dropped their health insurance because they were in receipt of a medical card because the card only provided for the statutory hospital charge. If one has a medical card, one does not pay that charge. Otherwise, there were no other hospital related benefits that people would have assumed on getting the card. The VHI's Plan P covers that and it has informed the public that if people exited Plan P and wish to re-enter it, they can do so without any penalty. They will not have to pay back any money for the past seven years. Approximately 25,000 people have that insurance plan, which means they do not have to pay the ten-day statutory charge.

I cannot deal with all the issues raised in the short time available to me. However, I will endeavour to deal with some more by way of question and answer.

On the issue of the €100 million figure, €16 million is the capitation and €20 million is the 5%. I must make it clear that we were always going to help 95% of older people. One of the reasons there was so much confusion over this matter, which I very much regret, is that everybody over 70——

The Minister should be aware that there are only two minutes left.

Everybody over 70 genuinely thought they would lose their medical card but that was never going to be the case, with 215,000 still qualifying. A further 85,000 were going to get either a full medical card or a doctor-only card. We were going to give a cash payment to those who did not qualify for a card towards the cost of their health expenses.

Having reviewed that plan, in light of the public reaction and following consultations with the IMO, we decided to forget about the cash payment and to raise the income thresholds instead. It was always our intention to help older people, up to the 5% cut-off point, with the cost of their general medical services, their general practitioner or their drug costs.

There is only one minute remaining in the slot. I invite each spokesperson to ask a question of the Minister and allow her to use the remaining time available to answer.

I particularly welcome the clarification the Minister has just given with regard to a couple who qualify for a medical card and where one party subsequently dies, the remaining party will retain the medical card. That will be of relief to many people.

The Minister spoke about people not realising the seriousness of the economic situation. When the Government negotiated the social partnership agreement recently, was it tuned into the reality of the economic situation?

On the issue of the €16 million that the Minister said she is saving on drugs——

The Minister said €60 million.

Am I right? Did the Minister say €16 million?

No, I said €60 million.

I ask the Minister to outline, in the limited time available, how she expects that saving to be made and what initiatives have been taken in that regard.

I have a very short question related to my earlier remarks. Will the Minister, Deputy Harney, put my mind at rest on the matter of the likelihood of the over 70s going to hospital rather than taking primary care through the local general practitioner? I am concerned as this relates to the notion of prevention rather than cure.

Will the Minister consider carrying out a pilot scheme at some stage? This could involve choosing a given hospital and examining whether there is a different way of dealing with the budget and its effects on fontline services.

Some Senators have said the public does not realise the seriousness of the economic situation. I believe the public is prepared for some taxation——

Our time has expired and I require a question to the Minister from the Senator.

I do not need to be prompted. If we want to make radical changes in policy——

According to the Order of Business, a question must be asked.

We must take the public with us and a national debate is required. What is the Minister's view on this? I believe there should be a pay freeze for two years for the private and public sectors and that is the end of the story. It would solve the problem.

That sounds like the Fine Gael policy.

The public is ready for something such as this. We cannot let Mr. David Begg decide what to do. We must bite the bullet. Will the Minister provide an update on the new proposals for the regionalisation of the Health Service Executive?

We have exceeded our allocated time. With the permission of the House I will allow the Minister, Deputy Harney, three minutes to respond to the questions.

Of course; we have plenty of time.

Is that agreed? Agreed.

The possibility of a pay pause because of the economic situation was mentioned. There is a pay pause in the public sector. An 11-month pay pause was agreed as part of the national partnership talks. However, as we are all aware, the economic situation has deteriorated rapidly since that agreement. Every possible option for the public finances should be on the table. The more that can be saved on pay, the more there will be for services. Most reasonable people take the view that we must examine redundancy proposals. The Taoiseach established a task force to examine public sector reform. I understand it will submit a report in the coming weeks which will form the basis of a reform agenda for the public sector during 2009. The Minister for Finance is the Minister with responsibility for the public sector, however as many are aware I am open to making changes in public sector numbers to facilitate scope for services to the public.

The issue of drugs is a matter for clinicians to advise. Dr. Michael Barry, head of the National Centre for Pharmaco-economics, St. James's Hospital and Trinity College Dublin, was appointed to a group, including clinicians, to make recommendations. The group will report to me by 1 December next. The group and I had a long meeting yesterday. Dr. Barry is positive about the scope for considerable savings on this matter, as are many pharmacists.

I refer to Senator Quinn's question. Much work in Ireland in recent years has involved providing support at home for older people. There are 10,000 older people supported at home with the clinical home care package. This support package includes the provision of public health, nursing, physiotherapy, occupational therapy and so on. In the past these services had to be provided in hospitals. The emphasis of rolling out primary care teams is on providing support in the community outside of hospitals, which are the most unfriendly places for the provision of services. The same applies to home help hours. Some 53,000 people receive home help support, many of whom are older people. We wish to continue to maintain as many of these packages as possible. The option was to leave the medical card schemes as they are or tear to pieces home help services and home care packages and forget the strategy of gearing up. It was not a question of taking the action just for the sake of it.

We examined many choices. There was an option involving prescription charges. Some doctors suggested the possibility of a small prescription charge. We took the view that it would be wrong to charge for essential medicines, especially for poorest people, although several general practitioners suggested it was a good idea and such schemes operate in many other countries. We examined the option of changing the long-term illness scheme. This involves a card given to people with certain illnesses regardless of means. It would apply to people with very serious illnesses. The cost of this scheme amounts to €160 million and we took the view that we should not interfere with it. This decision was taken after much debate and discussion at many Cabinet meetings.

I refer to the question on frontline services. When people discuss frontline services the assumption is that there should be no change in staff ratios. There is a very high nurse to patient ratio in Ireland. It is twice the nurse to patient ratio in France and we do not have appropriate staff to patient ratios. Consider the cost of changing staff ratios in health care. Some 80% of the cost of health care is wages, which we could not touch next year. Therefore, any reduction to the €700 million to which I referred must come from the remaining 20%. That is why it appears the change in plans for the human papilloma virus, HPV, vaccine is one such proposal. That is the reason such changes appear very severe. However, I must cut €700 million from 20% of health spending and this involves making tough decisions, which I accept.

Health issues are a daily part of the national debate. Following the decision on the provision of the HPV vaccine announced yesterday, there was an implication in the other House this morning that the timing of the announcement was because of the election in the United States of America. However, it was announced yesterday because Deputy James Reilly asked a question and the RTE health correspondent made phone calls on the matter. We wanted to be honest. It was not a question of hiding the fact that it was going to happen. There are two companies involved with great public relations machines and the matter would not have gone under the radar. I say this in case there is an assumption that the announcement was related to the USA elections.

We will not change the structure of the HSE. Consistency of support is one of the reasons the HSE is important as a national organisation. Senator McFadden mentioned public health nurses dealing with ulcers. In some places they only deal with leg ulcers if the patient has a medical card. There is a view in other places that such treatment should be dealt with on the basis of need. We seek services based on the needs of the patient, especially given the new primary care strategy. The HSE must change the way in which it is managed and there must be clear lines. This point surfaced in the Fitzgerald report on the Midlands Regional Hospital, Portlaoise. There must be clear lines of accountability, which is possible in a unified organisation. This is the process Professor Brendan Drumm, to be fair to him, has undertaken in the past year through significant internal organisational efforts, the likes of which never before happened in the country on such a scale. Professor Drumm made announcements on this matter which will be put into effect in the coming months.

Sitting suspended at 1.50 p.m. and resumed at 3 p.m.
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