Press Release

Martin expresses concern about Labour Party proposals

The Minister for Health and Children is determined that any debate on the services must be well informed and not simply one which is long on aspiration but short on detail. As he pointed out “I had already decided to have the issue of funding methods addressed in the context of the comprehensive value for money audit of health services which is part of the revised Programme for Government. However, the Minister has serious reservations that a large part of the strategic development of the health services (i.e. general hospitals) would in effect be handed over to private health insurance companies.

Progress is already being achieved in narrowing the gap between Irish per capita spending and the EU average. The Government is committed to using the fruits of economic growth to bring Irish per capita health spending up to the EU average as soon as possible”. It might be noted that over the time the present leader of the Labour party was in Government as Minister for Finance the increase in Exchequer funding for the public health service was about £400 million. Since this Government took office the increase has been over £1500 million. Again, when the Labour Party leader was Minister for Finance he was part of a Government that decided on £108 million only for the Health capital programme in 1997; this year the figure is £231 million.

In regard specifically to the Labour Party document he is concerned that there are major gaps in the analysis. It is not clear for example, how the integration of hospital and community care services are to be more fully developed with the proposed funding arrangements. Better integration of services was one of the key reasons for the establishment of the new Eastern Regional Health Authority. The Labour Party says that it wants greater integration but they do not indicate how this will be done and who will be responsible for the integration under their proposals. The Labour Party dependence on private health insurers must raise serious questions about the integration of hospitals funded by private health insurers and the health board system which must meet the costs of community care support. This proposal would hand over a critical area of strategic planning to private health insurance companies and thereby seriously undermine planned integration of services. What role will health boards in reality have in the integration of services where they no longer have a say in the funding of hospitals? Hospitals will be forced to make service decisions based on potential income from insurance companies even where this runs counter to needs assessments by health boards.

The Labour Party propose that capital funding be supplied by the Exchequer but with a capital charge levied on the hospitals concerned. How would this capital charge translate into prices paid to the private insurers by the individual and the Government? This could be a significant extra cost to the consumer and indeed, by extension, to the Exchequer. The Government is committing £1 billion under the National Development Plan for the general development of the public hospital system. It is difficult to see how such a bill could be translated into insurance premia without seeing such premia becoming more expensive. If the Government is to finance capital developments in public hospitals and is also to cover the insurance premia which include the charge levied for these developments it appears that the Exchequer will be paying on the double.

Labour’s proposals will undoubtedly result in extra administrative costs with additional layers of management required to deal with a more complex system than our current one. In addition if these proposals resulted in a general fee for item based remuneration for hospitals consultants this would also have a significantly inflationary impact.

In concluding the Minister considers that the report is seriously lacking in the necessary specifics and costings. The issue of what proportion of premia would be funded by the state and by different categories of individuals has also been fudged. The absence of costings gives rise to the question as to whether individuals will be faced with significant cost increases in meeting health care costs. These details must be clarified if the discussion of the proposals being put forward by Labour is to be soundly based.