Healthcare in Ireland

The article below appears in yesterday's Irish Times. It is an excellent analysis about where we are and the future that is open to us regarding our health service.

Back in the 1960s when Mount Carmel Hospital was being built, the Blue Nuns, as they were called, went from door to door in the neighbourhood collecting funds for the hospital.

Has that money ever been recognised? Have the people who contributed to that fund ever been beneficiaries of the profits that are today made by the hospital?

David Begg is saying something of great merit in the article below.



Healthcare now facing crisis point

IF THERE is any silver lining to last week's Supreme Court decision on risk equalisation, it is in the probability that co-location is now also a dead duck, writes David Begg

This highly ideological plan to move the delicate public-private hybrid that is the Irish healthcare model aggressively in the direction of private provision is predicated on the affordability of health insurance. It seems inevitable that the absence of risk equalisation will undermine community rating and put health insurance beyond the reach of older people.

The Irish Congress of Trade Unions (Ictu) has always opposed co-location. We regarded it as a euphemism for the privatisation of medicine. We could see the rationale put forward to support it was bogus.

In a forensic deconstruction of the concept, Dale Tussing and Maev Ann Wren, in a report commissioned by Ictu three years ago, revealed that the tax initiative on which it is based would cost the Irish taxpayer €400 million to €500 million. It would also consolidate existing inequalities within the two-tier health system we have.
But the biggest flaw in co-location was always its implications for older people. It was clear that many people who paid health insurance all through their working lives could find themselves unable to afford it in retirement.

This problem would be exacerbated by two external factors: the demographic changes which over the next 20 years will hugely increase the number of older people in society; and the large-scale abandonment by employers of defined benefit pension plans in favour of defined contribution plans, which basically means that many people now working face a collapse in their incomes on retirement.

The Supreme Court decision brings this problem front and centre. It is a fact that people in retirement will not be able to maintain health insurance premiums in the absence of community rating.

Without private health insurance, people will have to rely on the public hospital system and this implies a big investment to increase capacity in the public system. The numbers of people well off enough to pay the insurance premiums will not exist to make 11 new co-located private hospitals viable. Even without this development the financial assumptions underpinning co-location were beginning to look decidedly shaky. Some of the principal investors, faced with more exacting conditions from newly risk averse banks, are in negotiations with the Government to have the taxpayer assume a greater level of risk if the project fails. This would be unthinkable and must not happen.

The Government must face up to the reality that the ideologically driven model of private healthcare provision upon which they embarked under the current Minister for Health and Children is no longer sustainable. If this is so then what is to be done?

In my opinion we have to consider a model of healthcare based on a mandatory universal insurance system operated by the State. This would ensure that health services are underpinned by a sustainable funding arrangement that is adequate to the needs of the population and fair to every citizen regardless of age or means. This is the system favoured by most countries in Europe. The VHI is the obvious platform upon which to build this model given the capabilities required.

I suspect that this Supreme Court judgment may be regarded in time as a cathartic moment in Irish history. The reason is that it lays bare the deficits in Irish social provision which hitherto the Government had relied upon market solutions to fill.
The extent to which changing demographics pose challenges for policy makers is, I think, insufficiently appreciated.

Healthcare expenditure is related to population size and demand. Demand is related to age, and ability to pay in older age is related to the quality and coverage of pension schemes. The care of people generally is related to labour force participation. Care of children and the elderly used to be looked after in the family. With increased labour force participation by women, this duty increasingly has to be provided outside the home. Yet we have a very inadequate infrastructure for caring for the elderly and none at all for children.

These deficits in social provision will sooner or later become a crisis just as health insurance is now in crisis. There is no planning for this eventuality. By 2026 our population is forecast to be 5.7 million. An increase in population of this magnitude would make the foregoing challenge much more acute.

There is a real danger in my view that we are wilfully neglecting what we need to do in order to ensure a sustainable future for this country. We currently have a low dependency ratio and these factors combined give us a unique opportunity to reflect on where we want to go and to make the necessary changes to get there. For me it is a no-brainer that Ireland should seek to emulate the Nordic countries. On every criterion of economic efficiency and social cohesion they lead the world. They pursue a polity which is broadly social democratic in nature.

Our 20-year dalliance with neo-liberalism will end in tears. That it is unravelling the social fabric of our country is epitomised by what is happening in regard to the various aspects of healthcare provision. More importantly, we are losing our sense of social solidarity and the common good. It is important to be able to discern the signs of the times.

• David Begg is general secretary of Ictu. He is a governor of The Irish Times Trust