Sunday 22 September 2019

Richard Curran: 'Value for money must be at the heart of hospital reform plans'

Cash injection: Making public hospitals exclusively for public patients may not go far enough
Cash injection: Making public hospitals exclusively for public patients may not go far enough
Richard Curran

Richard Curran

If anyone wanted to build a model health service in Ireland, they wouldn't start where we are now. But starting here is the only option when it comes to moving toward better healthcare that also provides value for money.

There can be no blank sheet on which to work when imagining and plotting a course to a better way of doing things. This is very evident in the report of a review group on private practice in State-owned and funded hospitals published this week. Chaired by Donal de Buitléir, the review group tried to plot a course toward one of the stated aims of the Sláintecare initiative.

De Buitléir put it well when he said: "It is difficult to think of any other public service where people are treated more favourably simply because they can pay more for the service." He acknowledged his report was only part of the solution, and "matters such as the expansion of hospital capacity, reducing waiting times and the reconfiguration of health services through better primary care services and access to diagnostics will also be prerequisites for success".

Given how dependent public hospitals are on the income they receive from treating private patients, converting them into public-patient-only hospitals would be very costly.

It would require a hit to the public hospitals of around €600m per year. This additional funding would have to be found from the State through higher taxes or some other method.

If the goal was achieved in a decade, the cost would be around €6bn. But there is more. Around 94pc of our hospital consultants working in the public sector have the right under employment contracts to earn private income.

The plan envisaged a change where those working in the public system would work solely for that system. There are six different categories of consultant contract. Type A is the only one that prohibits private sector work.

There are only 169 consultants on contracts who cannot do private work. That leaves around 2,500 with contracts with rights to practise in a private capacity in public hospitals, according to the report. More than one in five can conduct private practice off-site in a private hospital or clinic.

The report recommends all new appointments would be for public patients only. All the others would have to be offered some kind of one-off payment to agree to switch to public patient care only.

With around 27pc of consultants due to retire in the next 10 years, it isn't clear how that payment would be calculated or what it would cost. But it would have to be big. After all, hospital consultants are entitled to retain employment contracts they have. They would have to be convinced or forced to change. The report says it isn't possible to strip out the average private income benefit to each consultant, but quotes Health Insurance Authority figures which say the total is roughly €400m.

That implies a lot of compensation. Then there is the question of hiring new consultants and what rate of pay they would need to receive to want to take up the job, given they would not have additional private income.

The report finds that Irish hospital consultant pay rates are reasonably competitive, although not as high as the UK or Australia. But then, ours include, in most cases, private income top-ups.

In fairness to the consultants, the Hanly Report estimated back in 2003 that Ireland would need 3,600 hospital consultants by 2013. The population of Ireland was 4.6 million in 2013. It is now five million, and we have 2,800 hospital consultants.

Rather than blame consultants for this complex state of affairs, we surely also have to look at the myriad bad decisions made by their employers in the past, which resulted in around 40pc of private health insurance patients being treated in beds in public hospitals.

Turning that around will have other complications. The review group makes the reasonable assumption that fewer people will take out health insurance if it no longer helps you to jump the queue. The idea is that the queues will get a lot shorter if public hospitals are available exclusively for public patients and private patients go elsewhere.

It estimates this could lead to a 30pc increase in the cost of health insurance. Bad news for those who have it but, presumably, the idea is that it wouldn't be as useful or as needed as it is today. Achieving the aims of the review group would see a separation of public and private hospital care. So what role will the private sector have in the provision of healthcare in this envisaged future?

In an ideal world, everyone should have access to high-quality, value-for-money care. But what if the waiting lists and inefficiencies in the public system are not solely down to private patients in that system? What if the problems are more endemic and relate to weak management, lack of political courage, systemic waste of money, not enough investment, and a deeper resistance to change within the public system?

Could we end up paying more in taxes, higher wages to health professionals and a massive compensation scheme for consultants, and still not get the system we deserve? It is very possible, if not likely.

Perhaps we are looking at this the wrong way. The public system has a monopoly on public patients, with some minor exceptions like the National Treatment Purchase Fund. Back in the day, when Aer Lingus (a State-owned airline) dominated Dublin-to-London flights, they cost a fortune. Private sector competition with the likes of Ryanair changed all that. Bus travel used to be dominated by State companies like Bus Éireann, but competition changed that too.

What if privately owned hospitals could have a greater role in providing services to public patients? The obvious answer is that it would undermine the State's role in providing the service, and undermine the jobs of tens of thousands of State health employees.

Privatising the health service is not the answer. But what if some of the new hospitals to be built were privately owned and run, but had contracts to provide their services to the State at set prices - a long-term service agreement?

The first thing it would do is highlight the inefficiency of the State system. This would put pressure on those in the sector to provide a better service.

Doctors might refer more patients to privately run facilities because the waiting lists were shorter, and the service was better.

At least for a few hospitals or for specific hospital services, the private sector could play a part, without privatising any of what is there right now.

Publishing trolley numbers every few weeks was a good idea to force hospitals to tackle the problem. But because they do not compete and the entire system is public, it is debatable whether it has really been effective.

Imagine if the trolley numbers and waiting lists for a privately run hospital, or for privately run services for public patients, were available. If they were much better, it would secure more patients and get more funding.

The public system would have an incentive to up its game and do things better.

There is no doubt that parts of the health service need more money and more investment.

But, equally, it needs to do things differently. There are no guarantees that making public hospitals exclusively available to public patients would be enough to bring about the changes that are needed.

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