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John Crown: Putting reform on the long finger will only cost us more

It is hard to imagine a more daunting set of political challenges for a novice minister than those facing Minister for Health Dr James Reilly when he bravely assumed office 10 months ago.

With his ministerial seal, Dr Reilly inherited a mediocre health system that was crying out for reform and investment, unluckily, at a time when our Republic was mired in a financial crisis so grave that it necessitated ongoing, widespread, deep cuts in public services. We had, moreover, lost our financial independence, and major government decisions which involve spending public money must first pass Chancellor Merkel's famous "will it cost German hairdressers anything?" test.

To compound this, there are concerns about the dominant private insurance company, the VHI, an organisation whose survival is critical to determining the function of both private and public health care in Ireland.

In opposition, health spokesman Reilly espoused a fundamental and far-reaching reform of the health service, a reform which would have transformed the funding model of the existing public system. In summary, rather than public hospitals receiving a fixed pre-determined sum of money from general exchequer revenues, they would instead be reimbursed by health insurance companies for what they actually do.

In the Fine Gael model, such insurance would be mandatory and socially subsidised by the better off, and the insurance companies would be private (the so-called Dutch Model). The programme for coalition government with Labour contained a compromise wherein the health insurance market would contain a mixture of public and private companies, the system which applies in Germany ("Deutsch Model"). This approach has been hugely successful in Germany and the other countries that use it, giving them health outcomes that are vastly superior to systems like the UK's which continue to rely on the tax/budget model.

Insurance-based health care tends to minimise waiting times, increase efficiency and can iron out inequality, but is somewhat more expensive, thus making Irish health system reform unacceptable to the

Troika, Frau Merkel and the German Hairdressers. Possibly in response to this, Dr Reilly announced --somewhat presumptuously -- that he will implement it in a second Dail term after the government is re-elected, concentrating for the present on reforming GP care and on addressing inefficiencies in the system.

To this end, he has instituted a "special delivery unit" which has been charged with the task of reducing emergency waiting times by increasing efficiency, and he has replaced the board of the HSE. He has also proceeded with plans to rationalise emergency services, in the process being forced to go back on commitments made to maintain Roscommon Hospital's A&E department.

He has repeatedly and correctly pointed out that it is unacceptable that some hospital specialists are making huge fees from the VHI (of which he is the sole shareholder) without admitting that the reason why this occurs is because the policy of successive governments has been to keep specialist numbers low -- not to save salary, which is a small component of health costs, but to keep consultant-provided activity low and waiting lists long. Patients on waiting lists cost nothing.

I respectfully believe that this decision to delay reform was an error. The cardinal sin in a recession is not spending money, it is wasting money. Our wasteful inefficient system is crying out for fundamental reform now, and no amount of bureaucratic tinkering around the edges will deal with the fundamental problems. The recent announcement that Tallaght Hospital will close 10 per cent of its beds in order to stay in budget speaks eloquently to the faults of the current system.

The minister took criticism last week over his decision to increase the levy charged on health insurance. Much of this criticism is unfair. VHI was set up to act as a monopoly provider of semi-socialised health insurance for people who had the inclination and the financial wherewithal to make an additional contribution to the cost of their health care above and beyond that which they paid in tax. Its funding model, in which obligations to older members are met by the premia of healthy new ones, becomes as sustainable as a Ponzi scheme when new companies which are unencumbered with legacy obligations to existing members begin to siphon off new customers.

Seen in this context, his decision to increase the levy is understandable and was necessary.

My major worry after his first 10 months in office is that he might be taken hostage by the people who actually run our health system -- the Health Administrator-Civil Service Complex, who believe that health policy is a constant struggle between greedy doctors, lazy nurses, benighted local hospital activists, trade unions and unrealistic patients.

They never acknowledge that the most powerful vested interest is themselves. Dr Reilly's proposed but now-postponed reforms would reduce their vice-like death grip on the levers of power. They will resist it.

He needs to resist them.

Senator John Crown is a consultant oncologist

Sunday Independent