John Crown (Independent) | Oireachtas source

I have a couple of quick points. People really need to think through the full implications of what will happen if we have universal health insurance. In the first instance, it will be compulsory and people will have to pay for it. It is that simple. It will be like tax, it will be the law. If it is not done that way it will not work at all. The necessary corollary is that tax should go down by the amount one is paying for health insurance. On a level playing field, if everybody is paying an 8% fixed contribution to a health insurance plan, they should pay 8% less tax. It is that simple. That is the way it will work. That gives a pot of money which is available to the insurers which gives them, acting on behalf of their members - and I would like to see a mixture of profit and not-for-profit insurers, but I hope mainly the latter - not their customers, tremendous negotiating power with the people who deliver health care.

In partial answer to what Deputy Kelleher said, one of the issues is that one cannot have a completely free market in this respect for a couple of reasons. Number one, people ultimately do not make the choice for the operation or treatment they have. Somebody else makes it for them, and that person often gets paid if they do it. That is a concept in health economics called "supplier-induced demand". There are ways of combating that and policing it in a properly efficient and competitive market.

The same thing goes for hospitals. If a new private hospital opens in an area where there are lots of privately insured people, it sees gaps in the market which it tries to exploit. I am not saying "exploit" in any kind of pejorative sense, but it does tend to increase the demand for services. There will need to be a system of registering, licensing and approving any new health care facility, even in any new dispensation which is based entirely on universal health insurance.

There is a real risk that we are in a tremendously vulnerable interim phase right now. We are all looking at this nirvana over the hill, after our 40 years wandering through the desert, of universal health insurance with a truly liberated system based on the principles of equity and efficiency. It is one which will have many sullen, resentful, recently unemployed health bureaucrats and civil servants shuffling around wondering what their next job will be. However, while we are on our way to that promised land, we will have a situation where the market is very unstable because people do not have a compulsion to take insurance. They are not likely to use the health system because they are young and healthy so why, in recessionary times when they are having trouble meeting their other bills, should they start paying for health insurance? That is the problem.

The Minister has stated - sadly, in my opinion - that he will not introduce the reform until after the next election. As I have said here before, that is a bit like looking at one's new bride at the church altar and saying "I promise I'll be faithful to you after the first five years of marriage". It is something we need to do now because all the things we are trying to do before that are basically putting palliative Band-Aids across a great big gaping malignant wound that we need to fix with the radical surgery of reform in introducing uniform health insurance. When we introduce it, three things must be borne in mind. If it follows the vision we hope it does, it will be very equitable. Everybody will be able to take their negotiable insurance instrument to any hospital in the country. There will be no concept that some hospitals are only open to some people, or that some doctors will only be available to some people. Everybody will go at the same level, so it will increase equity. It will also hugely increase efficiency because the current system incentivises inefficiency in the public - and to a lesser extent in our private - system. It will cost more, however, and there is no getting away from that.

The Beveridge model of general taxation-derived, central command and control, bureaucratised health care, à la the British national health service, is brilliant for containing costs. It is not bad for equity, either, but it is terrible for access. That is why the countries that follow that model always have the longest waiting lists in the world. They are always the ones that have decreased access to cancer drugs and, as we are now seeing from statistics - generated both in my own research unit and the Karolinska Institute - they have inferior cancer outcomes.

My questions are twofold, one general one and one specific one which I asked in a different context earlier this morning. Do the witnesses think that enough attention is being paid to whether we have the skill set in our hospitals to manage this big change? Do the people who are currently working as administrators in our hospitals - and are used to being given a cheque at the beginning of the year and told to make it last until New Year's Eve - have the skills to be able to work in a different environment? In the latter environment, instead of their normal instinct to turn patients away when times get rough, their instinct will have to change to working out how they can attract more patients. I am not sure we have that.

I wish to raise a small, technical issue with the witnesses collectively. On multiple occasions in recent years - and sadly it will become more pressing in our new health and pharmaco-economic dispensation, which I must say I would resist with every fibre in my body - I have had experience of some of the smaller insurers declining the use of a drug saying that the VHI is not paying for it. Could somebody please explain to me why that is not a cartel, if somebody says: "The VHI is not going to pay for it, so we're not"? About 15 years ago, when doctors signed up to taking lower fees in return for patients not getting balanced billing, our consultants' association office was raided at dawn by whatever the local equivalent of Eliot Ness was from the Competition Authority. I would like to know why is this kind of behaviour not a cartel.