Dr. Josep Figueras:

Yes, I will speak briefly on those matters. I remember a Minister, whose name I will not mention, who once told me over dinner that he managed the treasury and increased taxes but he could not get any of the additional revenue. He had been very successful but all the extra taxes were used to finance the deficit and none of the revenue went into health care. I totally agree with the Deputy who put it very nicely in stating that the population is happy and accepts it when extra taxes are earmarked for health care. This is a very good idea and a palatable and acceptable approach. However, as I stated, if one is successful, the Minister for Finance will ask why one wants more funding. If one is successful, achieves high elasticity and people have stopped smoking, one may jeopardise funding. One has to be cautious in this regard.

One must also be careful about what are known as sinful taxes. We learned a great deal about the "fat" taxes introduced in Denmark. If members wish, I could spend five minutes explaining the position. One must target these taxes very well and be cautious about harmful alternatives. If, for example, people switch to sugar when fat is taxed, what is the point of a fat tax? Second, there is no point introducing taxes on sugar if one does not subsidise healthy food, which we know is expensive. The issue, therefore, is how one tailors measures to make a difference. It is not just about the treasury introducing a 10 cent tax on Coca Cola or Fanta. I apologise for using brand names, although it will not make a difference as Coca Cola does not like me in any case. I am referring to fizzy drinks in general.

We know that Ireland faces serious challenges with childhood obesity. Malta has a similar problem. We need to deal with vending machines and fizzy drinks because they are not okay. If members wish to prioritise, as parliamentarians and politicians, they should be strong and act on these issues, advertising and so forth. That would be value for money. As I stated, I have a large volume of material on this issue and I will send a copy to the committee. The figures on how much can be achieved through these types of interventions are impressive.

If one earmarks funding, one may get into trouble but it is more palatable and acceptable. All in all, I would choose to earmark taxes as much as possible.

I was asked a question on payment for performance. We are working with the French social insurance system. In principle, payment for performance is the way to go because one wants to pay according to outcome. However, it is terribly difficult to achieve. Ireland could do a little bit more in this area. I can relate this to deprivation payments in primary care. I believe Ireland has scope to adjust the capitation a little bit better in relation to age, some diseases and deprivation. I will return to the issue of chronic diseases but I totally agree with the view expressed on deprivation. Clearly, one wants doctors to work in certain poorer areas and geographical areas with greater deprivation. I am also in favour of adjusting payments as much as possible to risk or outcomes.

Economists, of which I am one, love this idea. One has this wonderful formula of paying for outcomes but it just does not work that way. One must be very cautious. While increasing the percentage of payment by outcomes is a great idea, there is a ceiling. We are examining this issue for the third time in France and we have realised the importance of having transparency for the profession and providers. We want them to know we are paying attention and we will tell them we will link payment to performance but one should not go beyond a figure of 10% or 15%. Payment should be adjusted for risks and one should also pay some adjusted capitation for services and outcomes. However, this should not be done on a case-by-case basis because we do not have enough good data to say what are good outcomes and to measure and pay by outcomes.

Professor Allyson Pollock probably spoke about payment by outcomes in the United Kingdom. The UK decided to pay by outcomes and succeeded in doing so but this resulted in significant inflationary pressure. What does one do when this happens? If one wants to pay by outcomes, the way to go about it is to shift the target. This means one does not say what one will do from one year to the next and one can change outcomes in different years. Hopefully, if one stops paying for outcome A in one year and starts paying for outcome B, the service providers will still work well in achieving outcome A. If not, one would be missing the point by not hitting the target because the provider would do very well in respect of the outcomes for which payment is being made but would do well in respect of other outcomes. One cannot pay for every single outcome. This issue is very nuanced.

Another advantage of paying by performance is that it involves transparency and allows data to be collected. By virtue of observing professionals, they become more cautious and work better. That is my view of the issue expressed in a simplistic way.

I was asked a question on the 49% figure. I will show another figure on the United States which is as interesting as the 49% figure. Unfortunately for us, I have more data on this. This is the wrong way to look at this issue. It is taken from a study carried out by a very influential Institute of Medicine in 2012, which tells us how much waste is in the system and tries to reflect on this issue. The study found that 27% of services were unnecessary. I referred already to the figure of 50%. The position in Ireland would be different because incentives here are different.

A total of 70% is inefficiencies. It is not that the services are not effective but they are provided inefficiently. Here it is about how it is provided at hospital level or at community level. More and more we want to move the concept of hospital from a vertical structure to a horizontal structure together with units working together across levels of care rather than being totally integrated. It is about severity hospitals rather than specialties.

If you were to go in the direction of insurance competition, like in the US, you have the problem with 24 excess and administrative costs, which is almost as much as unnecessary services. There are inflated prices and prevention failures. The Chairman asked whether the 40% is about perverse incentives. I have to be cautious and everything should be taken with a pinch of salt. There may be some inefficiencies in the way private health insurers are paid and the way they bypass the lists and so on. I do not know how they are costed in detail. Sometimes in other countries there is a hidden cross-subsidy when private patients are treated in public hospitals. I do not know whether that is the case in Ireland. That may be inefficient and a perverse incentive, as economists describe it. The 40% is not a criticism of the profession and it is a genuine uncertainty. Sometimes the system does not reward the professionals to save and to ignore these incentives. For instance, I have the privilege to facilitate research into antibiotic resistance. Doctors know they should not prescribe as many antibiotics. There is huge scope for savings but, not only that, for quality. Antibiotic resistance is a threat to our society. If the Chairman wants a priority for this committee, he should adopt this. I do not have data for the difference in prescribing antibiotic among doctors but I could look at my computer because we did a study for the Dutch Presidency on that subject. The difference is massive. It is sixfold between the Dutch and, say, the Italian and Spanish doctors, partly because of the pressure from patients to have an antibiotic. If they have an antibiotic for a cold, that is a bad job. It is not about blaming the doctors for this uncertainty; it is about giving them the mechanisms, evidence and ways to change. In the case of antibiotic resistance, there have to be campaigns to work with citizens and say, "More drugs after you see a doctor is not better care".