Mr. Donal Clancy:

I would like to address a few different issues regarding the cost initiatives. Laya Healthcare has been in the vanguard of trying to get market prices correct. For example, we conduct extensive clinical audits and utilisation reviews and, throughout the market, we have instigated discharge policies and scrutinised length of stay. We have zero tolerance of fraud or anything in that range and we carry out prepayment audits. We ask our customers before we pay whether they got the service they were supposed to. We have been doing this for years from our BUPA days and we continue to do so. That is fundamental to our thinking.

With regard to current cost initiatives, I agree with Mr. McLoughlin regarding the tenor of what is happening. We are looking at the settings across the market. For example, is a treatment being done appropriately? Should it be done in the GP's surgery instead of the accident and emergency department or should it be done as an outpatient case instead of a day case or as a day case instead of as an inpatient case? We are again back to malpractice and fraud and what is going on in the market needs to be continuously investigated and examined, as one would have to do with any system. We must also consider admissions procedures and why and when people are admitted and examined, for example, how long people are sitting around on a hospital bed for a procedure, which means we are back to length of stay and everything that goes with that.

We have alluded to high cost drugs. The cost of many of them is too high, although I acknowledge that a great deal of good work has been done in recent times in this regard. However, we want to get to the bottom of this.

We then get into the area of care pathways. We fundamentally believe that much of what we pay for currently should not be paid for on a length of stay basis or at a per diem rate; it should be done by a care pathway. I do not wish to pick on a particular service but, for example, in the psychiatric arena, a patient should be treated in a programme which has a defined care pathway and which gives the patient a reasonable prospect of concluding his or her illness and receiving the episode of care he or she requires. That needs to be an international standard and a recognised way of implementing treatment.

With regard to utilisation reviews, we are in the vanguard going through this with each of the providers in conjunction with them and with their co-operation. We are not alone in doing this. They work constructively with us in the main.

Reference was made to costs and negotiation and what insurers can do but I would like to highlight that we cannot do a blessed thing about up to 40% of our charges other than through utilisation reviews. In the public system, we do not have an option. The rate is set by statute. We would like the option of negotiating these charges.

A member asked about network products. For many elective surgeries, one should be able to pick out who can deliver the right care pathway and service and that should be done in both the public and private health systems in order that the benefit to the consumer is the correct benefit and ideal for their best outcome. That is what network products will provide and the option of going from one hospital to another. It would, therefore, drive further cost initiatives-----