Bernard Durkan (Kildare North, Fine Gael)
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Question 51: To ask the Minister for Health and Children the comparisons she has made between the costs of running similar services in the public and private hospital sectors; the degree to which differences have emerged in the value of health insurance claims made by patients in respect of each of these sectors; and if she will make a statement on the matter. [10546/10]

Mary Harney (Dublin Mid West, Independent)
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As Minister, I am concerned to see that health care is provided in a way that is affordable and sustainable for the country as a whole and, most of all, that the resources we devote to health achieve the best possible outcomes for patients and the best health status for the population. I do not have a role in the day-to-day operation of either private hospitals or private health insurance providers, nor should I. The negotiation of fees between private hospitals and health insurance providers is a commercial matter for the parties themselves. It is not possible, therefore, for me to make direct comparisons of the type suggested.

It may be useful to note that the Department of Health and Children is currently undertaking a value for money and policy review of the economic cost and charges associated with private and semi-private treatment services in public hospitals. The review seeks to determine the extent of the gap between current charges and actual costs in public hospitals. The review does not seek to compare costs between similar services in the public and private hospital sectors, since it is not considered that this should be the key consideration in setting the level of charge in public hospitals.

It is also the case that the National Treatment Purchase Fund negotiates treatment prices with private and, to a limited degree, public hospitals. The Comptroller and Auditor General's report for 2008 examined the NTPF's arrangements for the procurement of treatment. It concluded that, relative to the casemix benchmark, procedures purchased from private hospitals by the NTPF generally cost less than those carried out in the publicly funded hospital system. However, for reasons of commercial confidentiality, the actual prices payable have not been disclosed publicly.

Where the HSE decides to purchase an element of service from the private sector, the executive satisfies itself that the price paid compares favourably with known costs in the public hospital system. Such arrangements are also of course subject to the normal rules on public procurement.

James Reilly (Dublin North, Fine Gael)
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I take issue with the Minister when she says she should not have a role. There is a role for the Oireachtas and for someone within the public service in controlling the costs of medicines, medication and medical procedures. This should not be left to commerce, of itself. In view of the VHI monopoly there has been a failure to drive down the cost of medical care.

While it may be difficult to get information in the hospitals sector, a report by PA Consulting found that in the community sector private home care can be got for €21 per hour while public care costs €28. This is because the HSE pays €18 per hour and clients are charged €12. How can this be and what does the Minister intend to do about it? Will she take an initiative to drive down the cost of medical care?

Why do we have such medical inflation when drugs such as proton pump inhibitors, which suppress acid secretion in the stomach, have been developed? Years ago, people had major gastric surgery for this problem but this is no longer the case. We should be making savings. It is not all one-way traffic and it should not be.

Mary Harney (Dublin Mid West, Independent)
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We have been driving down costs. This year we will take €240 million out of the drugs cost, for example, by changing the manner in which pharmacists are paid and what we pay producers of medication which goes off patent. The nursing homes support scheme, A Fair Deal, is a good example of saving. The NTPF was asked to procure beds because it has a good track record in procuring services and getting value for money.

The HSE uses private providers of home-care packages. I support that although I am often criticised for it. If the money can go further and provide more services to people at home and if the quality of the service is assured, that is what we should be concerned about. I want to see more of that.

It is not appropriate for me, and it is against the law, to get involved in price negotiations with hospitals on behalf of insurers. I want to see insurers driving down their costs. The costs of some medical procedures are driven, to a large extent, by salary levels. On the public side, we must move to economic costing. The taxpayers cannot subsidise the cost of care for some while it is not accessible to others. The review currently being carried out is looking at whether public hospitals should move to procedure-based costing. In private hospitals the insurers negotiate a price for a procedure. In public hospitals it is based on the number of bed nights per patient. We need to bring greater clarity to this matter. The allocations group's report will greatly help us gain insights in this area.

Jan O'Sullivan (Limerick East, Labour)
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It must be said that in some cases public provision is cheaper, is of better quality and gives better value than private. The traffic is not all in one way.

I believe progress has been made in patient-level costings, whereby insurance companies pay an agreed cost for a procedure rather than for a bed. I understand the HSE looked at the German system and I would be interested to know if we are to progress to that kind of system, which would facilitate moving towards a "money follows the patient" model. We are all interested in moving towards that kind of universal system, in which one pays for what is done rather than paying lump sums to hospitals simply because they happen to exist.

Mary Harney (Dublin Mid West, Independent)
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International evidence supports the opposite. Payment per procedure costs much more than the other method.

Jan O'Sullivan (Limerick East, Labour)
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I am talking about a payment model.

Mary Harney (Dublin Mid West, Independent)
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Doctors who work out of hours are paid a fee per item or per patient. In the Republic that cost €108 million and in Northern Ireland, for the same number of people, the cost was £18 million. We must be very careful how we allocate resources. That is why we appointed a group of experts to advise in this area. This is important, particularly when resources are limited.

Public hospitals are paid by insurers on the basis of a bed charge per night. Doctors are paid separately. They are paid for every private patient who comes into the hospital, regardless of which bed the patient occupies. The hospital is paid only for the designated beds. Many issues arise in this regard.

We must drive down costs. I share Deputy O'Sullivan's view that many long-term patients in the public system have much higher levels of dependency and are more complex cases. We must be sure we are comparing like with like. A patient who requires more nursing care and support will cost more than one who does not require the same level of care. When we compare costs we must be fair in the comparisons we make.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Minister mentioned the NTPF. How does it assess value for money of procedures accessed in private facilities? The Minister has given approval to 1,000 bed cuts in acute hospitals by the HSE in 2010. Will this not result in more people seeking access to specific procedures through the NTPF? If we are to close public beds in public hospitals we cannot cater for the normal throughput in those hospitals and people will be on longer waiting lists for specific procedures. This will place a greater strain on the NTPF and an additional cost on the taxpayers who fund it.

There have been recent reports that consultants are not adhering to the agreement to do 20% private work and 80% public. In some cases it is reported that consultants are doing 100% private work and are in clear breach of their contract. What monitoring is in place and what measures will the Minister take to ensure compliance by these consultants with their contracts?

David Stanton (Cork East, Fine Gael)
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On a point of order, how much time is allocated to each question?

Brendan Howlin (Wexford, Labour)
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Six minutes. We have spent nine minutes on this question and I stand admonished by the Deputy.

Mary Harney (Dublin Mid West, Independent)
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With regard to Deputy Ó Caoláin's last question, we now have key performance indicators which measure the number of new out-patients seen by consultants and the public/private mix. There are procedures under the contract for enforcing the agreement. That is under way.

The Comptroller and Auditor General, in his report, measured the prices paid by the NTPF against the casemix benchmark and the comparison is favourable. The fund does incredibly well.