Mary Harney (Dublin Mid West, Progressive Democrats)

I do not have a script. Notwithstanding these savings, health spending next year will increase by 4.1%. To put that in context, in 1987-88 health spending was reduced by 3.5% when the country faced similar significant economic challenges. There will be an increase next year of approximately 4.1% year on year. Notwithstanding that increase, a cut of €700 million had to be identified in planned services for next year. There is no low-lying fruit in the health area and no easy pickings. There are many areas that had to be thoroughly addressed and one such area was the cost of the medical card scheme.

When the medical card scheme for the over 70s was introduced in 2001 it was estimated that it would cost €15 million per year, and in 2008 it will cost €245 million. Many people in their 60s earn incomes of approximately €300 per week. We have changed eligibility requirements to take account of disposable income for all medical card schemes. Generally, people in their 60s do not have to pay rent or mortgages. They have paid their mortgages, their children have been catered for and they do not have travel costs associated with work. Generally, their gross income and their disposable income are similar. For example, a couple aged 68 years on an income of €300 or above per week do not qualify for a full medical card. However, with the over 70s scheme, someone on reaching the age of 70 years automatically qualified regardless of circumstances. Many people criticised that scheme. Last December, the Fine Gael spokesperson on health said that a means test should be introduced for that scheme. Many people have examined this scheme and taken the view that, given all the circumstances and the pressures of medical expenses, a free scheme for any group of people regardless of income cannot be justified.

The cost of the over 70s medical card scheme is rising by approximately 7% per year because of the numbers involved, whereas the cost of medical cards in the general medical services scheme is rising by approximately 2% to 3% per year. The Government made a decision in the budget to end the automatic entitlement. Among the complications with the over 70s scheme were that a capitation fee of €640 per patient was agreed with the Irish Medical Organisation in 2001. That scheme was introduced by legislation as was the contract under which doctors operated the scheme. The only way to change the capitation fee, other than by agreement, is to change the legislation and the automatic entitlement. It was grossly unfair to have a capitation fee of €640 for doctors to treat people who are generally better off and a capitation fee of €161 for doctors to treat people who get a medical card based on means in the most disadvantaged areas. The €640 fee was virtually four times the fee for a doctor who treated a patient over 70 who was in receipt of a card based on means.

Of the 350,000 people aged 70 or more in Ireland, 215,000 receive the medical card based on means and 140,000 receive the card as a result of reaching the age of 70. There was a huge anomaly in the manner in which doctors were treated. After some reflection, the Government felt it was not in a position to negotiate under Irish and European competition law with the IMO or the IPU. As a result of consultation, we established a group, chaired by Mr. Eddie Sullivan, a former Secretary General of the Department of Finance who retired about 18 months ago. The group made a recommendation to the Cabinet and we agreed to pay a single capitation fee of €290 in respect of all patients over 70. That is right, given the circumstances. It ends the perverse disincentive for doctors working in areas of high disadvantage. From anecdotal evidence provided by doctors who approached me before and after the decision was made, it has been well received in those disadvantaged areas.

The Government estimates that €100 million will be saved as a result of this decision, which must be achieved during 2009. The new standardised capitation fee will bring in €16 million and a further €20 million will come from the 20,000 people who will not qualify under the new income criteria, which is €700 per week for a single person and €1,400 per week for a married couple. The CSO has provided new statistics from the EU-SILC, which is a household survey. We estimate that there are no more than 5% of people over 70 who have incomes in that bracket as the average earnings of people over 70 in Ireland is €260 per week. Therefore, the threshold is almost three times the average earnings of a single person in that population group.

The issue that arises is how best to use scarce resources. In Ireland, access to doctors is available free of charge to one third of the population. That population also receives medication free of charge and does not have to pay the in-hospital charge, which is being increased from €66 per day, capped at ten days per year to €75 per day. All other citizens pay for access to doctors and pay for their medication to a limit of €100 per family per month. That comes to €1,200 per year per family, which includes families of four, five or whatever. I do not believe that such an outgoing is unreasonable in the circumstances in which we find ourselves.

When this scheme was introduced, capitation fees to doctors cost about €203 million per year. In 2007, that had grown to €431 million. The cost of drugs was €434 million for the GMS, but that had risen to over €1 billion in 2007. Next year, the cost of both fees will rise by about 14%. We have increasing levels of unemployment and we must provide medical cards for those at the bottom of our society. One would love to do more as far as medical cards are concerned. I mentioned earlier that a couple in their late 60s earning over €300 per week do not have access to a medical card. Many people would say that is a low level of income, which it is, and one would love to do more. Since I became Minister for Health and Children, we moved to disposable income and increased the income threshold by 29%. That particularly helps young couples with children, those in employment and those with child care costs, rental or mortgage payments, travel costs and so on. We also introduced the doctor-only medical card, which has a 50% increased income threshold on top of the threshold for a full medical card. Approximately 80,000 people have that card, but the number is increasing reasonably rapidly with the rising level of unemployment.

Given all the circumstances, the decision made was fair. I have many quotations on this issue, including a quotation last December by the Fine Gael spokesman on health who said that a means test should be introduced. Notwithstanding that, people seem to change their position in the light of changing circumstances, even if it is just a few months later. I genuinely believe that regardless of who is Minister for Health and Children, the automatic entitlement to benefits such as medical cards regardless of income cannot be justified. Somebody like me should not be entitled to a medical card when somebody much less well-off just under the age of 70 cannot qualify. A society that does that is not a fair society and does not target resources to those who need them most.

There is no evidence to suggest that the introduction of the medical card has had a beneficial effect on access to hospitals for people in that age group. The average attendance at doctors' surgeries by people in that age group is four to five times per year. The reality is that many people who are better off tend to look after their health better. If we are to target resources to those who need the health service most, it must be at chronic illness management, which affects people in their 50s and 60s as well as those over 70. These are challenges which confront the Government and must be addressed in any contract of employment in the general medical service. Moving services from an acute hospital environment to a primary care environment means treating chronic illness in the community as part of primary care. The health transformation programme is a priority for the new reform which Professor Drumm and his team at the HSE are overseeing.