Alex White (Dublin South, Labour) | Oireachtas source

The maintenance of health services is a priority in 2013 for the Government, despite the need for significant and difficult financial savings in the health area. In the context of the very difficult financial circumstances in which the State has found itself in recent years, it is the Government?s intention that front line health services would be protected to the greatest extent possible.

As part of budget 2013, over ¤13.6 billion in current funding has been made available to the Health Service Executive for the provision of services. This amount represented an increase of ¤150 million over and above the original expenditure targets for 2013.

However, despite the extra funding provided, just over ¤750 million in savings have to be made during 2013. This represents a major challenge for the health services. The budget strategy has been to achieve savings through efficiencies and re-organisation under the public service agreement, curtailing the growing cost of pharmaceuticals and increasing income generation. The aim of this budgetary strategy is, as far as possible, to cut the cost of services and not the services themselves.

For example, we have focused on reducing the cost of the State?s drugs bill. Key actions that are being taken to achieve this include the following: the Health (Pricing and Supply of Medical Goods) Bill 2012 is currently before the Dáil, which will introduce a system of reference pricing and generic substitution for prescribed drugs and medicines; the HSE has established a clinician?led, multi?disciplinary medicines management programme, which will bring forward a series of measures to promote more cost-effective prescribing practices by GPs and consultants; and pricing deals have been agreed with the Irish Pharmaceutical Healthcare Association, IPHA, and the Association of Pharmaceutical Manufacturers in Ireland, APMI, which are estimated to generate combined gross savings in excess of ¤120 million in 2013.

For the health sector as a whole, budget 2013 set out a wide range of savings that were required, which are made up of the following: a ¤323 million reduction in the cost of primary care schemes; ¤308 million pay-related savings; ¤65 million in increased generation of income by public hospitals; ¤60 million in net savings on the Department?s Vote; ¤20 million savings on procurement; and ¤5 million in other savings. Nonetheless, the achievement of ¤781 million in savings in 2013 remains difficult. The majority of savings have been designed not to impact on front line activity. However, we have previously acknowledged that it has been necessary to take a number of difficult measures in order to ensure that the most vulnerable are protected.

The General Medical Service, GMS, scheme is comprised of the GP service and prescription drugs, as well as some other services, where such services are provided to holders of medical cards or GP-visit cards. Over recent years, there has been a significant expansion in the GMS scheme. At the end of 2007, there were 1.28 million medical cards. By the end of 2012, there were 1.85 million medical cards in circulation. This represents an increase of almost 600,000 cards, or about 45%, over a five-year period.

The total cost of the GMS scheme is about ¤2 billion per year. At the end of 2012, there were approximately 1,986,000 qualifying people under the GMS. Medical cards make up the majority of this number, amounting to about 93% of the total.

Medical cards for persons aged 70 years and over account for about 360,000 individuals or about 20% of all medical cards. The total cost of services provided to over-70s medical cardholders is approximately ¤750 million per year, which represents about 38% of the total cost of the GMS scheme.

Under the Health Act 2008, special eligibility rules applying to persons aged over 70 years were put in place, which are more generous than those applying to the standard means-tested medical cards. Under the 2008 framework, a single person over 70 with a gross income of up to ¤700 per week, equivalent to about ¤36,000 per year, qualifies for a medical card. A couple over 70 with a gross income of up to ¤1,400 per week, equivalent to about ¤72,000 per annum, also qualify for a medical card.

It is estimated that there are approximately 370,000 people aged over 70 in the State. Given that there are currently about 360,000 medical cards issued to people aged over 70, medical card coverage of the over-70s population is about 97%. By comparison, the medical card coverage of the under-70s population is about 35%.

Last December, as part of budget 2013, two inter-related changes to the over-70s eligibility arrangements were announced to deliver ¤12 million in savings during 2013 from the ¤750 million expenditure on over-70s medical cards. First, the income limit for an over-70s medical card is to be reduced.

Second, people who no longer qualify for a medical card will continue to receive a free GP service. In addition, they will qualify under the drugs payment scheme, DPS, to have some of the cost of their prescription drugs met by the HSE.

More specifically, the income limit for an over-70s medical card is to be reduced to ¤600 per week, equivalent to approximately ¤31,000 per year, for a single person. For a couple, the income limit for the over-70s medical card is to be reduced to ¤1,200 per week, equivalent to gross income of approximately ¤62,000 per year.

As I stated, those who no longer qualify for an over-70s medical card will qualify for an over-70s GP visit card. A single person over 70 with a gross income of up to ¤700 per week, equivalent to approximately ¤36,000 per year, continues to qualify for unlimited GP care. A couple over 70 years old with a gross income of up to ¤1,400 per week, equivalent to approximately ¤72,000 per year, also continue to qualify for unlimited free GP care. In addition, under the DPS, the HSE will meet the prescription drug costs of these people in excess of the DPS threshold of ¤144 per month.

It is estimated that approximately 20,000 people will have their medical card replaced with a GP visit card under the new income rules. Therefore, it is important to note that approximately 95% of the over-70s population will not be affected by the new rules. A total of 92% of the over-70s population that have already qualified for a medical card will continue to have a medical card. The 3% of over-70s who did not qualify heretofore for a medical card will continue not to have either a medical card or a GP visit card. The 5% of over-70s who did qualify for a medical card will now qualify for a GP visit card instead.

The new legislation is very focused and narrow in that it is only meant to affect a small proportion of people aged over 70, namely, single individuals earning more than ¤31,000 per year and couples earning more than ¤62,000 per year. Again, it is important to reiterate, to avoid any confusion, that approximately 95% of the over-70s population will not be affected by the new rules. I do not seek to minimise the effect of the changes on the small minority of persons affected by the new income rules. However, they will continue to receive free GP care and their expenditure on prescription drugs will be capped under the DPS. As a result, these new arrangements will limit the expenditure on prescription drugs of an individual earning ¤600 per week or a couple earning ¤1,200 per week to less than ¤34 per week.

The Civil Partnership and Certain Rights and Obligations of Cohabitants Act was enacted in 2010 to introduce certain rights and obligations for civil partners and cohabitants. It is important that these rights and obligations are also reflected in the legislation relating to over-70s medical cards and the new over-70s GP visit cards. The necessary amendments to achieve this are also included in the Bill to ensure spouses, civil partners and cohabitants are treated in a similar manner.

A primary objective of public service reform is to integrate services with a view to providing better service to citizens and greater efficiency for the State. Inter-agency co-operation among public bodies at national and local level is one of the key pillars to the achievement of the objective. The legislation will facilitate the exchange of personal data between the HSE and the Revenue Commissioners and the Department of Social Protection with a view to ensuring public services are delivered as efficiently as possible to those who have an entitlement to such services.

One of our intentions under the new over-70s arrangements was to avoid having to unnecessarily contact as many over-70s individuals as possible or to limit the number of over-70s we were required to contact. Contacting all over-70s would be a very wasteful and time-consuming task, as well as disturbing for the individuals themselves, especially given that 95% of the over-70s population are unaffected by the new rules. One of the benefits of greater co-operation between the HSE and the Revenue Commissioners is that the HSE will be able to prioritise contacts with higher income over-70s medical cardholders.

However, the exchange of personal information is more general than just the changes to the over-70s arrangements. The prevention of fraud and abuse of the health service is an important element of the work of the HSE, even more so in a time of severely limited resources. One of the most effective and efficient ways of targeting cases for review is to electronically match data from other relevant Departments and public bodies against the HSE?s computer systems. The purpose of that is to identify people who may be holding a medical card to which they are not entitled.

It is very important to be clear that in carrying out such data exchange exercises under these provisions, the HSE is obliged to comply with its responsibilities to protect the rights and privacy of individuals in accordance with the Data Protection Acts 1988 and 2003. The rights and privacy of individuals continue to have the protection of the Data Protection Acts, even in the event of the Bill being enacted. The Office of the Data Protection Commissioner has made clear that a public organisation such as the HSE that collects, stores, or processes any personal data must obtain and process the information fairly; keep it only for one or more specified, explicit and lawful purposes; use and disclose it only in ways compatible with these purposes; keep it safe and secure; keep it accurate, complete and up to date; ensure it is adequate, relevant, and not excessive; retain it for no longer than is necessary for the purpose or purposes; and give a copy of his or her personal data to an individual, on request. Therefore, the proposed data exchange provisions and the data exchange agreements they allow build on the existing data protection framework. They are entirely in line with the existing data protection framework. In addition, the proposals were developed by the Department in full consultation with the Office of the Data Protection Commissioner.
It is a Government priority during 2013 that health services are to be maintained despite the need for significant and difficult financial savings in the health area. The majority of savings have been designed not to impact on front-line activity. However, it has been necessary to take a number of difficult but targeted measures, such as this proposal, to ensure the most vulnerable continue to be protected. I commend the Bill to the Seanad and look forward to hearing the views of the Senators.