Sean Barrett (Independent) | Oireachtas source

I welcome the Minister as always. He has the hardest job in public life and Senator John Crown and I try to help him in any way we can. However, Senator John Crown is away. We strongly support the Minister's efforts to counteract tobacco use and wish him well in that regard. The G8 chose dementia as its topic of consultation and perhaps we might have a debate on it in the new year. Reference was made to physiotherapy for the mind. The Minister, as a medical professional, is much better positioned to debate that issue than I am.

The problem we face was graphically illustrated by the Minister for Finance two hours ago. Health insurance costs have increased by 86% in four years, which is why he had to reduce tax relief in this regard. He said it was costing €500 million annually and rapidly heading towards €1 billion. I support everything the Minister for Health said about the need for cost containment and I am delighted he appointed Mr. Pat McLoughlin. We might debate the substance of his report also in the new year because what he has attempted to do is important. We cannot bear the rate at which costs are increasing. According to a most useful document the Department produces, approximately 11% of gross national income is spent on health care and the only country in which the figure is substantially in excess of this is the United States. We have a high cost problem which is reflected in the cost of health insurance.

I downloaded a document from the website of the Congressional Budget Office in the United States entitled, "Is This Time Different? The Slowdown in Healthcare Spending". We are at a figure of 86% and in the United States which we always thought had the high cost model a slowdown is being discussed.

Another paper from the Congressional Budget Office is entitled "Why has Growth in Spending for Fee-for-service Medicare Slowed?" I never believed in the old medical inflation cliché. The cliché seems to be coming to an end in the United States. How did we end up with the 86% increase the Minister for Finance, Deputy Noonan, told us about?

I support what the Minister said in his speech. I ask people to switch. Locking oneself into a high cost system and then requiring bailout by the taxpayer is counterproductive from everyone's point of view. People, including the old, should switch. Some of the competing companies will say that they never refuse to recruit older people. It was a mythology invented so that the State could back up its insurance company, VHI, because it has most of the old people. Competing companies say they never refused customers so I wonder why old people have not switched. A new entrant could then generate some of the efficiencies on drugs spoken about by Senator Colm Burke. This is contained in the Milliman report.

A new entrant can insure old people and young people for less than the previous monopolist in the field. When the Milliman report looked at the dominant health insurance company, it saw major efficiency possibilities. One of them is addressed in page 31, which lists the average length of stay for medical inpatient admissions. It is 3.7 days by world standards and 10.6 days in Ireland. Throughout the report, the finding is that not enough has been invested in utilisation management and investing in ways to manage claims that can yield savings, regardless of the risk profile of the population. It refers to unnecessary medication and the extra days spent in hospital.

The amendment I tabled to the Finance Bill, when we discussed the tax break, concerned whether HIQA might do this job for the Minister. The Minister mentioned the diagnostic related group, DRG, but HIQA could say its estimate is that a procedure should have been done in 3.7 days, not 10.6 days. A crucial point in the report, which is grist to the mill of the Minister, refers to push back by consultants following previous attempts to reduce the high and rapidly escalating cost of health services in this country. There is plenty of evidence in the executive summary of the Milliman report, on page 31 and at the end that we have a high-cost health service that is being refinanced by an uncompetitive health insurance business. The result is that a couple of hundred thousand people have left, directly contradicting the Minister's goal and the Government's goal of universal health insurance. We are going further away from the target. The Minister can use regulatory agencies, in the form of the HIA, in order to extract these gains. I know the Minister's power of advocacy on behalf of efficiency gains but it is an extremely high-cost system. The Milliman report refers to unnecessary hospitalisation and average hospital stays far in excess of other countries.

The health insurance sector has no interest in extracting monopoly rents and high costs from the Irish health care system. I asked the Minister for Finance whether the tax break was an industry subsidy or a subsidy to sick people. Where costs rise to absorb all of the subsidies, we are rewarding the producers. The cost base has to be tackled and I support the Minister strongly.

There should be open enrolment and lifetime cover. It should not be a requirement for people to state what age they are. That is one way to prevent age discrimination although they might need age information for records. Previous medical conditions should not be known either, unless we can judge from the writing on the application form that the person is sick. There should be completely open enrolment, lifetime cover and community rating but in a competitive market. The Department has been historically bound up with defending the VHI from competition and we have ended up with an incredibly high-cost system. It has not tackled the producers. It is strongly stated in the Milliman report that the culture of the VHI was to issue statements saying how many old people it had rather than confronting the high cost of the product in Ireland. Until we confront that, we will face another 86% rise in these next four years. I share the concerns of the Minister for Finance on those matters. I will table amendments on Committee Stage.

The cost base problem was not tackled historically. Having the leading health insurance company oblivious to costs allows other companies to make supernormal profits. I want them to go into hospitals, extract efficiency gains and pass them on to consumers. I will frame amendments with that in mind.