John Crown (Independent) | Oireachtas source

It is 21 years since I returned to Ireland. At that time, I rapidly came to the conclusion that the health system was in fundamental need of reform. The key problems that were obvious to me were the general poor quality, extraordinary inefficiency and highly unequal nature of the health system. It struck me that the key problem was that we had two fundamentally different health systems operating in parallel. The first followed what is known as the Beveridge model used by the British National Health Service, under which general taxation revenue is doled out by the central government in a prospective fashion to institutions which are told to live within a budget and cut their cloth, as it were. The second is more closely related to the Bismarckian model, the first model of socialised medicine which was introduced in Germany in the 1880s by the Iron Duke himself. Under this model, people have mandatory insurance and the amount they pay is fixed to the amount they earn. Under this system, a form of progressive taxation applies in that rich people pay more than poor people and people with higher incomes pay more than people with smaller incomes to obtain the same level of health care. At the end of the process, everybody has a freely negotiable insurance instrument which he or she can take to any doctor or hospital which must, by mandate, accept his or her custom. We need to introduce this model here.

The Bismarckian model in Germany survived two world wars, a great depression, the Nazis, the division and reunification of the country and the many problems that arose from the economic consequences of unity. It is extraordinarily successful, by far the most successful model for health systems in place in large countries. It is, for example, much more successful than the British model and delivers much better access to care and much better quality outcomes than the national health system.

Countries which follow the alternative model, the Beveridge model, occupy the bottom five places in the OECD rating of access to care, with Ireland in last place and the United Kingdom in second last place. This rating is calculated on the basis of information on waiting lists and so forth. There are other moral hazards associated with the Beveridge model, a major one being that there is far too much lining up of all sources of information and power on one side of the health care equation. The same people run, manage, provide, regulate and pay for the service and they have a powerful motivation to ensure the service is perceived in a good light. They have at their disposal extraordinarily powerful tools to ensure the maximum positive spin is placed on any outcomes associated with the service. A significant amount of literature is bubbling through in the United Kingdom to show that whistleblowers are experiencing problems, with doctors, nurses and others who point out deficiencies in the British health system being victimised. A near religious devotion is shown to the notion that if one disagrees with any aspect of the national health service, it can only be because one is an anti-social person, rather than someone seeking to point out problems.

The reforms the Minister hopes to introduce will have the effect of delivering the type of high quality service provided in the top five countries in the OECD ranking. It will give us guaranteed access to care based on need as well as social subsidisation and solidarity in the sense that the rich will pay more than the poor for the same service. It will also have the effect of de-bureaucratising the system. The Minister must study carefully the successful models in place in Canada, which has a single payer system, and Israel, which has a number of not-for-profit insurance companies and one or two for-profit companies. Above all, he must examine the German system under which not-for-profit insurers compete with for-profit companies and the custom is to require citizens to take mandatory insurance. Moreover, in Germany people who do not have an income have their insurance paid for by people like us who have an income, which is as it should be.

With respect to the current arrangements, I sometimes become a little nervous because some of the reforms taking place in the health service are not pointing us in the direction of the type of insurance model in place in Germany but instead in the direction of propagation, as it were, of the Beveridge model of central budgeting. One wonders how, in a competitive environment, having a relatively small number of hospital groups will work and people who have their own insurance will be able to decide to go elsewhere. One wonders if the skill set exists in the Department and Health Service Executive to manage such a radically different health service.

My colleagues in the Fianna Fáil Party have raised objections to the insurance model based on the likelihood that it will result in the introduction of an additional stealth tax. It will be an additional tax unless one provides that people can write off this payment against their existing tax. People currently pay for a level of health care from general taxation. If they are to be required to pay into a separate ring-fenced fund that is kept out of the clutches of the Exchequer and used for health purposes only, there must, by rights, be a commensurate decline in what individuals pay for their health care. Otherwise, the new system will create an additional tax. Parenthetically, this should also have been the case with the water tax. We are always told we should not whinge about the water tax because water is not free must be paid for.

The reality, however, is that the tax we pay already covers water services. If we are now facing a ring-fenced tax for water services, why is our overall tax bill not reducing by the amount taken under the new charge? What we are seeing here is effectively double taxation.

There is a need for fundamental reform of the health system. I am supportive of Senator Quinn's Bill as a step along the way, but the scope of the revolution that needs to take place is absolutely vast. There is an conflict of interest in that the Minister as sole shareholder in VHI is also the person who dictates the terms of employment for hospital specialists, as he did several years ago when he made the decision to impose certain changes in respect of the employment of hospital-based specialists. One could argue that he is exercising a rather monopolistic position by dictating the conditions under which people can work in private practice and the fees they are paid for private activities while, at the same time, having responsibility for governing the public system. In so doing, he is preventing the natural competition that should be there. Senator Quinn's Bill would have the effect of resolving part of that conflict of interest by removing the stewardship of VHI from the Minister.

The Minister has great responsibilities in running the health service. I wish him all the best for a long career in his current role and in implementing the insurance reforms that are desperately needed. He is the first Minister who has actually tried to do after an election what he promised to do before it. I hope he gets the opportunity to see those reforms through, in which case I will support him 100%.