Reilly should balance books before spending more on health service
Business Opinion: the Minister for Health has to find about €1 billion in savings but his record suggests he will not
Over the weekend, Minister for Health James Reilly chose attack as the best form of defence in two policy areas. Photograph: Gareth Chaney/Collins
Since long before the break-up of the old health boards, the Department of Health has struggled to develop a cogent vision of how health services should be delivered or to provide existing services on budget.
Little in the recent performance of the current Minister, Dr James Reilly, indicates any impending improvement. Over the weekend, Reilly chose attack as the best form of defence in two policy areas. First he said he would look to beef up the powers of the Health Insurance Authority, particularly so they can cull the bewildering array of private health policies on offer.
This sounds positive. Too much choice can be as unhelpful as too little in getting consumers to engage in an informed manner with the market. But things are not as clear-cut as they might appear.
First, any forced cull of policies will almost inevitably see insurers abandon older and more expensive policies that people were familiar with up to the recent past – and where insurers’ margins are likely being squeezed, especially for older patients. Each passing year sees the introduction of more restrictive health policies as insurers look to keep the cost within levels consumers can afford.
In effect, under such a policy, the regulator will likely oblige customers to avail only of policies that offer them fewer benefits in fewer hospitals and oblige them to part-fund procedures either through policy excesses, co-funding or both. Those, especially elderly people, able to afford more comprehensive policies and willing to do so for the peace of mind they offer will no longer have that choice.
Such a move ignores why, despite lower drug bills and consultant costs, private medical insurance premiums are rising, driving the introduction of ever more inventive and selective forms of medical cover. The bottom line is that more than 113,000 people allowed their private medical cover to lapse in 2011 and 2012. Another 70,000 are expected to opt out this year. That runs counter to Reilly’s “universal health insurance” vision which sees everyone in the State paying for insurance under a single-tier system.
Universal health insurance underpins the Minister’s second pronouncement at the weekend: a reaffirmation to deliver on the Government’s promise to provide free GP care for all by 2016.
There is an argument that healthcare as a market is not as open to competition as other sectors. This is especially so with GP care. Most consumers build a relationship with their GP that is not built on price. It is even more generally recognised that services provided by the State are less efficient in cost terms that those provided by the private sector. This is why, in general, the State intervenes in the market only to support the vulnerable.
In Ireland, with health, this happens through the medical card scheme. One can argue that the scheme is in need of reform and that a number of people with medical cards are not sufficiently needy financially, or medically, to require them. But the answer hardly seems to be that we should make all GP care free.
It beggars belief that the State can find no better use for its scarce resources. Either our children under the age of six are in families that cannot afford healthcare – in which case they should be eligible for a medical card – or they are not, in which case the State should not interfere.
It seems far-fetched that a troika that spent considerable energy trying to persuade the Government to move away from universal payments – notably in the case of child benefit – could favour the Minister’s scheme even to the extent that it has been announced to date.
The Minister has about €1 billion in savings to find on the back of budget cuts and promised service enhancements. His record suggests they will not be found.
Getting back some measure of economic sovereignty is the Government’s stated priority. Major overruns at key spending departments do little to instil in markets the necessary confidence for that to happen. Reilly would be better served getting his department’s financial house in order than adding further layers of spending for which there has been no public demand or requirement.