An Unhealthy State: Is health spending a black hole? Or are we refusing to accept the inevitable - better health care requires higher taxes and political vision? Maev-Ann Wren, author of a new book on the health system, investigates.
When Micheál Martin was a young councillor in Cork in the mid-1980s he filled out a political questionnaire circulated by The Irish Times librarian. To the question "what motivated you towards politics?", he answered: "A genuine desire to effect change in Irish society. Would consider myself Social Democratic, left of centre in economic terms."
On last week's Late, Late Show Micheál Martin came out fighting and argued for increased taxation to fund the health care needs of a growing, ageing population.
The Minister for Health was challenging the conventional wisdom of this Government. Only last month the Taoiseach said in an interview: "I do not hear anybody saying that they would be glad to pay significantly higher taxes in this country to put more money into the health service."
The battle over the health service is a battle on many fronts. It is manifestly a battle about how much we should spend, on whom we should spend and how we should fund that spending.
But it is also a battle about the nature of Fianna Fáil and the nature of this society. The ascendant Tory wing of Fianna Fáil, championed by the Minister for Finance, Charlie McCreevy, may yet come unstuck on the issue of health spending. How the political process chooses to resolve the interrelated issues of health service investment and reform will determine the shape of this society for many years to come.
This is the Boston versus Berlin debate reduced to its essentials. Which matters more - low taxes or public services?
When the Cabinet gathered in Ballymascanlon, Co Louth, two years ago to discuss the state of the health service and the Department of Health made a pitch for greater funding, Martin argued, "It is not a case of throwing money into a black hole". McCreevy demurred and when he left the meeting, said of the health budget: "I am not happy with how it's being spent".
Later that year, a massive study of value for money in the health system by management consultants Deloitte & Touche concluded that since health spending was coming from such a low base, if the public wanted a superior system "then, as taxpayers, the financial implications of addressing the current health service deficits need to be accepted".
McCreevy and his ideological allies in the Progressive Democrats were unenthused. He initiated a further study of health spending by a commission chaired by UCD Professor of Management, Niamh Brennan. The much leaked Brennan Report has proposed reforms in health system organisation and the consultants' contract but, like Deloitte & Touche, supplies scant evidence of a black hole in health spending. This leaves the Minister for Finance with something of a dilemma.
The Government was elected last year having explicitly promised the electorate that it would fund a €13 billion health strategy. Yet just 12 days before the strategy's publication in 2001 McCreevy wrote to Martin: making it clear that initiatives contained in the Strategy with expenditure implications for 2002 were included without his approval and "carry no commitment on my part to the allocation of any particular sums to your Department in the Budget . . ." (See above).Fianna Fáil papered over these Cabinet cracks during the 2002 election campaign, but last November, within six months of the Government's re-election, McCreevy announced that funding for the strategy "cannot be addressed at this particular time and won't be addressed next year or the year after".
This breach of faith with the electorate raises the question of whether Fianna Fáil ever saw the strategy as more than an election platform.
In the 1930s, 1940s and 1950s, Fianna Fáil was a party of health care reform: it built hospitals, was willing to contemplate a free national health service, and delivered free hospital care for the majority of the population. Then, in the 1960s, the party became beholden to the new business class and lost touch with that populist past.
The two-tier system of access to hospital care is a construct of Fianna Fáil governments, albeit never seriously challenged by any other party in government. The poor law philosophy of the medical card system - with cards allocated only to those who are deemed unable to access care without "undue hardship" - would have been an affront to the reformers of the 1940s.
With no vision for the health system, Fianna Fáil threw money at health care in the late 1970s, cut back savagely in the late 1980s, rapidly increased funding at the turn of the Millennium and now appears set to cut back once more. The Government is dismantling its own achievements.
Remember the nurse staffing shortage? The Government responded by increasing nurse training places by 70 per cent. Nursing care is being cut through reduced overtime and non-replacement of temporary staff. Now graduating nurses may not get jobs.
The Taoiseach and the Minister for Finance are faced with the unpalatable dilemma that delivering the kind of health care which the Irish people want will require additional funding, raised either by increased taxation or compulsory health insurance.
There will have to be reform, but not just reform of accounting systems and management structures, so beloved of the Minister for Finance, which might deliver some efficiency gains, but essentially amounts to a rearranging of the deckchairs on the Titanic. The flaws in the health care system run deep: it denies the most basic GP care to many families who cannot afford doctors' fees; accords private patients preferential access to public hospitals; permits salaried public hospital consultants to augment their generous incomes by earning private fees in public hospitals and working in private hospitals; countenances the delivery of much public and emergency hospital care by junior doctors; and delivers care in too many small, sub-standard hospitals.
As the Government prepares to publish three studies on the health system - which address only some of these issues - defenders of low taxes prefer to identify "value for money" as the central issue facing the health service. But is this a political smokescreen to distract from the Government's abandoned election promises, its fear that delivering on the health strategy would require increased taxation and its unwillingness to address the real flaws at the heart of Irish health care?
Is the black hole a reality or illusion?
Irish health spending has been very low for a very long time. Cutbacks in the late 1980s reduced spending to 57 per cent of the EU per capita average by 1989. Spending exceeded the EU average for the first time in 2001. Last year, at more than 9 per cent of national income, it was close to spending in France, lower than spending in Germany. Did we seriously expect to achieve in a year the kind of health care which has taken these countries decades to build? Consider this - there exist patients who have been on public waiting lists since 1997 and before. Current health spending is attempting to address the backlog of years of neglect.
Unplanned cutbacks in the late 1980s dramatically reduced the number of hospital beds, which remained static through the 1990s despite population growth. We have fewer beds than other countries, many in inadequate institutions. We have fewer doctors. Services for the mentally ill, the elderly and the intellectually and physically disabled are deficient. Life expectancy is below the EU average.
Where have the increases in health spending gone?
Between 1997 and 2002, when public health spending increased by nearly 80 per cent above public sector inflation, the number of patients treated in acute hospitals increased by 23 per cent. The service employed 26 per cent more doctors between 1997 and 2001; and 18 per cent more nurses between 1998 (the low point) and 2001. Why weren't there better results?
Population was also growing - by 8 per cent between 1996 and 2002. Not all increases in staff translated into extra care. Junior doctors worked reduced hours. Trainee nurses left the wards for more academic studies. Although greater use of day surgery and shorter hospital stays meant more patients could be treated in the same number of beds, there remained appalling backlogs.
And whatever happened on public waiting lists, private patients had privileged access to beds, so that in the Eastern Region last year, private patients waited 3.4 months on average for a bed in a public hospital while public patients waited on average 6.7 months.
Spending on care for the disabled increased fourfold between 1990 and 2002, while spending on community services such as home helps, foster care and homes for the elderly tripled. Services improved, but there was a lot of ground to make up.
Fianna Fáil coiners of the election slogan, "A lot done, more to do" have abandoned the second half of their mantra.
To give an instance, between 1997 and 2001 an additional 1,650 residential respite places were provided for the intellectually disabled, formerly an area of utter neglect. A lot done. Yet, as any campaigner will tell you, there remains much more to do.
Aren't there too many administrators?
This is the urban folklore, but the Brennan Report found no evidence that administrative staff had consumed additional health resources. Between 1997 and 2001, administrative staff increased by nearly 70 per cent to 15,000 out of a 93,000-strong public health service workforce. "Administrators" included telephonists, consultants' secretaries, child-care workers and workshop managers - and came relatively cheap. While during the 1990s, doctors' public pay increased by 77 per cent on average when adjusted for inflation, and nurses' and paramedics' by 66 per cent, the pay of administrative staff increased by 32 per cent. When the Government announced a freeze on administrative jobs last summer, the IMO immediately protested that consultants had too little administrative back-up.
But haven't we too many health boards?
This is a different issue. The Prospectus Report recommends the abolition of the health boards and their replacement by a national health services executive. But the report does not anticipate significant administrative savings - about 1 per cent of the national health budget, less than the health service needs annually for information technology.
These recommendations are not driven by a perception that over-administration is consuming the health budget but by the belief that elected boards dominated by local councillors are an obstacle to rational planning.
The Prospectus Report argues that executive responsibility needs to be centralised, repeating the case made forcefully in 1989 by the Commission on Health Funding. So democratic oversight of health care delivery should be given to the Minister and the Dáil. Will this FF/PD Coalition adopt the recommendations which the first such coalition ignored 14 years ago?
Has anyone found a smoking gun of wasted spending?
No convincing evidence has been found of the anticipated smoking gun - funds wasted on administration or maladministration. Flagged as an exposé of mismanagement in health, the Brennan Report often appears to equate failures of accounting with misspent funds, which is not to deny the merits of its case for better management systems.
The true smoking guns are consequences of Government policy, the central misspending is inequity. If those who are most sick are not treated first, or at all, then the health care system cannot deliver value for money - the improved health of the Irish people. Ireland has spent more per capita on health than the UK since 1999, yet in England last September only six patients - in total - had waited more than 18 months for inpatient or day treatment.
Only three patients in England for every 10,000 of the population had waited more than a year, compared with 21 out of every 10,000 in Ireland. If there were a common waiting list for Irish hospitals, private patients would wait longer, public patients would be treated sooner and the average waiting time would fall, a levelling down for some, a levelling up for others. Better still to accompany a common waiting list with increased investment so that everyone would be treated within an acceptable time, and to develop accessible primary care so that fewer people would need hospital treatment.
There are more instances of misspending. With tax breaks for private hospitals, the Minister for Finance has added to existing subsidies for private care: below-cost access to public hospital beds, tax relief on VHI premiums and the delivery of care by publicly salaried staff. The National Treatment Purchase Fund, a welcome escape hatch for despairing patients who have waited longest for care, bizarrely purchases private care for public patients who have been denied access to public hospitals, while the private patients who displaced them continue to receive State-subsidised treatment. Meanwhile, throughout the State, highly paid junior doctors work long hours, untrained and unsupervised, in too many small, acute hospitals, which deliver inadequate care, while even more highly paid consultants are too often absent from the frontline of public care.
The Budgets of the boom years have eroded the value of health spending. The big investments in health occurred when the Minister for Finance was over-inflating the economy by simultaneously cutting taxes. By 2001, health care investment under the National Development Plan was delivering 40 per cent below target because of rising construction costs.
How much should we spend and on what?
The 2001 health strategy assessed a need for 3,000 more acute beds, thousands more nursing home beds, primary care centres, more doctors, nurses, therapists, and facilities for the disabled, the mentally ill, the homeless, children at risk.
Funding the strategy could require health spending to rise to 12 per cent of GNP. A UK study reached a comparable forecast of the price of improving the NHS to cope with an ageing population, but hoped improved preventive care might lower the price. Countries with admired health care systems - such as France, Germany and Canada - have maintained health spending at 9 to 10 per cent of national income for long periods.
The strategy could be delivered for a lower price: by reducing the number of hospitals which purport to offer acute care and concentrating investment in centres of excellence; by employing more consultants on lower salaries - comparable to those in the UK; by phasing out subsidies to private care and requiring publicly salaried doctors to work for the public system exclusively; by taking the necessary legislative steps to remove political control of health care from the elected health boards.
If improved health were the motivation for health spending, improved access to primary care should be the Government's priority, and universal free access its next objective. This would require an acceptance of increased taxes for some to fund better access to care for others - a conversion to the idea that health care is a right, not a marketable commodity. But this Government spends five times the Dublin hospitals' funding deficit on giveaways under its SSIA scheme and has reduced public spending to 42 per cent of national income compared with 54 per cent in France.
The Brennan Report identified a managerial vacuum in the health care system. The political vacuum is the true black hole.
Unhealthy State - Anatomy of a Sick Society, by Maev-Ann Wren, will be published by New Island (€17.99) next week