Private sector will not cure creaking health service

The "high-flyers" have spoken

The "high-flyers" have spoken. They have pronounced that a good dash of private-sector involvement is just the tonic needed by our creaking health service.

The high-flyers, as they were described in The Irish Times, are a group of people who attended Harvard University. Last year they decided to bring their collective mind to bear on the problem of hospital waiting lists.

The fruits of their labours are in the as-yet-unpublished report Waiting Lists: Analysis, Evaluation and Recommendations, by Prof Ray Kinsella, director of the Centre for Insurance Studies in the Graduate School of Business at University College Dublin.

They suggest that health services should be delivered to a much greater extent through the private sector.

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The impression given in this is of a private sector which has an enormous contribution to make towards the provision of hospital services.

But has it? More private hospitals have closed than have opened in recent years. Certainly, when it comes to bed numbers, the private sector does not have the answer.

Nor does it have the answer in other areas either. For instance, from next year the VHI will put MRI scanning services for outpatients out to tender. What if a private hospital with an MRI scanner isn't successful in the tendering process?

Any private hospital which is thinking of buying a scanner will surely have to think twice about the wisdom of going ahead without an assurance of outpatient referrals.

This clearly does nothing to increase the capacity of the system to offer services.

In the public sector, by contrast, the opposite is happening. Between 2000 and 2006 a total of £2 billion is being spent expanding and upgrading facilities in the public hospitals and in other parts of the health services.

This, in many ways, represents a quiet revolution in public health services, and it dwarfs anything the private sector can do.

It is, however, a quiet revolution. In May of last year, for instance, the Minister for Health and Children announced the provision of an extra £72 million for equipment and refurbishment in that year. That sort of spending matters enormously to the quality of hospital services, but it doesn't grab headlines.

The following month Mr Martin announced the provision of £4 million for better beds. Again, if that announcement even made it into the papers it was probably passed over with a shrug by those who read it.

That's an example of how big spending in the public sector can fail to catch the imagination.

That spending, by the way, is not only for public patients. Private patients often have to be put into public beds because the private beds have been taken up by public patients admitted through the emergency departments.

Private patients will also benefit from the use of hospital facilities, and the health insurance companies will meet only a fraction of that cost.

This is not to deny that the private sector has its place. It can provide some extra beds which are, already, contracted out from time to time by the public and voluntary hospitals. It can provide accommodation standards such as private rooms, for which many people would gladly pay extra.

But the notion that it has a significant role to play in reducing waiting lists simply ignores the reality of what is involved in providing a health service today.

There was also an interesting and alarming suggestion regarding family doctor services. GPs, the report complains, refer 6 per cent of patients, on average, to acute hospitals, and it would like to see this adjusted downwards.

This is precisely the sort of thinking one would expect from advocates of a private-sector approach to the health services.

If implemented it would engender distrust between GPs and patients and conflict between GPs and whoever would have the job of "encouraging" them to keep referrals down.

It is, indeed, possible that a universal insurance system could be used to finance the health services. Under such a system, insurance premiums would be paid partly by the State and partly by the citizen. But what the system would be financing would, essentially, be the public system because it is the public system which delivers the health service.

And it would not come cheap. Germany has one of the most highly developed health insurance markets in the world. Practically everything from GP visits to hospitalisation to homecare is paid for through insurance. The cost, 14 per cent of salary, is split between government and members. Yet recently the German health insurance bodies posted their biggest deficit ever. Now cutbacks and a rise in premiums are threatened. At the moment health insurance in Ireland is cheap - but how we howl about the premiums! - because the taxpayer subsidises the health insurers, principally by not charging an economic price for the use of public facilities by private patients.

A universal health insurance system would have to include a common waiting list in which people were treated according to their clinical need and not according to whether they had paid extra. In doing so it would remove much of the demand for private beds.

There would still be a growing need for beds, staff, equipment and community care, and the assumption that the private sector is able to provide these to any significant extent is outside the realms of practicality.

Private healthcare may be just the thing for high-flyers, but the rest of us will do better to focus on building up a strong public health service which will be there for us when we're flying high and when we've crashed.

Padraig O'Morain is Health and Children Correspondent of The Irish Times