Minister’s vision for future health service

Hospital Groups should be truly autonomous but were unlikely to be underpinned by legislation for some years, it emerged from Health Minister, Dr. Leo Varadkar’s speech to the MacGill Summer School in Donegal. Maureen Browne reports.

Health Minister, Dr. Leo Varadkar
Health Minister, Dr. Leo Varadkar

The Minister said it was his strong view that the current administrative set-up of the Hospital Groups needed to be replaced with a clear statutory one, and this should be done within the first two years of the next Government.

He said he was also strongly of the view that hospital groups should be truly autonomous to the extent that any body which was funded mainly by public money could be.

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“That means having board members that are not all appointed by the Minister. The Hospital Groups, or Trusts if you prefer, must also have the authority and freedom to negotiate independent contracts to recruit managers and specialists outside of the constraints of public sector rules in the way semi-State companies do now, and to recruit their own general staff and enter into the contracts independently as semi-States do now.  They should own their own assets and be able to borrow against them.

The Hospital Groups, or Trusts must also have the authority and freedom to negotiate independent contracts to recruit managers and specialists.

“Along with greater authority will come accountability, including for meeting healthcare standards as assessed by HIQA and for delivering value in the use of public money as audited by the C&AG and subjected to scrutiny by the PAC.”

The Minister said the move to Activity Based Funding was a critical reform. It was more advanced than people might think but would require a long transition period given the huge variation in efficiency versus funding from one hospital to another. “We need a major investment in modern, IT-based financial systems so that we can actually follow the money. And we also need electronic patient records, so that we can follow the patient. At present, we really can’t do either very well.

“Activity-based funding will replace block-grant budgets and will ensure that money follows the patient, and therefore that hospitals and community healthcare organisations are incentivised and paid more to do more work, whether that involves more hip operations, more home help hours or more dermatology clinics. I believe linking spending to activity is the biggest single reform that will make the most difference for the better in our health service, from the point of view of patients and taxpayers.  I believe it can be done during the term of office of the next Government.

“One crucial and deliverable reform is the ending of any preferential access for patients with health insurance in public hospitals to theatre, admission, a specialist opinion or diagnostics.

“At the top, we need a Health Commission to assess demand, allocate funding, and set models of care. This would split the health purchaser from health and social care providers, and allow the Health Commissioners to get the best value from health providers whether they are public, voluntary, charities, NGOs or private companies.”

He said The Health Commission could be based upon a re-shaping of existing responsibilities and expertise in the HSE and the NTPF, but also with input from new people who brought additional skills. A Health Pricing Office separate from providers and purchasers would also be required. Providing for this function could take place within the first half of the term of the next government.

“One crucial and deliverable reform is the ending of any preferential access for patients with health insurance in public hospitals to theatre, admission, a specialist opinion or diagnostics. Health Insurance should get you a nicer room and other hotel-style benefits in a publicly-funded hospital, but nothing else.”

He would like to find a different way to cover adults – who were not already covered – for free access to primary care and he believed there were two options. The first was social insurance, using a reformed PRSI/USC system to refund medical expenses such as GP visits and visits to the pharmacy, dentists and therapists. With rising employment, falling unemployment and rising wages, he thought it was affordable. It could also be a major step towards a single-payer social insurance based system with payments to providers, or refunds to patients, administered by a new single payer.

Another way of achieving the same outcome would be to introduce universal health insurance for primary care first, using a multi-payer system, and giving people the option to pay for it through Social Insurance – their PRSI – or to opt out in favour of a new or existing private health insurance policy that offered the same.

We also needed a new scheme to reduce the out-of-pocket cost of medicines – €140 per month was just too much and fell very heavily on single-person households. The €2.50 prescription fee was also too high. Some of the savings made from any agreement with the pharmaceutical industry should be used to reduce these fees or introduce lower monthly or annual caps.

Dr. Varadkar said that the reform process would need a dedicated funding stream of its own. He saw no compelling evidence to favour one collection system over another – it could come from tax, from social insurance, from health insurance, or from out-of-pocket payments, or some form of combination?

“Australia has a two-tier system a little like ours, but because access to the public hospitals is timely and the most complex and specialist centres are in public hospitals, people really only take out health insurance for hotel-type benefits, but they do so in large numbers.

“In Britain, the health service is almost entirely tax-funded and provides timely access and reasonable outcomes. Nonetheless, a proportion does take out private health insurance policies, mainly with BUPA. They have a two-tier system too. It’s just a very different one.

“The Dutch system rates high on quality and cost and operates under a multi-payer compulsory private insurance regime. Germany does it differently still. France differently again.

“The reason their systems are relatively better than ours is because they get the other things right.

“So, we need to get the other things right first before making the final leap – adequate funding and staffing, sufficient numbers of specialists, sustained investment in health and wellbeing, universal primary care, much stronger social care, autonomous statutory hospital trusts and community healthcare organisations, activity-based funding, and a health commission with a purchaser/provider split.