'End State subsidies for private care'

[Posted: Sat 02/10/2010 by Niall Hunter, Editor www.irishhealth.com]

A leading health service analyst has said the taxpayer should no longer subsidise private healthcare in this country.

Dr Anthony Staines, Professor of Health Systems at Dublin City University, said the ending of State subsidies for the private health sector would save a lot of money.

Speaking at the annual conference of the Irish Hospital Consultants Association in Co.Limerick, Prof Staines said private healthcare in Ireland received very large annual subsidies.

These included €260 million in tax relief for health insurance premia; €90 million for the National Treatment Purchase Fund; up to €100 million in subsidies for private patients in public hospitals, in addition to other items such as the cost of the co-location project, tax relief on the building of new private facilities, and subsidies for medical negligence insurance for consultants' private practice.

Prof Staines said the "opportunity cost" of having consultants working off their main public hospital site in private hospitals is also high. This means if a consultant whose employer is a public hospital is working elsewhere, this effectively generates a loss to that service as the consultants are not available.

He said consultants who are employed by public hospitals but who can do private work should be levied on the  income from this work - if the levy was 50% this measure alone would bring in €175 million a year.

Subsidies for private care could amount to as much as €700 million a year, he said.

Prof Staines said in addition to cuts in private healthcare subsidies, other areas where money could be saved include drugs and acute hospitals.

He said significant savings had already been made in drug costs but more could be made through greater use of generics and setting very restrictive budgets for costly new drugs. These drug saving measures could, he said, cut around €240 million off the public drugs bill.

Acute hospital efficiency could also be improved, he added.

Prof Staines told the meeting that current health cuts are hitting frontline services disproportionately, and warned that planned cuts could cripple health services next year.

He said if the Irish State did not do something radical, all health service users would suffer, and these were largely the elderly, the disabled, the poor and the sick.

Prof Staines said targeting further savings in the areas he proposed would mean services might still be inadequate, but they would at least be evenly inadequate.

He said the HSE would lose around €600 million this year and probably as much again or more in 2011 and 2012.

Meanwhile, at the conference, IHCA President Dr Margot Wrigley described the HSE as cumbersome, inefficient and not fit for purpose.