Open letter to Dr Varadkar regarding reform of the health service. Replace current system and funding with German model


Dear Dr Varadkar,

I would like to offer you my advice for reform of the health service. I know it is a most difficult task for any minister. Most recent incumbents either tiptoe around the landmines of “Angola” to protect their political reputations or attempt to make piecemeal reforms – a process that usually ends in failure.

The process of reform requires the steely reform mindset of Napoleon or Julius Caesar, leaders who made reforms to administration systems, calendars and measurement systems that lived a long time after them. My suggestion is to reform Irish Healthcare by adopting a system similar to the German insurance model and privatise all the healthcare provision, funding and administration. The department of Health and HSE would shrink to be a department merely overseeing and directing government policy. To my mind the government has no more business providing healthcare service that is does providing intercity bus services, telephone services, or dare I say it, water service. Goods and services are usually provided much more efficiently by the private sector.

If you doubt this think about whether people would prefer to go into hospital as public or private patients. Which system will provide the better healthcare? In some cases the healthcare will be equally good in the public system as the private system but it is hit and miss and the funding method is not efficient. For instance if two patients are treated in a typical public hospital for identical procedures – one private and one public: The hospital will be paid by the health insurer for the private patient but will receive no extra funding for the public patient. Which patient would the hospital prefer to treat? So which patient stays on a waiting list?

Similarly If two patients go to the GP – one with a medical card and one private which will the doctor prefer to treat – the one for whom she will receive €50-60 or the one for whom she is paid a shrinking amount each year whether the patient comes in or not? Much as with hospitals the private GP system is subsidising the under resourced public one. This is unfair on private patients and practitioners and amounts to another tax.

The system of 2 or 3 tiers is very unfair. Medical card holders get much for free – even free Junior and Leaving Certificates for their children (I am not sure what that had to do with healthcare). Those who are unfortunate enough to be just above the very low limits for a medical card pay for everything expect GP visits. Those above that again pay for everything. Or they may pay for our so-called health insurance which will pay the hospital when they need to be admitted enabling them to beat the queue but pays little for other medical expenses. Perhaps if they paid for GP visits hosipital admissions would be fewer.

The lucrative nature of the medical card makes administration attempts to limit the number the norm. This process can be very cruel. Every year people with long term conditions and expensive drug needs have to reapply, filling in a long form with many financial questions. The application is usually refused first on income grounds and they are without a card for some months. Then the patient has to go to a doctor for a letter and maybe to a TD for representation to try and get the card back on medical grounds. It is a cruel and very inefficient system but I guess it does harass all apart from the persistent and desperate to give up their medical cards.

Our so-called medical insurance system is a joke. For insurance markets to work effectively pricing needs to be based on risk. But when Mary Harney, one of your predecessors, insisted on ‘community rating’ she demonstrated that government did not consider the health insurance market to be the same as other insurance markets, especially when dealing with the grey vote. Somehow it was not OK to ‘discriminate’ against older people who are often sick in the same way the younger less-experienced drivers are ‘discriminated’ against for motor insurance. The chickens are coming home to roost now with fewer young people taking up medical insurance.

The government is correct not to treat medical insurance as pure insurance. The wealthy pay more for car and house and life insurance because they have more to insure but not for Irish style health insurance. The current insurance model with one premium no matter your age, medical condition or income is not working and will never work for the whole system. Therefore a 2-tier model will inevitably remain as long as it remains a key method of funding. The German model where you pay a percentage of your income is a good option. At present much is funded publically so this is like an income tax. Therefore the funding is related to income. This also will charge older people more on average because they earn more on average than younger people. The amount paid would be about the same as USC so it could be reassigned for this purpose. Obviously you can then have competition in the market by allowing the insurance companies to charge slightly varying percentages and offer different extra benefits.

In addition to privatising the financial administration, all the health care providers should be privatised into hospital trusts or for-profit companies. They would be paid by the insurance companies for work done. Market principles would apply for staff costs, building etc. with all costs planned and budgeted as they are with most industries. The potential for government meddling with go. This will take a lot of pressure from individual patients and healthcare unions off you and your colleagues. Hospital managers will be able to manage healthcare provision dealing with patients, insurance companies and staff in the same way as most other businesses.

We also need to return sanity to medical education. How come when we have ginormous points for medicine, indicating strong interest from the best and brightest, that very few junior hospital doctors are Irish? Perhaps because the medical education system is not properly funded by government and has to prostitute itself and take in many overseas students at high fees to ‘subsidise’ the Irish students. Many of this small number of Irish students then take their subsidised education and go abroad after qualifying. Few come back so junior hospital positions are filled by foreigners, many with poor English.

The government should require subsidised medical students to work in Ireland for 3-5 years post training or be liable to pay the economic costs of fees. Sufficient Irish students should be given places in medical school to meet our future needs. Only after that should places be offered to overseas students. Also, medical education should become post-graduate. This may increase number of places without additional infrastructure and would also have the beneficial effect of increasing the status of science as a university subject.

The medical card system will become redundant under this scheme. If government feels the need to subsidise non-medical services to low income people a new system should be introduced.

Everyone should receive GP and medicine cover under the new system allowing the abolition of the current drug repayment schemes. Every patient should pay a nominal fee for doctor or dentist visits and a nominal fee for prescriptions, like that introduced recently for medical card holders.

This is only a start. It is clear that to reform the medical system a new approach is needed. Continuation of the current 2-tier system with government playing the role of main funder and main service provider will never be as good or efficient as a well-structured private model and will remain ‘Angola’ for politicians.

Yours sincerely,

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