HEART BEAT: It nearly broke their hearts to do it, but the insurers had to raise their fees
IT IS seldom you can listen to the news now without being appraised of some imminent disaster. Alternatively, you can get an update on some established calamity; the choices seem endless.
Just occasionally there will be a glimmer of good news - "Joe Speed Inc, world leaders in codology, are to provide 200 new jobs in Ballyslap it was announced today. Two jobs are to be established immediately and the rest will follow over the next 20 years."
So things are looking up; sort of!
The weight of genuine and severe problems pressing from every side almost distracted us from serious problems posed for the health services by last Friday's rise in health insurance rates.
This rise is part of an ongoing saga, a tale sadly all too predictable.
Nonetheless, when it came, its size was an unpleasant surprise for most subscribers. The VHI, the dominant force in the market, announced a 23 per cent increase in subscription and Quinn Healthcare a 16 per cent increase.
It nearly broke their hearts to do it but times were tough. Previously, the Minister for Health had announced a €300 tax exemption for those with health insurance aged over 50. Such a move would clearly benefit the insurer with the older clientele rather than insurers more recently in the market.
Simultaneously, a levy of €160 per adult and €60 per child was announced on those holding such insurance and also there was to be an increase in private bed charges in public hospitals.
The net effect of all of this was the consumer gets to pay more. The Government levy is merely another crude blundering imposition on those labouring in this "low tax" heaven.
We were told that this was necessary to protect the principle of "community rating" where all age groups pay similar premiums.
This, we were also told, was because the ruling of the Supreme Court in the matter had made the principle unsound and that there could, in consequence, be major subscription increases for older subscribers.
This quietly ignored the fact that the Supreme Court had not ruled adversely on "community rating" at all. It had, rather, struck down the totalitarian concept of "risk equalisation" introduced oddly by this supposedly free market, Minister. I use the term "oddly" advisedly, because in all other aspects she seems to be promoting privatisation of the health service.
Let us suppose we have an old, well-established department store which for many years has been the only show in town available to service the customers.
Let us further stretch our imaginations and suppose that two ultra modern stores open in the town and attract many of the old store's customers. If we had the concept of "risk equalisation", these stores would have to compensate the older establishment for making away with a good portion of their customers.
This would hardly be a concept likely to encourage competition and new entrants to the market. So it proved when Bupa sought to have this matter tested in the courts. Now we see simply a clumsy attempt to circumvent the ruling of the court.
A major part of this problem is that the VHI was Government controlled and therefore had a major advantage over anybody seeking to establish in the market, as the Government, as we have just seen, could simply change the rules if problems arose as in this instance.
Now bear with me a while if you're not already asleep as I realise we've been down this road before. However, the maladroit handling of the issue combined with the difficulties of the current economic situation creates enormous problems for the health services.
Let me spell this out as simplistically as I can.
1. Price increases will cause a certain number of subscribers to exit the schemes altogether or reduce their cover; resulting in loss of income for the insurer. The VHI has estimated that as many as 10 per cent of its base could be described as "soft" or vulnerable to this pressure. It could well be more in the steadily worsening economic situation.
2. Job losses currently running near 1,000 per week will further exacerbate this trend. (Sorry that should be 998. I forgot the two new jobs in Ballyslap.)
3. Decreasing house values, equities and pension funds will further reduce numbers.
The funds will have less money to disperse to the private hospitals and services. Accordingly, prices will have to be reduced or the fund may be unable to meet them. It is highly unlikely that in any case the market can bear any further increase in private bed capacity.
Accordingly, the whole concept of co-location needs to be rationally examined. I see little alternative to its abandonment.
Private hospitals are about making money. They use staff trained almost exclusively in the public system yet make no contribution to their training costs.
They do not bear a fair share of the treatment of chronic, long-term, A&E services, etc. Their only income is from insurers like VHI, etc and from the State-funded National Treatment Purchase Fund (NTPF).
The public hospitals and A&E departments are stretched beyond capacity. The situation is getting worse. Given the above scenario of dwindling numbers supporting the private system, an urgent rethink of priority is necessary.
It is manifest to all but the most ideologically blinkered that our State service must be revived and re-bedded. Patients are first and foremost the priority. As of now, the entitlement of everybody to a public bed is being dismantled at a time when it is more necessary than ever.
How do we do this? "National compulsory insurance for all classes for all purpose from the cradle to the grave."
No, it's not Marx or Lenin; it's from Winston Churchill, hardly a man of the left, but undoubtedly a visionary.