Are FG’s FairCare Proposals a Boon for Private Health Insurance?
After Fine Gael announced its recent FairCare proposals for health service reform I contacted ILR contributor Dr. Gerry Burke, consultant obstetrician & gynaecologist in Limerick’s Regional and Maternity Hospitals and a vociferous campaigner against co-location to see what he thought of the proposals. I first asked him if the proposals would help improve patient outcomes and then about the current status of co-location, which the IMO recently called on the government to officially scrap.
While I am concerned about some aspects of Fine Gael’s FairCare proposals for health service reform I welcome the fact that they remain committed to universal health care. The idea that primary care will be free is particularly welcome. Replicating the Dutch model in Ireland, however, will be very difficult. The Dutch model depends heavily on risk equalisation and strong regulation – our record on both has been dismal.
My major concern is that the Fine Gael method effectively hands health care over to the private insurance industry. After all that has happened with the banks and the building industry, one has to ask “Is it really wise to hand the nation’s health care over to Seán Quinn and other profit driven insurance companies?”
Richard Nixon handed over US health care to the private insurance industry in the seventies and we can now see the results: despite a massive 17% of GDP spend on health, outcomes, such as infant mortality, are decidedly mediocre and lag far behind most European countries. Sickness has become the major cause of personal bankruptcy.
Dr John Barton was one of those involved in the Fine Gael proposals – my interpretation of his writings on the matter is that he considers private insurance to have more disadvantages than advantages, so I am a little surprised at the FG plan (see here and here).
Labour is very committed to universal health care with free primary care. It is considering the model at present. My hope is that Labour will decide on a social insurance single-payer (the State) model. In the single-payer model (as in Canada), you buy your health insurance from the State rather from the private insurance industry but you can use it in all approved health care facilities. I think this would the quickest method to transform the health care system we have into a single tier system. Furthermore, it would be more likely to be capable of controlling costs than a system that involves the investor owned private insurance industry. I see no role for Seán Quinn or any other middle-man in health care. My colleagues and I have written about this in the Irish Times (here and here).
With regard to the co-location, of course it is dead – it just hasn’t yet been declared dead! The recent assertion by Beacon Medical Group (BMG) that this socially repugnant idea of segregating sick people according to their financial means will go still ahead shows that they are considerably out of touch with reality. Even the most casual acquaintance with the facts suggests that co-location is a dead duck.
Even if the co-location managed to escape the abolition of tax-breaks for private hospitals contained in the recent Budget (and it may not), it is very doubtful that private hospital developers will be able to secure funding for the eight planned co-location hospital projects. Banks will be extremely circumspect about supporting a large expansion in the private hospital sector at this time. Fewer families will be in a position to afford private health care and many of the country’s current large complement of forty or so private hospitals are experiencing difficulty. It is already accepted that a 25% increase in private insurance premiums will be required to support co-location. Private investors (the usual ‘high net worth’ individuals targeted by such tax-incentivized schemes) have become both cautious and scarce. It is known that at least one major local investor has walked away from the project in Limerick.
Both Labour and Fine Gael are opposed to co-location. Sinn Féin opposes it. The Green Party opposed it before the last election and are probably not committed to it. Fianna Fáil itself has been noticeably silent on co-location since November last. If there is a change of government any time soon, it is extremely likely that the policy will be abandoned. Jan O’Sullivan has stated repeatedly that Labour remains vehemently opposed to co-location. Labour in government will be far more concerned with rapidly implementing its vision for an equitable health care system and in improving the public services. In that scenario, the fate of wealthy investors’ money, ploughed into tax-break driven projects like co-location, is not likely to be a new government’s first priority. Potential investors would be well advised to be very wary.
The government should now clarify the position. It is time to admit that the co-location policy has been a financial, political and philosophical failure and to finally put an end to its miserable existence. Instead, the Government should proceed with its plan to raise funds for major infrastructural projects through the issuing of bonds. A ring-fenced bond issue for public hospitals would allow us to rationalise and modernise our acute hospitals quickly, while creating employment in the building industry.
Dr Gerry Burke, FRCOG, is a consultant obstetrician & gynaecologist in Limerick’s Regional and Maternity Hospitals. He is also a member of the Labour Party.