Harney on Health Funding

With so many major macro and financial stories filling the headlines, it can be easy to forget about the major microeconomic issues that need to be considered when thinking about how to deliver as high a level of public services as is possible with less resources.

Minister for Health, Mary Harney’s op-ed discussing various proposals for reform of funding and delivery of health services (such as this proposal from the Adelaide Hospital Society and Fine Gael’s Fair Care proposal) is worth reading carefully to understand the government’s position on this key area of public spending.

16 replies on “Harney on Health Funding”

‘Healthcare and health funding is complex. An open and honest debate is useful. It serves no purpose to put simplistic arguments either for or against particular proposals. There are no simple “solutions”.

No single method of raising funds from the people for health itself delivers the results we all want. The most important thing, I would suggest, is to use the resources we can actually generate for patients’ best health’

That’s progress. Sounds like Mary has been listening to Brendan Drumm, who has consistently argued that health gain is about delivering the optimal, rather than the maximal volume of medical interventions. A hard row to hoe in the Irish and international context.

Healthcare reform is not small beer. I am not sure it is simply a microeconomic issue, although medicine is a business as much as it is a craft. It’s also about competing goods, (health v wealth) as the old Greek philosphers knew well.

The citizens or Oregon were once invited to rank the benefits of various medical interventions. My recollection is that cosmetic surgery came out on top. There’s nowt queerer than folk.

@ Karl,

“With so many major macro and financial stories filling the headlines, it can be easy to forget about the major microeconomic issues that need to be considered when thinking about how to deliver as high a level of public services as is possible with less resources.”

How is delivering a health service with a budget of €18bn microeconomic even with the added weight of “major”?

Health economics is macro.

If it isn’t then what is?

Make it micro.

Give the people back the €18bn you (not you Karl) took from them.

Let them take their own decision with the €18bn.

If you cut your finger years ago you went to the Adelaide, Meath, or Harcourt St. Childrens Hospital. Then some systems analyst/freak got the idea that large industrial complexes was where the money was to be made. Now, we no longer have hospitals we have these horrible, industrial omplexes where even the staff get sick thousands of days every year. By the time you walk from one end them, to the other end, the blood has drained from your face and you are dreading the day you ever have to come in the door as a patient. Winter vomiting bugs! MRSA, “this is an industrial hospital and there is no smoking”. “Thank you for not smoking” as the weary pyjamed patients suck on their last cigarettes outside! It’s hell, never mind the economics micro or macro which really boils down to spend millions or spend billions.

Small is beautiful! Schumacher was right. Small, discrete efficient units each a centre of excellence which delivers fast, friendly hi-tech responses to patients problems.

Watching Vincent Browne earlier on, I can see we are now going to have a full-on drug problem of immense proportions. The government are just shrugging their shoulders. If I want heroin, cocaine, snow, blow whatever, no problem! However, if I want to get some prescription drug, big problem, big cost. The HSE is a shambles. “EMERGENCY” subtitled “Irish Hospitals In Chaos”, by Marie O’Connor is sitting on my desk here and I can hardly bare to read it, its so depressing. Sorry Marie, but It is worse than NAMA, its even worse than the Greece sovereign debt fiasco.

What I will say is, we need to go back to community based medicine, delivered near or at the point where the need for medical intervention first arises. Is that a revolutionary idea? It is a revolutionary idea if you are a HSE superfeakonomics medical expert who dreams about the perfect industrial hospital.

We need to move away from industrialised medicine. Now. Forget Harney. The Craig Venter institute of bio-medicine is coming and this knocking down local hospitals lark, to build empty office blocks, is going to look even more stupid than the building of 350,000 houses and apartments that nobody needed. And this is going to happen within three years but our health service don’t even realise it yet! It will be like the “credit crunch” all over again “we never knew, nobody told us.”

My father died a few hours after spending 5 hours in the back of one of Harney’s ambulances which criss cross the country in search of “centers of excellence”. He was taken on an excursion of one hundred and twenty miles before being deposited in Beaumont. One of the last things he said to me was, “that ambulance must have had square wheels”. Harney is the problem. She reveres medical quango’s, unions and consultants who insist on operating their ruthless monopolies. I agree with all those who say they could deliver the same service with no loss of front line services for 9bn it is simply common sense. But then I guess anyone who is prepared to implement radical efficiencies would save 9bn. That is of course if they are prepared to fight the medical unions and professional monopolies who are also the problem.

Health care is overpriced when the state is involved. The health of the people is even worse… depression and addictions are up.

Sounds like you all need a dose of that old time religion, it might be about all the state can afford soon

I am not sure what to make of Harney. On the one hand I take my hat off to her. There are a few reasons: she has genuinely shown commitment to working to improve our health care system (even if you disagree with how she has gone about it) and has shown determination to stay the course in health – the ultimate poisoned chalice of Irish government – a determination that few of her predecessors had shown. Ministers Martin, Cowen in particular were anxious to get the hell out of health (“Angola”) as soon as they had served their (short) time there. Another reason to applaud Harney is that she has shown a certain amount of steel against the vested interests in Health – especially the pharmacists and consultants. In the end the consultants provided incredible resistance to the reform of contracts and had to essentially be paid off. Still, it was an issue Harney stuck with and the resulting contracts and conditions are a market improvement for the tax payer and health user.

I remain very wary of the co-location project however. I get the feeling it will damage rather than help the public health service.

This will be distasteful to most readers. Please stop reading if you are squeamish or even human ….

Human life has been measured in $ terms for many purposes. Migrants to Austrlia are valued in $ terms based on averages, less health care costs, based on age. Certain medical conditions disqualify, based on cost. We are talking about added years for ill people. The equations can include various factors based on specifics for each patient. Many drugs are “the latest” but maybe no better than the ones out of patent protection and that cost $1 per pill. The new ones may be $100 per pill. Even placebos have a value, if they “work”. Who is doing the hard headed stuff? McCutts! Front and Centre!

[technical note. I’d send this direct to Pat if I could, but I can’t]
My experience is that WordPress automatically removes blank lines. The only think you could try is to insert single-character or

@ Robert

My sympathy for the loss of your father. As everyone who has ever trundled about in them knows, ambulances are badly sprung. At least your Dad was able to keep his sense of humour in the midst of all. That sort of experience is increasingly common in the hospital system. It is the flip side of ‘progesss’.

A budgetary crisis, like the prospect of hanging, concentrates the mind. The Minister appears to have some inkling that her job is not just a matter of finding the funding. It’s about what goes on under the aegis of healthcare, even where clinicians, managers and staff are doing their best to make it ‘work’. The points made by Tomaltach are generally valid, but there is a bigger picture.

‘Health economics’, as currently taught, is part of the neoclassical catechism. A guide for the faithful. A real world analysis of healthcare supply side and demand is manifestly required, but our dependent FDI relationship with Big Pharma puts the topic somewhat off limits for Irish economists.

Irrespective of funding methods, public sector providers can never keep pace with the incessant ‘demand’ for newer, ‘better’ interventions and will always be chasing the game as it is currently structured.

You say:

… ‘some systems analyst/freak got the idea that large industrial complexes was where the money was to be made’

Successful health care enterprises are global, as you will see if you take a look at the brands on hospital equipment. Economies of scale are more and more prominent, and monopoly structures are the norm.

Notwithstanding the respectable standard of Irish medicine, our teaching hospitals follow global trends, as any other road would court professional isolation. Medical education is itself a marketplace, and doctors are its products. We have always exported a lot of docs and nurses and we are going to be doing that in spades now.

The global players are interested in market share. That means downgrading old-style practice and facilities, with their craft ethos, so as patients can be streamed into more ‘productive and efficient’ channels. More ‘clinical motorways’ maximise flows between profit centres. More tests generate more interventions. The less profitable, craft, stuff can go by the back roads. Educating doctors to co-operate with that is all part of the process.

Extracting monopoly rents on patent products is where the serious money is made, and putting a new ‘runner’ through the regulatory hoops is a very high stakes gamble. Although there is often a genuine professional motivation at work, and advances are made, the innovation process is hugely distorted by business objectives. The capturing of the leading lights of the medical profession has obvious consequences for professional practice and traditional craft ethics.

Monopoly means the power to generate and actively construct demand for your product. Taken to its limits, ill health is simply a failure to consume enough healthcare. As with other professional activities, regulation and standardisation tend to accelerate corporate transformation, especially by increasing capital barriers to entry. Heavily indebted medical graduates have limited choices about what they do.

Medical negligence litigation leads to defensive practice, which has the practical (even if not intended) effect of further reinforcing monopoly structures. Direct marketing of clinical interventions to the public further undermines medical autonomy and distorts the marketplace.

The fundamental contradiction, from a public health perspective, is the relationship between profit and health. They are competing, or at least potentially competing, outcomes of healthcare. Monopolies are command economies, even if they have competing internal profit centres, and ‘rational resource allocation’ means rational in accounting terms.

The medicalisation of birth, death and elderly care has rendered them more, rather than less difficult for society to manage. A relentless focus on market share is good business but dubious, at best, for health. Social regulation of industry investment in medical ‘research’ and direct marketing of medical products to the public is long overdue. It’s too easy to use fear and ‘science’ as marketing tools.

@Robert, paul.

Many medical procedures can be best performed by specialists who do little or nothing apart from that type of procedure.

The role of a GP or general surgeon is important and can be provided locally but as technology improves “centres of excellence” or something similar are likely to be the best way of providing services.

Is this “industrialization of medicine”? Yes, but so what? If it drives cost down and treatment quality up, what’s the problem? Ireland’s health system has problems, but I don’t think that providing more centralized centres of excellence would be one of them.

Ireland’s health system is frankly a bit of a mystery to me, but what’s not mysterious is that it needs significant overhaul.

@ Hugh

There is the old story about the mechanic who charged ten and sixpence. Sixpence for turning one screw and ten shillings for leaving the other screws alone.

Specialisation brings undoubted benefits, but it also has limits. The gains from ‘centres of excelllence’ are exaggerated, because the relevant research has been selectively funded. Despite earlier diagnosis, solid tumour cancer outcomes, for example, are, to my knowledge, largely unchanged in 50 years. Apologies to anyone who may find that worrying.

There is no evidence either that medical sub-specialisation has led to cost savings. The contrary is the case, as the grip of monopoly providers is tightened in ‘centres of excellence’. The ‘critical mass’ is not all positive.

The old county hospitals covered most of the bases, including care of elderly, paediatrics, obstetrics, general surgery and A&E. By closing those units, we are benefiting the few while penalising the many, as well as demolishing some of the main planks of the rural economy. That’s a significant linkage.

While curative procedures are important, the main burden of healthcare is chronic disease, where there is no prospect of cure, and conditions have to be managed over the long term. Common things are common, and it is often the case that the optimal intervention is no intervention.

Don’t get me wrong, I fully agree that locally provided medical care will be the best in a wide variety of cases.

Perhaps I should correct what I wrote earlier and say something more like this.

“The role of a GP or general surgeon is important and can be provided locally but as technology improves “centres of excellence” or something similar are likely to be the best way of providing advanced services.”

This can be made effective in a number of different ways, but in the end it’s implausible that a local hospital can be expert in diagnosing and treating everything. The centre of excellence might be – as I understand is the case in parts of Spain – a guy at the other end of a very broadband connection who can diagnose and prescribe treatment, but a local general surgeon can never be as expert at – for instance – hip or valve replacements as a surgeon who is specialised in that procedure.

@ Hugh

Thanks for that. There is a concept in psychotherapy called ‘good enough parenting’. Good enough healthcare sounds right to me.

I guess the proper role of the HSE and the Minister is to broker service provision, so as to avoid the worst clinical, economic and social errors.
In the full recognition that there are competing goods and no perfect outcomes.

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