Some thoughts on the HSE and access to healthcare.

There is one cure for scarcity: abundance. When there is a scarcity of any resource nothing brings down the price quicker than abundance. For that reason a glass of water in the middle of the desert will always cost more than one at our offices in Dublin 2, that is a law as bankable as gravity.

So when we hear that the ‘health system’ is incredibly expensive, then you have to look at what the costs are, and ideas that might help to reduce those costs.

In Ireland 30% of the population have a medical card, almost 1.4 million people in total, and this is costing 3.4bn per annum. Emergency rooms are crowded but 75% of Emergency Department attendances don’t require hospitalization.

At the same time 55,000 people are receiving ‘home help’ clocking up almost 12,700,000 combined work hours. Overall cost of the HSE is €13.7bn and there is an ongoing deficit of c. 1bn Euro to contend with as well.

Pay and pensions is €5.3bn (pensions alone are 10% of that at 524m) but add in non pay costs and Grants to outside agencies and the total cost is 14.2bn, there are additional capital expenditure costs but I don’t think anybody would argue about value for money in the creation of new facilities or purchasing new equipment.

In ‘non pay costs’ you have Doctors fees and allowances which is €489m.

Partial solution? Take ghost estates, or any of the NAMA empties and make one house into a 24hr GP service, then get 6 empties and offer doctors from around the world the chance to come live in Ireland, they get a visa, a house (that they are gifted 50% of at the end of the period) and they earn the average industrial wage, in return the medical centre (the first house) is manned 24 hours a day, they can pick how to alternate shifts amongst themselves, a minimum service level agreement is put in place, they could even (when two doctors are on shift) make home care calls.

Having a 24 hour medical facility in your estate is a good thing, it might help shift other properties and unlock the billions in VAT tied up in the system while giving social value.

People need standard medical care and let the hospitals deal with hospital cases, if 75% of visitors don’t need admission it means that too many people are going to the emergency room when they don’t need to – or there is no alternative. This idea makes that alternative.

Hiring lots of doctors will also push down the insane hours most doctors are working, while providing more points for medical care, essentially flooding the system a little, but that isn’t a bad thing given that healthcare has a constrained supply.

NOTE: The most vocal critics of why a plan like this wouldn’t work will be the medical industry themselves who quite rightly fear the undercutting that such competition would bring. Excuses will range from job losses and de-skilling to that of ‘depriving developing nations of their doctors’.

Back of Envelope Costings:

5 NAMA houses: €500k
Assuming the doctors see 20 patients a day at €15 a head you have an offset of €300 per day which is €109,500. A 5yr loan at 2.5% would cost 106k p.a. meaning the houses would wall be paid for at the end. And of course, at the end one or two of the doctors could opt to take over the practice (in which case the other 50% of the property is gifted to them giving 100% ownership) – with the right to sell their properties (and the practice building) after a further 5 years. So the only cost over and above this is that of providing the industrial wage and whatever expenses go with it. A large portion of this would likely be covered by patients as 20 a day is a conservative figure for a medical centre.

This might seem unusual, but what you are doing is taking an abundant asset (property) and turning it into a vehicle for releasing a restricted supply (medical attention) and aligning incentives so that a doctor can have a low cost life by staying put.

The wages would come in c. €220k p.a. (a small DC pension thrown in) giving a total cost of €1.1m over five years. However, this would come down a little if several of the properties are subsequently sold (after year 5). Even taking the idea of it being a flat €1,000,000 for 5 years, that gives a huge amount of medical access for €200,000 p.a. which means you could create 500 such centres for about €100m yearly or 1/137th of the total HSE budget, a worthwhile experiment perhaps?

The other option is to make a Land Value Tax that incorporates local a local medical levy – even if it was 5% of whatever the LTV is (so if your tax was €1000 p.a. then €50 would go towards the financing of the medical centre in your area).

The idea would be to make a non-profit option for giving people rapid access to medical attention, and then having a graduation process where you can be referred up the chain to a hospital if needs be.

Simple rule: If you got to the emergency department and it isn’t an emergency then you pay €200, that goes for EVERYBODY, except maybe the unemployed/aged who would instead pay €50.

If you went to the emergency department via a local health centre then there is no charge for admission (as above), and the fee for seeing a doctor is minimal, but not free ‘free’ anything is not respected and there is an endless level of demand for medicine and medical attention, the experiment isn’t with a view to finding that limit, for any contraries: all I ask is that you do a costing to justify your opinion.

Like many ideas, this one has its flaws, but it may be worth trying to thrash out if the end result is the ability to see a doctor any time day or night at a reasonable cost. Failure to do so means society pays the price!

One Comment

  1. Mossy

    And 70% of monies going to the HSE go on payroll. I would like to know what the figures are like across europe.

Trackbacks for this post

  1. Twitter Trackbacks for Irish Mortgage Brokers | Mortgage Brokers Dublin [mortgagebrokers.ie] on Topsy.com

Leave a Comment

Awesome! You've decided to leave a comment. Please keep in mind that comments are moderated.