John Gormley

Deputy Gormley: Do I detect a deep frustration on the part of the authority that the Tánaiste has not implemented its recommendations (if the Tánaiste were to decide to break VHI into four small companies, in order that there would be five companies of equal size in the market plus a very small VIVA)?

Professor Wood: I do not think so. With a committee of five people taking the decision, it only needs one member to change his or her mind for the decision to swing the other way. We are fairly even-minded about it.

Deputy Neville: It was a 3:2 decision.

Deputy Gormley: The authority says it is not a question of “if” but “when”. Is risk equalisation inevitable?

Professor Wood: It is inevitable. If one wants community rating, one must start risk equalisation eventually.

Deputy Gormley: When Professor Wood says the authority is even-minded, would he not agree that it is accepting the arguments of VHI in this regard? I have their arguments here and they are more or less the same as those the authority is putting to the committee.

Professor Wood: Not at all. If we had been here a year ago, we would have been putting forward the case BUPA gave us. We examine the figures, we are independent and unbiased. None of us has any connection with any of the insurance companies. We examine the issue afresh every time and consult with experts. The first two times we decided not to recommend it and the second two times we did. I am not terribly worried about what the Tánaiste does, as it does not make a great difference in what we do.

Deputy Gormley: How would Professor Wood describe the authority’s relationship with BUPA and VIVAS?

Professor Wood: Very good.

Deputy Gormley: Has Professor Wood been lobbied by politicians from either side of this debate?

Professor Wood: Not at all. I am almost five years in office and have never been lobbied by any politician of any party. May I ask if any politicians have been lobbied by any insurance companies? It is pretty evident in some cases.

Deputy Gormley: Has the authority made an arrangement with IFSRA? A statutory instrument was produced last year.

Professor Wood: Is this with regard to new entrants?

Deputy Gormley: Yes.

Mr. Ryan: Does the Deputy mean a memo of understanding or something such as that?

Deputy Gormley: Yes.

Mr. Ryan: We are in discussions with IFSRA concerning one.

Deputy Gormley: When will it be completed?

Mr. Ryan: I hope shortly but it is a matter for the two authorities.

Deputy Gormley: I thank the delegation for their attendance. Does the delegation share my view that we have become a very car dependent society — perhaps the most car dependent in Europe — and that this results from poor planning? Does it agree that the more car dependent we become, the more accidents that will occur? As a result of poor planning, people are now driving into Dublin from places such as Arklow and beyond and this is dangerous. We need to deal with the problem of poor planning in the first instance.

An important issue was raised by Senator Feeney. The technology of satellite navigation now exists, which will show, if people agree to its use, whether a vehicle is speeding. A pledge is fine but in my view it needs to be backed up by some form of action, such as ensuring that people who are given reduced rates of insurance obey the speed limits. The use of this technology would help reduce the number of road traffic accidents.

I am concerned about the culture of the car. I have watched Mr. Jeremy Clarkson’s show in which he drives cars. I watched his programme the other night and he was driving a car at 120 mph down an autobahn. This is a way of glamorising speed. Anything can happen when driving at that speed and accidents will occur. We must find a way of deglamorising speed because it has become a real problem with regard to young males. I hope the delegation will consider this problem.

I reiterate that satellite navigation is technically possible and could provide a solution. Some people regard it as big brother, in that it monitors what people in a car are doing and can identify the location of the car. This may be the case but the upside is that it may reduce the incidence of speeding.

Deputy Twomey: The pledge is a good idea but I understand the difficulty of making it work. Sometimes the pledge is taken voluntarily and encouraging people to do something voluntarily has more long-standing benefits than using law enforcement, whether through the police or insurance companies, to change their way of thinking and driving habits. I wish Bishop Walsh the best of luck with the pledge but there will be many hurdles to jump before it is achieved. It is difficult to change minds, as we have seen with penalty points. When they were no longer a focus, bad driving habits returned very quickly.

In my experience it can take six to seven months to get someone into the National Rehabilitation Clinic from an acute hospital. Some of the figures Dr. Delargy gave were interesting. Is speed still the main cause of the high velocity injuries Dr. Delargy described or do lack of safety belts and cars coming off the road and rolling over cause them? Would proper law enforcement, with gardaí on the roads where most of these accidents occur, rather than where drivers speed, make a significant difference?

We need to consider some simple practical points if we are to effect any change. It is pointless to talk about barriers on the motorways and the sides of the roads because they will take so long and be so expensive to erect that it simply will not happen. In the short term gardaí could be placed on roads where accidents are most likely to happen and we could support that measure.

Dr. Delargy said the number of people suffering from injuries admitted to the National Rehabilitation Centre has fallen. Is that because they cannot get in owing to the increase in violent assaults? How significant is the issue of violent assaults? I have noticed a change in the past decade in that perpetrators of an assault pulverise a person and sometimes the two parties do not know one another. The incident might be a random assault on the street.

There is also the phenomenon of kicking people severely in the head. The perpetrator may feel the victim will not be able to identify him or her because of the resulting amnesia. This seems to be becoming more prevalent but that may be because we hear more about such attacks whereas Dr. Delargy has the stark facts and figures to reveal the significance of these assaults.

Deputy Devins: I wish to raise an issue concerning the committee’s publication of its investigation into the Travers report on nursing home charges. It is reported in the media that two members of this all-party committee held a press conference yesterday at which serious allegations were made about other committee members. Words used, such as “bullying” and “censorship”, carry a distinct and implicit nastiness. Other members and I are not prepared to allow unfounded and emotive language such as this to go unanswered. It was political spin of the worst kind, displaying a complete disregard for and insult to members.

The emptiness of these false claims is displayed by looking at the facts. The committee met in 14 sessions and spent over 35 hours debating the Travers report. We have interviewed all the leading people named in the report. On two occasions, we have met the author, Mr. Travers. The committee was asked to consider the legislative and administrative implications of the report, its findings and conclusions. Despite the naked ambition of certain Opposition members, who wanted to make a political killing, they were unable at any time to show that the contents of the report were wrong. The Travers report censures politicians and her advisers, a point made to the committee by the Minister and her advisers. However, the then Minister was not informed of the implications of the crisis and the subsequent disappearance of the request for definitive legal advice from the Office of the Attorney General. At no time was any member of this committee given any evidence which contradicted this vital point.

I wish to make a number of points in respect of yesterday’s highly unusual press conference. Fine Gael and Labour published what they called 12 “conclusions” which they say were not included in the report. These are not conclusions. They are simply proposals brought forward by the Opposition. At no stage did the committee agree to those proposals and to call them conclusions is to confer on them a status they do not warrant.

We live in a democracy. All over this country, people meet in clubs, community gatherings, societies, etc. When a proposal comes before any group of people, it is debated and, if possible, agreement is reached. If no agreement is possible, the proposal is put to a vote. That is the foundation stone of our democracy, where the result of the vote is accepted. That is what happened in the final committee meeting during its investigation into the Travers report.

The failure of the Opposition to accept the democratic wishes of this committee reflects badly on it and displays petulant and child-like behaviour which covers up for its frustration at failing to achieve its narrow partisan aims. Do Opposition members accept the democratic structures under which this committee operates or do they wish to have a fascist dictatorship under which their narrow sectarian viewpoint must prevail? If they do not accept democracy, let them remove their names from the report. This will reflect their inability, despite three months of questioning, to expose major flaws in the Travers report.

Deputy Gormley:  Unlike Deputy Devins, I do not have a prepared script. However, I will comment on some of the issues he raised. I did not take part — nor was I asked to do so — in yesterday’s Fine Gael-Labour press conference.

Deputy Devins:   Is that an indication of things to come?

Deputy Gormley:  I do not know. Deputy Devins said he was interested in the facts and I am relating them.

I do not argue with Mr. Travers when he concludes that there was an administrative failure and that there was greater culpability on the part of civil servants than on that of those in the political domain. No one argues with that assertion. However, Mr. Kelly has taken the rap. He has fallen on his sword. The problem I and other Opposition members have is that no responsibility was accepted in the political domain.

When the committee interviewed Mr. Travers on two occasions, he made it plain that the then Minister should have probed further. The then Minister did not do so. I ask Deputy Devins to consider that if his office operated in the same way that the Department of Health and Children did in this instance, some of the people who work there would have been sacked.

Under current structures, the Minister is in charge of the Department and then come the Ministers of State and special advisers. One of the Ministers of State said that he read the relevant material and realised that it had serious implications. However, the then Minister — Deputy Devins would use this an excuse — was not informed. Ignorance has, therefore, become an excuse.

Deputy Devins:  That is not being said.

Deputy Gormley:  Claiming ignorance is what gets the Minister off the hook. Is that good enough? If the Deputy asks himself the same question, he must reach the sincere conclusion that it is not. When one is Minister of the Department, one cannot claim innocence as a result of ignorance.

What are the legislative and administrative implications of this report? Do they mean that a Minister can get off the hook because he has not informed himself? If that is the conclusion, this is a very bleak day for democracy and the political system in this country. It is as if the captain of the Titanic said that nobody told him about the iceberg. Is that the excuse being used? The captain of the ship is supposed to go down with it. This captain has refused to take responsibility.

After three months we have come to the same conclusions that were reached in the Travers report, namely, that Mr. Kelly was totally responsible. I find that difficult to accept. We must ask again what the function was of everyone, including the Ministers of State, involved. For example, the Minister of State, Deputy Callely, said he informed the Taoiseach. Where was the follow-up in all of this? A file went missing and there have been conflicting reports about it. One person said it was definitely in the Minister’s office, while someone else stated that they were unable to recall it being there. That contrast is interesting. As I said to Mr. Travers, there seems to be greater certainty on the part of the person who said she definitely saw it.

I welcome the part of the report which states that the Minister and Ministers of State met very infrequently. What way is that to run a Department? The report says that they met on three or four occasions but minutes were not kept so we do not even know if they met that number of times. Another member referred to their assistant. If an assistant did not tell a Deputy about major issues occurring in his or her office, he or she would be, and rightly so, extremely annoyed. Nobody seems to have communicated anything in respect of this matter. Three months after commencing our deliberations, we are back where we started.

People must understand our deep frustration in respect of this matter, particularly as we have reached these conclusions. What are the legislative and administrative implications? If one is a Minister and one does not inform oneself, one is better off. If one sees no evil or hears no evil, one can have a great career and possibly become Taoiseach at a later date. That is unacceptable.

I am very disappointed at the conclusions. I hope that they are not a sign of things to come and that the committee will not break down along partisan lines in the future. I say that because we must discuss other important issues and I hope we can do so in a reasonable atmosphere in which a consensus can be reached. Due to the fact that the stakes are so high with regard to the report before us, it is clear that we will not be able to reach such a consensus. That is regrettable.

Deputy Gormley: Does the Tánaiste agree that the file tracking system in place in the Department which we visited yesterday was slipshod? Is she satisfied that a better system has been put in place?

I wish to return to the matter of the file given to the person who is now the Tánaiste’s private secretary. I understand the civil servant in question has a clear recollection of the matter. While he has said he cannot recall the event in detail, does the Tánaiste agree there is a greater degree of certainty on his part? That is why this evidence is crucial. In terms of us making a judgment on that, one would have to believe the person who has the greater recollection and the greater certainty.

Deputy Harney: Deputy Gormley asked me about the Department and I know members were there yesterday. We have a new Secretary General who has set up a new division to deal with the elderly and eligibility issues. He is reorganising the management team in the Department. We hope to move from Hawkins House and those that were there yesterday will have seen that it is not an appropriate facility for a modern Civil Service. In that context we need to get outside advice regarding modern technology that would enable us to track issues in a better way than the file based system we have at present. On my desk at the moment there must be 50 or 60 files. It is not true that my current private secretary is the person referred to. The person does work in my office and is the number two there but I will not decide that one is right and another is wrong or value one person’s view higher than another’s.

Deputy Gormley: One person is more certain than the other, clearly.

Deputy Harney: We set up a process to inquire into this and it is only fair to accept its outcome and the judgment of the person who was asked to carry it out. Mr. Travers is coming later.

Deputy Gormley: One person has a very clear recollection of it and the other does not. Surely that tells the Tánaiste something, does it not?

Deputy Harney:  It is a matter for the Deputy to talk to the persons involved.

Deputy Gormley: We have talked to some of them but we cannot talk to everyone.

Deputy Harney:  The Deputy should talk to whomever he feels it is appropriate to talk to.

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Chairman: Deputy Gormley made the point that huge emphasis was placed by the person who said they saw something, but greater emphasis was placed in terms of the person who did not see something. Less than 24 hours ago, we went to that office and people have a notion of there being a large number of staff there.

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Deputy Gormley: I thank Mr. Travers for coming before the committee again today. On page 15, paragraph 4, of his transcript it is stated that “The Department had indicated elsewhere to me”. However, earlier I believe he said “The Department had not indicated to me”. Is the version in the transcript correct?

Mr. Travers:  The transcript is correct.

Deputy Gormley: On the question of the advice given on whether the charges were illegal and whether, as recollected by the relevant civil servant, there was a need to change the legislation, Mr. Travers stated that he was informed that such charges were legally defensible. In the defence he put forward, Mr. Travers has traced the history of the advice provided over many years. Has he seen any documentation or evidence to suggest that officials believed, at any stage, that the charges were illegal?

Mr. Travers:  I refer the Deputy to the section in the report that deals with an internal departmental memorandum of 1982.

Deputy Gormley: What is the reference?

Mr. Travers:  I do not have the page number but paragraph 3.16 states “there is no legal basis whatever for informally changing a person’s status from full to limited eligibility”.

Deputy Gormley:  I wish to return to the question of political responsibility. In layman’s terms, the Minister is the captain of the ship and is obliged to go down with it. Does Mr. Travers agree that the former Minister, Deputy Martin — who we might describe as the captain of the Titanic— got into the lifeboat with the women and children and then complained afterwards that no one told him about the iceberg? There is a gap here between political responsibility and the maladministration to which Mr. Travers has referred. I appreciate his coming here today and offering a very good rebuttal but there is no question that the gap to which I refer exists.

Chairman:   Can Mr. Travers take that bank of questions first?

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Deputy Gormley: To follow on from what Deputy Twomey said, Mr. Travers is saying there is an inconsistency in that the phrase “the need to change legislation” is inconsistent with the view within the Department at the time. Is that correct?

Mr. Travers:  Yes.

Deputy Gormley:  Can Mr. Travers comment on the annexe covering long-stay charges — the summary for deliberation?

Mr. Travers:  What page is that?

Deputy Gormley:  It is in the annexe. It is a draft. It is in Annexe 6.

Deputy Devins: Is the Deputy referring to the report or the presentation?

Deputy Gormley: I am dealing first with Mr. Travers’s rebuttal, which is on page 15, and also with Annexe 6. The annexe covers the current legal deficiencies and paragraph 1.2 contains the phrase “the need for change”. It is not a big distance to move from saying that to saying “the need to change the legislation”. If one put the two of those together, that is what one would get. Is it tenable that is precisely what the civil servant saw?

Mr. Travers:  That there was a need to change the legislation?

Deputy Gormley: It is not that inconsistent, is it?

Mr. Travers:  That would conflict with many other things that have been said, namely, that they were of the view that this was a matter that could be dealt with in the context of the wider eligibility issue and that there was no particular need at that point to bring in legislation. The Deputy may recall that a draft memorandum and heads of Bill were prepared in respect of this issue in 2002 and it was decided that there was no need to run with it at that point in time.

Deputy Gormley: This is dated 15 December 2003. Therefore, it is closer to the period concerned. It seems entirely consistent——

Mr. Travers:  It would have been the same memo for Government-——

Deputy Gormley: Mr. Travers takes my point that this seems entirely consistent with the recollection of the civil servant. The phrase used, with which Mr. Travers finds an inconsistency, is “the need to change the legislation”.

Mr. Travers:  The point I was trying to make is that if one looks at the documents — the covering letter, the background note and so on — that were sent to the Attorney General at the time, one would note that there is absolutely nothing in them about the need to change the legislation. Questions, seeking the advice of the Attorney General, were asked. There is absolutely nothing in any of them about putting a proposition to the Secretary General that the legislation required or needed to be changed. That is the point I am making. However, the document was described as a set of documents about the need to change the legislation. That was a significant point for the reasons I described earlier. There is all sorts of significance attached to a belief that the Department might have held in regard to the need to change the legislation in advance of having received any advice from the Attorney General on it. In a sense, I do not need to go into the implications of that; they are fairly clear, if people want to draw them.

Deputy Gormley: I thank the delegation for coming before us. In the presentation by the VHI it was stated price-following was designed to maximise profits which would lead to windfall profits for BUPA Ireland. We were told profits would be above average, €38 million in 2004. To what extent is BUPA Ireland generating windfall profits? How does Mr. O’Rourke respond to the claim made by Mr. Sheridan when he came before the committee that there is no transparency in its finances? When Mr. O’Rourke talked about a cross-subsidy, he mentioned that a lot of plans were incontestable. Is this a matter the Competition Authority should examine?

Mr. Hayes: I will take the question on contestability while my colleague, Mr. Niall Devereux, will respond to the question on windfall profits and price-following. The Competition Authority has not yet examined the issue of health insurance. On contestability, the facts speak for themselves. We have hardly any products sold at that level of the market.

Mr. Niall Devereux:  We welcome the opportunity of coming before the joint committee to set the record straight. On price-following, allegations have been made that BUPA Ireland is engaged in this practice to maximise profits. Mr. O’Rourke has mentioned BUPA Ireland is a not-for-profit organisation. It is a mutual organisation to the extent that if it were wound up, profits would have to be given to like-minded charities. This does not seem to gel with the allegations made.

When we entered the market in 1997, a family of two adults and two children would have enjoyed savings of €44 on the cost of the entry plan of the VHI. Eight years later the price differential has increased to €154, a three and a half fold increase. This does not gel with the allegation of price-following.

At the meeting last week this matter was explained and the Deputy has given a good summary. Allow me to use the example of a dominant insurer such as the VHI. If it were to increase its prices by 10% and BUPA Ireland’s claims costs were to increase by 6%, BUPA Ireland would increase its premiums by 10% in order to maximise profits. Clearly, that is not the case.

If one’s revenue increases by a figure greater than one’s claims costs, profit margins will increase each year. BUPA Ireland has been involved in the market since 1997. As finance director, I can assure the joint committee that its profit ratio has fallen every year since we came to Ireland. It fell in 1998, 1999, 2000, 2001, 2002, 2003 and 2004. We do not see this as a threat to its stability, rather we see the need to provide for greater efficiency to ensure market instability does not put our future under threat. Price-following is not happening, at least not in BUPA Ireland.

We welcome the opportunity to set the record straight on the issue of windfall profits. The joint committee has received a schedule from the VHI which is grossly inaccurate. Our competitors do not know the number of claims that BUPA Ireland paid in 2004 and an arbitrary figure seems to have been applied. The number of claims is materially misstated.

Basing a schedule of profits on claims paid is not only misleading but also in breach of accounting principles whereby revenue and costs must be matched. The schedule does not do this. It shows that BUPA Ireland enjoyed windfall profits of €38 million last year. After tax, the profit we achieved in Ireland, adding all operations together, was €20 million. It is laughable that the VHI suggests we enjoyed profits over and above the norm. This figure is twice the profit we actually made. I hope the joint committee dismisses the document presented last week. If anyone wishes to receive further information on our profits, we would be pleased to accomodate him or her.

Mr. O’Rourke presented the cumulative profit after tax figure of €70 million generated since BUPA Ireland entered this market. If we open up the VHI’s accounts for 2004 and compare the profits it generated, we can see that it generated more profit in one year than BUPA Ireland did in eight in this market.

We have a solvency requirement. Of the cumulative profit figure of €70 million, €55 million is set aside to underpin solvency and the future of our business. After eight years we have €15 million of free profit, that is, profit that can be invested in healthcare. That is the philosophy that drives our organisation. On a like for like basis the VHI generated a profit figure of €75 million in that year but it does not have a solvency requirement, an issue VIVAS is taking to the European Court. The accounts presented today represent a fair view of the activities of BUPA Ireland since we entered the market.

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Deputy Gormley:  I thank VIVAS for coming before the committee. The difficulties of competing with a State player such as VHI were referred to earlier. What might be the consequences for the market if VHI were privatised, in the delegation’s view?

Mr. Hayes:  Operating risk equalisation in a market with a dominant player is not conducive to good competition. A market needs to be created with a number of like-sized players where there can be vibrant competition. A pure privatisation of the VHI will not address the dominance problem. One of the advantages of the VHI being in State ownership is that it is within the gift of the State to create immediately a vibrant marketplace. If the VHI were privatised, that option would be lost.

Deputy Gormley:  VIVAS Health would obviously favour the introduction of life-time community rating, as exists in Australia. What would be the effect of introducing that?

Mr. Loughman:  The experience in Australia was that there was a large increase in the number of insured lives across all age profiles. If the same thing were to occur here, it would mean that there would be more balance in the age profiles of the competitors in the Irish market. Assuming that there were only three insurers when it occurred, we would tend to get a more equal spread of those new members coming into the market, which would bring a more balanced age profile. We obviously have no difficulty with that.

Deputy Gormley: I put a hypothetical question to the Health Insurance Authority when its representatives appeared before this committee. If it could occur, would VIVAS Health take high risk patients rather than taking money from people through risk equalisation and giving it to VHI? BUPA representatives said they would be happy to do that.

Mr. Hayes:  Our whole philosophy is to offer our products to people of all ages. We are in the business of trying to increase our market share to create more dynamic competition. If there were an opportunity for VIVAS Health to take a proportional amount of VHI customers, then we would engage with that option.

Deputy Gormley:  Regardless of risk profile?

Mr. Hayes:  I do not think a solution to the problem is to transfer all the older people from one insurer to another. That amounts to shifting deckchairs on the Titanic. It is more important to create a dynamic market with people of similar age profiles across the portfolio. If there is a chunk of the VHI book available to us which will create that dynamism in the market, then clearly we will be interested.

Deputy Gormley: Does it not make good business sense to attract the people with least risk? This goes to the core of the argument.

Mr. Hayes:  I have been asked a few times if we had looked at the dynamics of the market before we joined it. I always confirmed that we did so. We were aware of community rating and we welcome it. We are not suggesting any change to community rating and all our products are designed for and are available to people of all ages. Any suggestion that because we are a for profit company we are proposing a risk rated market is totally without foundation. We are very happy with community rating within the marketplace.

Deputy Gormley: I will go back to the Ombudsman’s report. Was it discussed at length in the Department at the time?

Mr. Smyth:  It was, because we received a legal opinion on the Ombudsman’s report, particularly on the issue of entitlement in the health services and there was much discussion about that issue in the Department at the time. The Ombudsman had raised fundamental issues about entitlement, that is to say, access to services, both in private nursing homes and to public beds. However, that legal advice centred on entitlement and did not divert Ms Heuston from that issue. Much attention was given to this issue by the Department at the time.

Deputy Gormley:  When Ms Deirdre Gillane appeared before the joint committee, she stated that when the Ombudsman’s report was discussed, the concerns about illegality were found to be unwarranted. Was that the case?

Ms Roisin Heuston:  The Ombudsman certainly raised the issue of eligibility versus entitlement. That was addressed in legal advice we received from the Office of the Attorney General, which pointed out that they were two clear, distinct and separate issues. One may be eligible for services but that does not automatically convey an entitlement.

Deputy Gormley: Was that the legal advice from the Office of the Attorney General?

Ms Heuston:  Yes.

Deputy Gormley: Did it centre on that?

Ms Heuston:  Yes.

Deputy Gormley: Did it deal with the charges issue?

Ms Heuston:  No. There are two separate issues. The Ombudsman’s report was concerned with private nursing home charges and the legislation pertaining to them. The only time it veered in any way towards the public service was in its views on eligibility versus entitlement. However, the report itself was an examination of charges and other issues concerning private nursing homes.

Mr. Smyth:  The entitlement issue concerning public beds only arose as part of a broader view taken by the Ombudsman about entitlement to services which covered both public and private beds.

Deputy Gormley: Does the authority believe that risk equalisation could take another form? Rather than having the transfer of money, could there be a transfer of high risk patients between the various insurers?

Professor Wood:  That is an extremely interesting proposal. Unfortunately, it is not one that we or the Minister can implement. I understand what the Deputy is saying. If one insurer has 20% of the market share, it should have 20% of all good patients. Will one go through the VHI member list, taking every fifth member and send them to the competitor? How can this be done fairly and allow consumer choice?

Deputy Gormley: One could take the high risk patients. A formula has been worked out for the MEP, market equalisation percentage.

Professor Wood:  I agree it is an alternative method of solving the problem. However, I do not know how one can force people to move to a particular health insurer.

Deputy Gormley: I fully accept the need for community rating. However, it is unfair that an individual who joins a scheme at 45 of years pays the same as the individual who joined at 25 years of age. I understand a 75 year old, provided he or she joined at 25, should pay the same as the 25 year old member. However, does this payment gap between the 25 year old and the 45 year old need to be examined?

Professor Wood:  As we said in reply to Deputy Twomey, we have sent a paper to the Department of Health and Children supporting the introduction of lifetime community rating. The authority’s position is that it is a good idea.

Deputy Gormley: How would it work?

Professor Wood:  In practice, various formulae have been proposed. It could be 1% extra each year over the age of 25 years when one joins for the first time.

Deputy Gormley: When will the paper be published?

Professor Wood:  It has been sent to the Department and is on its website.

Deputy Gormley:   I welcome the delegation to the joint committee. The Minister stated in July 2003 that VHI wanted to be privatised. Does Mr. Sheridan still see privatisation as desirable? What share of the company could the employees expect?

Mr. Sheridan:  I wish to make the obvious point that this has nothing to do with risk equalisation. The issue of the future corporate structure of VHI——

Deputy Gormley:  Does Mr. Sheridan think that risk equalisation might assist it? If risk equalisation is introduced it might push privatisation. Is VHI waiting for the introduction of risk equalisation before privatising?

Mr. Sheridan:  No. I will answer the question, but in terms of health insurance, it does not have anything to do with risk equalisation. The position of VHI on its future corporate structure is that a changed is required. An agreement in principal was reached with the previous Minister that VHI should move from being a statutory body to being a semi-State company. Many technical reasons exist for such a change which would be seamless in that people would not recognise the difference, but which would make a major difference to our ability to carry out and sustain a strategic business approach to our business.

We do not have a view on privatisation. We accept this is a question for the Government. We would be happy to go from being a statutory body to being incorporated as a semi-State company. We have views which we have made known to the Government. I do not wish to go into them because the question is totally theoretical at present, given that we have no indication that the Government wishes to go down that road. If the Government decided on privatisation, we would want to enter the debate as to its appropriate form. However, our position is neutral on the issue. We have views on how it should be done, if it were to be done, but we are quite happy to stay within the public system. Our concern is not with the ownership of the company but with our ability to carry out a strategic business plan.

Deputy Gormley: Is the Chairman of VHI not on record as being in favour of VHI privatising?

Mr. Sheridan:  Some years ago, in the context of the publication of a White Paper which also addressed the issue of corporate structure and privatisation, the VHI board stated publically that they favoured privatisation. Since then however, we have been looking at what is essential and what matters in terms of the company’s business. The question of who owns the company is not what matters because one way or another, we exist to look after our members. We do not wish to move away from that. We want to be able to have a sensible strategic approach to running the business, which can be accommodated through incorporation as a semi-State company.

There are other issues that remain problematic such as VHI remaining in the State sector. There are conflicts of interest between the Government’s role as a provider and policymaker and its role as owner. We believe these issues must be resolved by the Government rather than by us.

Deputy Gormley: What are the implications for the market and VHI if BUPA wins its case in the European Court of Justice.

Mr. Sheridan:  I would be more concerned about the implications for community rating. Community rating is not sustainable. We cannot charge a community rated price to our members and remain viable. We charge the community rate and produced a very low price increase in 2004 because we decided that our members were entitled to pay a community rated price in a community rated market. We will lose money this year and if we continue to charge a community rated price in this marketplace, which appears reasonable and what our members are entitled to, we will not be viable and will lose money. It is a totally cynical exercise. I do think that BUPA will win its case because——

Deputy Gormley: Would it be correct to say that if VHI continues to lose money, it will go out of business?

Mr. Sheridan:  Of course we will go out of business but our argument is self-evident. Community rating cannot exist in a competitive market if it is not sustained by sharing the risk. Otherwise, the market says that community rating is desirable but it wants VHI to charge its members a rate based on its community, while other health insurance companies are able to charge rates based on their communities. There will be a large difference between VHI’s prices and those of its competitors because VHI has older members and its competitors have younger members. Even a child would see that this is not a sustainable arrangement. We are simply facing up to the fact that this type of community rating is unsustainable, which is what all the experts have concluded.

Deputy Gormley:  Why has the Government not acted on this in the last eight years?

Mr. Sheridan:  It has not acted because of the efforts of a very effective BUPA lobby, which has used every means at its disposal.

Chairman: What methods has the BUPA lobby used?

Mr. Sheridan:  Before I joined VHI, I was a guest at the British embassy where the embassy was openly lobbying on behalf of BUPA. The Government clearly wants competition, as does VHI and everybody else. BUPA says that it cannot compete in the market and that it will leave it. Last week, we apparently witnessed a sensible approach being adopted for the first time when the HSA hopefully appeared ready to recommend the introduction of risk equalisation. BUPA suddenly released its figures, of which it had previously deprived the market by refusing to publish them. These figures show that BUPA will lose money if it is made contribute towards community rating. This is complete nonsense. Of course, BUPA will lose money if it is charging a premium based on its younger membership and is not contributing towards the cost of the risk in the community. In the same way, VHI will lose money if it charges a real community rate and does not have receipts from risk equalisation. All health insurance companies will lose money if they charge community rating without risk equalisation. If VHI or BUPA do not increase their prices and take on the community risk, they will lose money. BUPA also needs to become more efficient.

Deputy Gormley:  So if we do not have risk equalisation, we will not continue to have community rating and it will be the end of VHI.

Mr. Sheridan:  Yes, that will happen.

Deputy Gormley: Mr. Sheridan said that prices are now higher despite perceived competition. Is he saying that we are not witnessing real competition? Can he explain the reason for higher prices?

Mr. Sheridan:  I accept the current mantra that competition is good, provided competition benefits consumers. The way competition has been introduced in the private health care market has not benefited consumers because it has resulted in higher prices. Where have BUPA’s profits come from, if not from Irish consumers? Why are BUPA’s profits so much higher in Ireland than in the UK? They are higher because Irish consumers pay more than they should. It is easy to see that if one attacks the younger members of the population, choice is not as effective as it might be. So risk equalisation is the antidote to the anti-competitive nature of community rating.

Deputy Gormley: So we will get lower prices with risk equalisation.

Mr. Sheridan:  The introduction of risk equalisation will serve to reduce the rate of increase in prices. The drivers of price increases are such that risk equalisation will not reverse them but it will slow them down.

Deputy Gormley:  It will slow down the increase in prices?

Mr. Sheridan:  It will slow down the rate of increase in prices.

Chairman:  The point Mr. Sheridan is making is that there is competition in the market but he is not really bringing in VHI’s financial strength. Is it true that VHI’s total reserves at the end of February 2004 were €330 million?

Deputy Gormley: I want to focus on the role of the special adviser. In answer to previous questions the witnesses spoke about that role. In Travers a distinction is made between administrative and political responsibility. Based on their previous responses, do the advisers see themselves as being in the political category?

Mr. Mannion:  I did not regard myself as being in either category. Basically we were working on the policy issues most of the time. In the role of working closely with the Minister one tends to move into the political area from time to time as regards specific issues. Some members of this committee have been included in delegations to meetings about policy issues that I attended. Such issues were politically driven as well. Therefore, one cannot absent oneself on every occasion because it is not purely a policy matter.

Deputy Gormley: I am trying to get a handle on this, not having been in government. Are advisers associated with the Minister in any way? Are they party members, or what?

Mr. Mannion:  I have been a civil servant for 30 years. I am not a member of a political party.

Deputy Gormley: Is Ms Gillane’s position the same?

Ms Gillane:  I am not a member of a political party, but I have affiliations to the Minister, Deputy Mícheál Martin, and his party, meaning that I am loyal to Fianna Fáil.

Deputy Gormley:  There is nothing wrong with that. Would that apply, as well, at election time?

Chairman: Deputy Gormley has put his finger on it. It is good to hear someone say what are her affiliations and be recognised as well.

Deputy Gormley: Yes, that is fine.

Deputy Gormley: Did Ms Gillane follow Deputy Martin, then, from the Department of Health and Children into his new role as Minister for Enterprise, Trade and Employment?

Ms Gillane:  We are both employed as special advisers in the Department of Enterprise, Trade and Employment.

Deputy Gormley:  At election times as well, do advisers assist the Minister? I am trying to clarify what is the role of special advisers because it seems to me that they are involved more in the political rather than the administrative arena.

Deputy Neville: There is nothing wrong with that.

Mr. Mannion:  The last election is a case in point. During the campaign I worked in the Department on the various policy issues and was not involved in the election campaign.

Ms Gillane:  I took annual leave prior to the general election in 2002, for two or three weeks, to assist in constituency work in Cork.

Deputy Gormley:  From my perspective the adviser fits more into the political rather than the administrative side of the arena. That is my take on it, but we have something to reflect on, for the report.

____________________________________________________________________________________________________________

Ms Gillane:  November 2000 [Ms Gillane said her role dates back to 2000].

Deputy Gormley: The health strategy was launched in 2001, approximately one year later. A column in The Irish Times of today makes great play of the fact that there was a section in the strategy dealing with the long-stay charges. It says in paragraph 36, chapter 5, that the legislation withdrew provision for a clear framework for the financing of long-stay care for older people.

Ms Gillane:  As part of the health strategy there was a steering group and a project group and many subgroups were involved apart from NGOs and various other bodies. There was a group on eligibility which discussed a range of issues such as medical cards and a rights based approach to hospital care. It also discussed the Health Act 1970 and the 80%-20% in acute hospitals and access to care for the elderly. Members of that group would have included Department of Health and Children officials, representatives of the National Economic and Social Forum, the Irish Congress of Trade Unions, VHI, the Irish College of General Practitioners, the Irish Nursing Homes Association, IMO and the Society of St. Vincent de Paul, to name but a few. They made conclusions that fed into the health strategy. Their main concern was the numbers of medical cards when they were discussing eligibility. They said they believed people should contribute, somewhat, to the cost of their long-stay care.

However, I do not believe there was a discussion of the illegal framework we now know of, going back to 1976. The discussions were about access and the standardisation of the rules of eligibility for community services. It was felt long-stay patients should contribute an amount appropriate to their circumstances towards the cost of care, and cost sharing arrangements. When reference was made to the health strategy, it was within the overall eligibility framework, which included long-stay care and community care services. The main issue was the nursing homes subvention and access to long-stay beds and public facilities.

Deputy Gormley: There was no identification of a possible illegal charge at that stage.

Ms Gillane:  There was not. A 12-page summary of the eligibility group’s proceedings is available from the website of the Department of Health and Children.

Deputy Gormley:  Would the Minister have often asked the witnesses to attend meetings and brief him after that?

Ms Gillane:  That would often happen, although the Minister, Deputy Martin, tended to want to be briefed by officials and advisers.

Deputy Gormley: Was this a verbal briefing or were minutes kept of meetings?

Ms Gillane:  The briefings were mainly verbal and we would summarise what the officials were saying about a particular issue.

Deputy Gormley: Was there daily contact with the Minister to brief him?

Mr. Mannion:  Yes, there was. A couple of times every week, he had the time to sit down and have a more constructive discussion.

Deputy Gormley: Was it just the pressure of time that preventedthe witnessesfrom reading the briefing for the MAC meeting? Had it been read, would the witnesseshave seen the significance of it?

Mr. Mannion:  Had I read it, I would still believe that the decision taken on 16 December was the correct one. I would have waited for the definitive legal advice to return from the Office of the Attorney General. That opinion did not refer to retrospection or anything else that subsequently came up.

een discussed, if it was to appear in that document. Will Ms Gillane comment on that?

Deputy Gormley: Deputy Callely said to Mr. Travers that there was a vote on an unrelated matter.

Deputy Callely:  That is right.

Deputy Gormley:What was that unrelated matter?

Deputy Callely:  Deputy Gormley would be a good man if he could tell me on what he voted each time he has gone through the lobbies.

Deputy Gormley:  Was Deputy Callely going through the lobbies? I am trying to work out the exact circumstances in which he told the Taoiseach about this very important matter. Did Deputy Callely sit down beside him or how did he go about it?

Deputy Callely:  Deputy Gormley knows, as I do, the manner in which Dáil votes are called. One is often in the Chamber for a period of time prior to the vote taking place and after it has taken place. Prior to a vote taking place, there is an opportunity to mingle and briefly discuss issues ——with colleagues.

Deputy Gormley: If one is sitting in one’s place——

Deputy Callely: When I walked into the Chamber, the Taoiseach would have been in his seat and I would have mentioned it to him.

Deputy Gormley:  Deputy Callely would have gone up to the Taoiseach and discussed it with him.

Deputy Callely:  Yes.

Deputy Gormley: Will Deputy Callely try to recollect whether it was the day after or the one after that? As far as I can see from looking at the diary for 2003, there were only two days in which Deputy Callely could have discussed this issue with the Taoiseach. Perhaps he will come back at a later stage with a clearer recollection.

Deputy Callely:He listened and he acknowledged.

Deputy Gormley:  I want to know what the Taoiseach actually said.

Deputy Callely: The Taoiseach did not respond. He listened to what I said and acknowledge it by way of a nod of the head. In one day, a likely schedule of meetings would be 10.30 a.m., 11.30 a.m., 12.30 p.m., 1 p.m., 1.30 p.m., 2.30 p.m.——

Deputy Gormley:  That is fine. Deputy Callely told us how hardworking he is and we believe him. I put this question to Mr. Travers and it has been touched on briefly by my colleague, Deputy McManus. It would appear no minutes were kept of the meetings of the ministerial team. Is that correct?

Deputy Callely:  I would not be the minute taker, so I cannot say. What I can say is along the lines of what Deputy Tim O’Malley said, namely, we would have had a number of collective meetings with the Minister, particularly in the early days of our appointment.

Deputy Callely:  I am aware of ministerial meetings which took place attended only by Ministers, which I think would not be unusual.

Deputy Gormley:  Were minutes kept of those meetings?

Deputy Callely: It was only the ministerial team. I, for one, would certainly have had the relevant folder concerning an item I wanted to discuss with the Minister. I am just covering myself here because I do not want some folder to appear with a note or minute and for somebody to say I said there were no minutes. I am simply saying that on occasions when I met the Minister and the ministerial team in the Department, I may have had a file with me. As we discussed an issue, I may have recorded a note for myself on the file, whatever the file may have dealt with. I cannot recall and would not like to say if the Minister, Deputy Martin, made a record of the meeting. He may well have done so. On occasions, the Secretary General would have attended such meetings and one or two other officials would accompany him. My interest was more in my input into the content of the meeting rather than looking around the room to see who was taking minutes. I would not like to give a definitive opinion in that regard.

Deputy Gormley: Is it fair to say the actions of Ministers in the Department were marked by a certain informality and that it would have been a good idea to read and keep minutes? I put that question to both Ministers of State.

Deputy T. O’Malley: Some meetings were formal. Informal meetings are also useful because the senior Minister in the Department of Health and Children is always extremely busy and if he or she wants to discuss an issue with one, two or all three Ministers of State, that meeting could be called quickly to discuss an item. There is a usefulness in having informality. Mr. Travers mentioned that in his report, particularly in the context of the Freedom of Information Act 1997. He did not expect everything that was discussed to be minuted other than important decisions.

Deputy Gormley:   Did the Minister of State, Deputy Tim O’Malley, ever speak to the Tánaiste about this in any shape or form?

Deputy T. O’Malley:  No, I did not.

Deputy Gormley: Never.

Deputy T. O’Malley: No.

Deputy McManus: Even though it had such serious implications.

Chairman: Please allow Deputy Gormley to continue.

Deputy Gormley:  Both Ministers of State made many assumptions and presumptions, which they reiterated earlier. Why was this issue not followed up? Why did neither of them check that the legal advice had been sought and not received at that stage given that urgent legislation was required? Why did neither of them follow it up? Do they agree it was remiss of them?

Deputy T. O’Malley: The same question was asked of Mr. McLoughlin yesterday and he, like me, made the assumption it was a serious matter. I can only speak for myself and I do not speak for other Ministers. Once the decision was made to seek the Attorney General’s advice, Mr. McLoughlin was happy. He was asked yesterday why he did not follow it up and my answer is the same as his. He assumed it was being done. The Deputy may not like the answer.

Deputy Gormley: I find it incredible. Is making assumptions the way to run a Department?

Chairman:  To be fair, Mr. McLoughlin made the point it was immaterial whether he followed up when he was asked the question because he had got the word.

Deputy Gormley: I am putting it to the two Ministers of State, in particular to Deputy Callely who had devolved responsibility for this issue. It was never raised properly in any forum and it was not followed up. That is the only conclusion we can reach. The Minister of State, Deputy Tim O’Malley, has stated it was based on assumption.

Deputy T. O’Malley: I wish to correct the Deputy. It is untrue to say it was not raised. It was raised at the MAC meeting in February, three months after the December meeting.

Deputy Gormley:  The Minister of State did not raise it with the Minister, Deputy Martin, the Tánaiste or the Taoiseach.

Deputy T. O’Malley:Hindsight is great. The Deputy knows what transpired because he has read the report. We were not aware of all the information and neither was the Deputy or anyone else in the room. We are aware now and, therefore, the Deputy is bringing into play knowledge he has now.  I was aware on 16 December and I saw the minutes of a meeting that took place three months later in February which stated legal advice had been sought from the Attorney General. I saw the minutes of the MAC meeting in October at which various legal options were considered. That was the response from the Secretary General at the meeting. It was only fair, therefore, to assume the matter was being processed. I am not a lawyer and when a matter of such grave importance is being discussed by the Secretary General of a Department and the Attorney General, the assumption is that all legal matters are being discussed.

Deputy Gormley: Did the Minister of State ask to see the legal advice at any stage?

Deputy T. O’Malley:   I am not a member of the Cabinet and, therefore, I would not be given that legal advice.

Deputy Gormley: The Minister of State is in the Department.

Chairman:  When Mr. McLoughlin was asked yesterday whether he made an attempt to talk to the senior or junior Ministers, he pointed out it was immaterial.

Deputy McManus: That has nothing to do with this.

Deputy Twomey:  He is not being questioned.

Chairman:  It has a great deal to do with this.

Deputy McManus: He is out of the loop. These are the Ministers of State who have carried responsibility.

Chairman: He is not out of the loop. He was brought into the loop twice earlier. It is convenient now and again——

Deputy Gormley: I did not mention him.

Deputy Gormley: I welcome all the delegates to the committee. The Tánaiste has informed us that her aspiration is to deliver a world class health service. I would be happy with a half decent health service. How far are we from a world class health service? In terms of the accident and emergency crisis, I think it was Mr. McLoughlin who was thrown into the lion’s den on “Morning Ireland”——

Chairman:  He did not do too badly.

Deputy Gormley: Not bad at all. Cathal MacCoille went through the issue systematically regarding where we are in the ten-point plan. Will Mr. McLoughlin go through it and tell us where we are now? In terms of the capacity problem which I have always identified as the main problem, does he agree that it is not just a question of unblocking existing beds but also of providing new beds? When will we get the new beds? When will the capital programme be announced? The Tánaiste said it would be before Easter but we have not heard anything since.

I am glad the HSE delegation is here today because we can ask questions to which we sometimes cannot get answers in the House. Yesterday the HSE was quoted in the Irish Independent. It was said that the new legal limit of 0.6 to 0.8 parts per million of fluoride, which has come down from the current legal limit of 0.821 parts per million, has not been implemented. Notwithstanding the severe shortcomings of the fluoride report, does the delegation agree that it is remiss of the Government and the authorities that this has not been implemented three years later?

Will the delegation also comment on the case of Laura O’Shea, a lady from Brittas who lives quite a distance from the maternity hospital and whose previous delivery was on the side of the road. She is fearful the same will happen with her forthcoming delivery and has asked for a midwifery service. Does the delegation agree that as we begin to close more maternity units, roadside births will become more common? Is this an issue of concern? If we close more units, we will also have more inductions and more Caesarian sections. Is that healthy for mothers and society?

Chairman:  Members should refrain from mentioning individual cases if possible.

Deputy Gormley:  The matter is in the public domain.

Chairman: I appreciate that but we must abide by our instructions.

Mr. Kelly:  I will ask Mr. Browne to deal with a number of the points made. On the matter of the capital plan, we have completed it. It has been submitted to the Tánaiste and her Department and we will have dialogue with them on it. The matter is ongoing, but complete from our end.

Mr. Browne:  I will give a brief response on the issue of the individual to whom Deputy Gormley referred. We would generally classify that as a domiciliary birth or home birth service issue. The chief executive officers of the former health boards commissioned a report, probably 18 months ago, on what would be an appropriate and safe domiciliary birth service. That report came to my desk this week and is under review with a view to deciding what steps we can take. All I will say at this point is that the decisions around domiciliary births are taken on the basis of safety. My understanding in this instance is that the view of the HSE in the locality is that it would not be safe to provide a domiciliary birth service. There is an issue about access to a maternity unit within a specified period and that would not be possible in that area. Nonetheless, I understand that the HSE in the locality is aware of this particular person’s problems and will attempt to address them as best it can.

Deputy Gormley:  What Mr. Browne is saying is that the fewer maternity units we have, the fewer the number of home births we will have. That is the logical conclusion because, as he says, if there is not a maternity unit close by, it is not safe to have a home birth. Am I right on that?

Mr. Browne:  That would be part of the issue. The other issue might be about how well equipped the primary care sector would be to deal with issues that might emerge. There is not a simple solution. I may be in a better position to comment in more detail on the issue the next time we come before the committee.

On the fluoride issue, at this point we are not well enough informed to be able to give the committee informed comment on the matter. We will come back to the issue at a later stage.

Mr Kelly:  We are due back on 14 May and can cover it then.

Mr. McLoughlin:  On the matter of the provision of further detail on the ten-point plan, a second MRI machine is to be provided at Beaumont Hospital which will speed up access to services. It will be provided by the autumn of 2005. We are in discussions with the three hospitals with regard to the provision of the acute medical units and have asked them to reorganise services internally. We will resource that this year.

Deputy Gormley: This year.

Mr. McLoughlin:  Yes, this year, but the new building will not happen this year. However, we should be in a position to reorganise services which will mean that elderly patients will be assessed more quickly. Tenders are completed on the transfer of 100 high dependency patients for suitable private nursing home care. We are doing site visits this week and should be in a position to move patients to those facilities in the next two to three weeks, if the facilities are ready.

We have signed many of the contracts relating to the 500 people who require intermediate care and are now discharging patients. We are prepared to take up places as quickly as the nursing homes make them available to us. Approximately 30 patients have been discharged to date and we expect to discharge a further 40 to 50 over the next two weeks. We are dependent on the nursing homes. They indicated they could provide the care, but they must gear up and recruit staff. They are working closely with us.

With regard to the home care packages, 500 have been agreed. Some 27 patients have been discharged at this stage. These cases are where intensive home nursing and home help is provided. A further 50 patients are being prepared for those home care packages in the community.

On the matter of out-of-hours services, 150 general practitioners in the northern area of the city have agreed in principle that they will provide an out-of-hours service on the north side. This is critical for both Beaumont Hospital and the Mater Hospital. Detailed discussions are going on with those general practitioners with a view to putting the service in place.

On cleaning services and security measures, we have agreed that we need to carry out a national audit of cleaning services within our hospitals in general to determine the standards of cleanliness and to bring in national guidelines. We are about to advertise that contract in the newspapers and we intend the process to be completed over July and August. We would then have an assessment of the quality of cleanliness in all our hospitals and establish national standards. We do not have national standards in this area.

Deputy Gormley:   When will the national standards be introduced?

Mr. McLoughlin:  Later this year. The process is moving forward and we have brought together a group that is working on those national standards. We intend that, following the audit, we will be in a position to introduce national standards. We can then audit these and ensure that they will be part of our negotiations with any provider, be they in the public, voluntary or private system, in respect of standards of cleaning.

We are involved in discussions with some public and private interests in respect of minor injuries units and other services of that nature, the provision of which would ease the pressure on accident and emergency departments. They will not affect the services for patients who need to be discharged and patients who need to be admitted to hospital. They will improve the flow of patients in accident and emergency but they will not actually impact on the patients awaiting admission.

The three critical measures to allow for the reduction in the use of trolleys are the 100 high dependency beds we are about to commission, the 500 packages of six-weeks interim care we are buying from the private sector and the 500 packages of care for around the country which are being actioned at present. That is the position.

Deputy Gormley:  To return to the discussions taking place regarding the minor injuries units, when will such units come into effect?

Mr. McLoughlin:  It is not possible to say at this stage. Some of them are with private providers and clearly there are issues about charging and how that would operate. We have had discussions with private hospitals which indicated that they have a capacity and an ability to do this for us. We must look at each area to see how effective it would be in reducing numbers. Clearly, we do not want to invest in minor injuries units in an area that is already well resourced. Our main problem areas have been the north side in terms of access. Beaumont is under particular pressure as are the Mater and Tallaght. Significant resources have been put into St. James’s Hospital with regard to the provision of additional beds and an AMU and this is having an impact. Discussions are ongoing. I will report back to the committee when those discussions are finalised.

The Deputy referred to the issue of beds. We will be commissioning an additional 200 beds this year in different parts of the country. The resources are there to commission an extra 200 beds this year and this is being done. The staff are being recruited. It should be remembered that when the Government announced that 3,000 beds were needed, that number was the requirement over ten years. People assumed this was an initial requirement. By the end of this year, 900 of those beds will be in place. The exercise being carried out in the National Hospitals Office is to determine where the next number of beds should go, particularly in light of the issue of regional self-sufficiency and equity of access. We have commenced discussions with some consultant groups about how to reorganise services in order to make it easier for patients to access them locally.

There have also been developments this year in radiotherapy services. Two additional LINAC machines will be available in Cork. One of these was commissioned in recent weeks and the second will be in place by September. A radiotherapy service has been established over Easter in the former Western Health Board region. There will be many developments this year. A new accident and emergency unit has been opened in Naas and new accident and emergency departments are up and running at the Blanchardstown and Roscommon hospitals. A new accident and emergency department is opening in Cork University Hospital next week. All of these are being opened with additional staff and facilities and better services for patients. There is an ongoing investment that is not often publicised. We hear about the trolleys but there is a lot going on in terms of developments.

Deputy Gormley:  Do we, therefore, have a world-class health service?

Mr. McLoughlin:  No, we do not. I do not think there is a definition of that. We regard our ability to respond quickly as a good indicator. We have not reached that point yet. Patients who are deemed to be medically suitable for an acute bed should get into that bed and that is our view. Our first priority is to try to achieve this.

Chairman:  When we have the world-class health service, the Deputy will be embarrassed that he doubted it.

Deputy Gormley:  I will be delighted to have a world-class health service.

Deputy Gormley:  I appreciate that Mr. Travers does not have back-up staff and I thank him for appearing before the committee and for producing his report. I would like to clarify a number of points before I raise more substantial questions. Did Mr. Travers have discussions with the Tánaiste about the terms of reference or the report itself and could he elaborate on those?

Regarding the meeting held on 16 December, which I see as pivotal, it strikes me that the Ministers of State, Deputies Callely and Tim O’Malley, acted on assumption. Deputy Callely assumed that the advisers and Department officials would brief the Minister, while Deputy Tim O’Malley assumed that the issue would be dealt with as a matter of course. I agree with Deputy McManus that Mr. Travers’s account and his conclusions differ. He deals with administrative responsibility but there appears to be a complete lack of communication between the Ministers of State and the Minister for Health and Children. Does Mr. Travers agree there appears to be a complete lack of communications between the Ministers of State and the Minister? I asked the Tánaiste whether any meetings were held between the Ministers of State and the Minister but did not receive a reply. Perhaps Mr. Travers also asked this question of the Ministers. Does he agree it would make sense that the political heads of a Department meet on a regular basis to discuss issues? I assume that weekly meetings should take place. These people seem to trod around in the dark without speaking to each other. The Minister does not read his briefs. The issue of maladministration also applies to Ministers.

Mr. Travers:  The terms of reference had been drafted when I was asked to undertake the report on 16 December. Upon being asked to examine them I suggested one or two changes which were then incorporated in the terms of reference. These changes involved definitional matters including relevant persons and to ensure that I would improve my access to information through the co-operation of those to whom I directed my inquiries.

Deputy Gormley:  Did Mr. Travers talk to the Tánaiste personally about this?

Mr. Travers:  I talked to a number of her advisers on the issue. They, in turn, were in contact with the Attorney General’s office on drafting the terms of reference. As the first three chapters of the report comprised its factual basis, I made them available to a number of people including the Tánaiste, Ministers and the Secretary General of the Department.

Deputy Gormley: When were they made available to these people?

Mr. Travers:  I do not have the exact date but it probably occurred in January or February. Elements of the report which describe my discussions with Ministers, officials and others were made available to the relevant parties to ensure that my account was accurate. This material was primarily made available to the Ministers and the Secretary General but also to the two officials referred to in the report, one of whom claimed to have seen the document in the Minister’s office and the other of whom claimed to be unaware of it being there. I agreed with both of those officials that the material of the report reflected our discussions. In that sense the report was discussed with people. I made a copy of the completed report available to the Tánaiste on Friday, 3 March, at which time I discussed it with her. I made one or two changes to the report over the subsequent weekend before submitting it.

Deputy Gormley: Did the changes come on foot of the discussion with the Tánaiste?

Mr. Travers:  No, they did not. I informed the Tánaiste that I had not had the opportunity to read the document thoroughly and that I would like to do so. The letter I sent to the Tánaiste drew attention to two issues regarding changes I made in the report after reading it over the weekend. This letter is included at the beginning of the report.

I assumed that Ministers of any Department held regular meetings so I did not inquire whether this was indeed the case. I did not explore this matter in detail with the Minister or the Ministers of State. I asked the former Minister of State at the Department of Health and Children, Deputy Callely, whether he had followed up the statement he made at the meeting of 16 December on briefing the Taoiseach and the Minister on the charges issue. He informed me that he had mentioned the issue to the Taoiseach in the Dáil but that he had decided against mentioning it to the then Minister, Deputy Martin, because he was of the opinion that the Minister’s advisers and Department officials would do so.

Deputy Gormley:   If Mr. Travers did ask the question and discovered that they did not meet regularly, would he agree this to be problematic?

Mr. Travers:  That is outside my terms of reference and should be discussed instead with the Ministers concerned.

Deputy Gormley: My clear impression is that they were not very communicative on this serious issue. The least we ought know is the frequency of meetings between these people on important issues in their Department. Would Mr. Travers agree that this is an area that ought be probed? We are discussing political responsibility and maladministration. It is surely a cause of concern that meetings are not held regularly. I wish Mr. Travers had asked questions on this.

Mr. Travers:  I assumed that frequent meetings were held by them so I did not inquire into this issue.

Deputy Gormley: What would be Mr. Travers’s view of the adequate frequency for meetings of Ministers?

Mr. Travers:  Meetings should be held every few weeks.

Deputy Gormley:  Every few weeks.

Deputy McManus:  If Mr. Travers had made assumptions on other areas of the Department’s operations as a corporate entity, we would not have a report. He did not make assumptions on the work practices of civil servants but on how Ministers fulfil their responsibilities. Does he not think it might have been helpful to state in his report that Ministers should read their briefing documents, that highly paid advisers should make sure that their Ministers are briefed and that when a Minister says he will brief somebody he should do so? Are these not part of what happened?

Deputy Gormley:  I am not privy to the operations of the Department, in particular the way in which the Minister and the Ministers of State function. However, as a person with extensive experience in the Civil Service, would Mr. Travers expect minutes to be kept of meetings between the Minister and the Ministers of State? Did he ask for the minutes of those meetings?

Mr. Travers:  In response to the Deputy’s last question, the answer is that I did not. Generally, I would not expect minutes to be taken at meetings or general discussions on policy matters between the Minister and the Ministers of State. However, if officials were present at the meetings, I would have expected minutes to have been kept.

Deputy Gormley:  Are we to believe there were no official meetings?

Mr. Travers:  If minutes were kept on the matters I was asked to inquire into, I would have expected them to be made available to me by virtue of the fact that I had asked for them when I submitted the terms of reference to the Secretary General of the Department in December 2004.

Deputy Gormley:  So would I. That leads me to believe no formal meetings take place between Ministers and their Ministers of State. That is the only conclusion to which I can come.

Mr. Travers:  I do not know the answer to that question.

Deputy Gormley: I have concluded that no formal meeting took place between the former Minister and his Ministers of State because if no minutes were kept, it was not a formal meeting.

Chairman:  As far as Mr. Travers is aware, no minutes were taken. The Deputy will have an opportunity to ask that question on another occasion.

Deputy Gormley: Mr. Travers has said meetings between a Minister and his or her Ministers of State should take place every few weeks. The members of this committee need to find out how often meetings took place, because if no meetings took place, there was a serious problem in the Department.

Chairman: I am not trying to stifle the debate but to be fair to Mr. Travers, he has made the point that he looked for reports but when none was forthcoming, he presumed there were no written reports. The former Minister and his Ministers of State will answer questions when they appear before the committee.

Deputy Gormley:  As a person with extensive experience in the Civil Service, can Mr. Travers understand the grievance which civil servants have expressed since publication of the report that it undermines the basis on which Departments are run? Until now the buck has always stopped with Ministers, those with political responsibility. It seems that on this occasion the Secretary General is taking the rap. Does Mr. Travers see consequences in the future for the legislation which underpins the running of Departments and which dates back to the 1927? In this instance, ministerial responsibility clearly seems to count for nothing.

Mr. Travers:  Having read the Department’s files and talked to officials and Ministers in recent months, my main conclusion is that this is a significant issue in terms of its legal, financial and political implications. Given the substance of the issues involved, I would have expected a good analysis of the issues would have been done and set out clearly in a memorandum prepared within the Department and made available to Ministers so that there could be no excuse and no lack of clarity as to the importance or the substance of any of the issues. I did not see any document of that nature and I was surprised by that. I had to draw the conclusion that there had been a significant failure on the part of the administrative system because if that type of analysis had been undertaken and put clearly and forthrightly under the noses of Ministers, no Minister could have ducked the issues. I did not see anything like that put forward. The Deputy asked a question and I have tried to answer it as fairly as possible. That is the conclusion I came to in respect of the documentation I saw.

The other question the Deputy asked is whether that might have a bearing on the relationship between civil servants and Ministers in the future. To the extent that civil servants have been discouraged from putting their views on substantive issues in writing, it might be a good thing if that issue were dealt with because when substantive issues such as this arise there is a need for civil servants not to duck the issue and to put it down very clearly and forthrightly on a piece of paper and provide it to the Minister concerned.