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Government figures show that the national health bill will reach Lm200 million per year within 10 years. Is there a solution to the burgeoning cost? KARL STAGNO-NAVARRA reports
In the face of a struggling economy, another bombshell is about to land on Prime Minister Lawrence Gonzi’s lap, as this September Cabinet is expected to be presented with costings prepared by the Health Ministry, regarding the sustainability of the “free-to-all” health system.
In a series of meetings held in Castille throughout these last months, the Prime Minister is reported to have been updated with the “shocking figures” as a preview to the report currently being compiled.
From just under Lm46 million spent in 1995, the national health bill shot up to Lm75 million in 2000, and Lm94 million in 2005. This year, government will be spending over Lm101 million. At this rate, with a 105 per cent increase over 10 years, by 2026 the bill will top the Lm200 million.
Also briefed about the current situation and the forecasted prospects were the PN’s executive committee, whose members are reported to have been shocked just as much, as Health Minister Louis Deguara gave them a detailed presentation a few months ago.
During the briefing, Deguara made it clear that although the system will remain free to all, government must be strong and courageous enough to take the right decisions, in order to guarantee the sustainability of a national health bill that this year alone has topped the Lm101.5 million, of which Lm20 million alone go for free medicines.
With the figure representing a threefold increase over the last 10 years, the prospects for the next 10 years are more than daunting.
According to sources, Cabinet will next month be further alerted on the reality that runs concurrently with the pensions reform, although totally separate from the issue.
“These bills are separate,” warned a cautious Louis Deguara before the PN executive committee, chaired by PM and party leader Lawrence Gonzi, who also holds the finance ministry portfolio.
Both at Castille and at PN HQ in Pietà, Louis Deguara presented graphic visuals to illustrate the present situation, and harped about the fact that if government won’t act now, it will be faced with an emergency starting from the next legislature.
The introductory slide depicted the ever-increasing ageing population. “As this year has seen the first ever mass introduction of baby-boomers into the pensions stream, we are now in the region of 19 per cent of our population over 61 years old,” explained Louis Deguara. “By 2010 we will exceed 21 per cent, and by 2035 this will dramatically increase to almost 32 per cent of our population, meaning that we will have an elderly person for every two citizens”.
The estimate for life expectancy has increased from 67.5 for men in 1967, to 76.4 in 2003. As for women, their life expectancy has increased from 71.6 in 1967 to 80.4 in 2003. So apart from sustaining their pensions, government must act from now to support their medical needs.
The shock about cost came from the next slide, explaining the financial burden the state carries to maintain a patient at St Luke’s hospital.
The graph shows a dramatic upturn from the 65-69 age bracket onwards, starting from an average Lm350 per person per year, to Lm800-900 per person per year in hospitalisation for the 80-90 plus age bracket.
However, tackling the elderly and their health is not the only problem. It’s the whole system that is costing, and there is no way anyone can use a magic wand to make a significant turnaround.
Financing
How will this be financed? This is the hot potato that is expected to be handled by the Prime Minister and his Cabinet as from next September, when Minister Louis Deguara will present his departmental strategy that is also expected to include outline proposals to be forwarded to unions about prospected work-practices reform, mostly concerning flexibility and on-call allowances for medical staff.
Though noncommittal about what sort of financing government will be seeking to make good for this increasing cost, Louis Deguara told MaltaToday that “while the national health system will remain free, it is about time we all realise that what comes free comes at a high price, and the money must come from somewhere.”
While costs can be controlled with better management, Louis Deguara explains that the bill increases mostly with increased technology costs, coupled with an increase in operations, laboratory work and cost of medicine.
Abuse? Louis Deguara admits that there is a certain level of wastage and abuse in the system as it is free, however, research complied by a task force reveals it almost insignificant to the real costings.
A clear example of increased cost is reflected in the number of operations performed at St Luke’s between 1995 and 2004. “From 22,007 operations we now perform almost 30,000 in one year”.
Laboratory tests have increased by almost 65 per cent in the last four years, leaving the lab technicians handling almost 1.5 million tests.
Eventually, Cabinet will be faced with a number of proposals to discuss and leave to the Prime Minister to decide as to the financing of such a system that is to remain “free-to-all”.
The options are practically infinite, and vary from a gradual increase in National Insurance contributions, direct or indirect taxation, reduce expenditure on infrastructural projects such as roads and environment. The list could go on forever.
Immediate strategy
The ageing population crisis is prompting government to act from now, approving a strategic plan to increase the total of beds by 1,000 over the next 10 years.
“We will be needing an average of 100 beds per year to face the constant growth of our ageing population,” explained Deguara.
He dwelt on the fact that though successful in its concept, the Zammit Clapp rehabilitation hospital must be expanded from its slim 60-bed capacity.
Cabinet has recently approved an Lm8 million expenditure plan to move Zammit Clapp facilities to a brand new 280-bed complex in the vicinity of St Vincent de Paule, whilst a new “waiting rehabilitation ward” has been opened within Mount Carmel hospital in Attard to accommodate those on Zammit Clapp’s waiting list. The ward has been opened in order to avoid overcrowding at St Luke’s with elderly who need rehab care, have no vacant beds at Zammit Clapp and run the risk of becoming social cases.
A second similar ward is expected to be completed at Mount Carmel in the coming months.
Boffa Cancer hospital will be migrating to Zammit Clapp in St Julians, providing better capacity and services for the ever-increasing rates of new cancer patients.
Concurrently, government will continue to embark on the expensive and ambitious extensions and modernisation of St Vincent de Paule, and the construction of new homes for the elderly. The promised Mellieha elderly residential home is expected to provide another 100 beds.
“All this must however be done with a clear strategy to strengthen the public-private partnership, in which government will procure beds from the private sector to accommodate more elderly who cannot return to their communities after their rehabilitation,” he said.
What is the opposition saying?
Given that the prospects of the outcome of the next general election are bleak to the PN, the issue is set to rebound onto the Malta Labour Party’s lap.
In a political document recently approved by the MLP General Conference, it is also made clear that a Labour government will maintain a national health system that is free of charge. The issue of sustainability is clear also to the MLP as the document highlights the problems related to the reality of an ageing population.
The MLP argues that the difference in policy lies in the decisions taken by the PN in government throughout these last 17 years. “The PN in government focuses only on cost and never on targets,” the document argues, whilst accusing the PN of “neo-liberal” politics that results in long queues, overcrowding, and long waiting lists.
It attacks government for closing down, or reduced opening hours or services from health centres in different localities.
“This is putting a lot of pressure on St Luke’s hospital sending the whole system haywire,” it says.
According to the MLP, the way forward is reforming the system by giving it a “human face”.
To do this, the MLP is proposing a system in which each citizen will be given a legal right to access all national health services, allowing him to be served best under a protective social umbrella.
The MLP is conscious about the costs too, however it does not talk about taxation. It steers clear from the argument and insists it’s the economy that will sustain it.
Labour Health shadow minister Michael Farrugia told MaltaToday that the sustainability will be dealt by what he defined as “a dynamic government that will be able to incentivise the economy, ensure it delivers and generates wealth across the board, and therefore the national health system will be financed accordingly.”
Michael Farrugia – who is also a doctor by profession – explained that the costs can be controlled by investing in more preventative cure, particularly in the orthopaedic and medicinal sectors. “If we succeed in this we will reduce the case numbers of referrals to hospital,” he explains, adding that all support services will be enhanced. The major differences as to the current governments strategy, are highlighted in the document, particularly pertaining to the migration of Boffa hospital to Zammit Clapp grounds.
While the MLP will keep Mater Dei as the new general hospital, Boffa hospital will be “structurally remodernised” and keep its role as an oncology and dermatology hospital. Zammit Clapp will be converted into a specialised hospital for elderly related illness. As for St Luke’s hospital, the MLP proposes to utilise some parts of it once it is vacated, and will accommodate disabled persons who cannot sustain themselves independently within a community.
Just like the MLP document states, Michael Farrugia declares that “there exists no magic wand to short-term solutions given the financial distress a new government will inherit, however we will make it our mission to ensure that the system will be sustainable and accessible to all.”
The Maltese are to brace themselves for a fact of life in Maltese politics: there is no continuity in either policy between the two major political parties that alternate on the government seat. And wherever there is no continuity in policy, it always carries a major financial cost to all taxpayers!
ksnavarra@mediatoday.com.mt
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