A recent conference on competition in the healthcare sector highlighted some interesting theories. Priscilla Lynch reports
Arguments over restrictions of European competition law, the value of competition itself within the healthcare sector and questions about how competition will operate under a system of universal health insurance were the main themes discussed at a recent healthcare competition conference.
The CEO Health Forum was held on January 26 in University College Dublin, and was attended by top-level executives across the public and private sector keen to see how the changing role of healthcare competition policy in Ireland would affect them.
Competition law
The role and importance of competition law was outlined by a number of international competition law experts, including Mr Christian Holzleitner, Director General for Competition at the European Commission.
However, competition law was also criticised as creating obstacles and hindering healthcare innovation.
A number of top-level pharmaceutical executives warned delegates that Ireland was becoming an increasingly unattractive market to launch new innovative medicines in, with too many obstacles.
They claimed Irish patients and pharmaceutical employees are now in serious danger of losing out because of this.
Mr Jimmy Sheehan, founder of the Blackrock and Galway Clinics, spoke about his personal experience of attempting to take a case in Europe challenging what he saw as the alleged dominance of the Vhi healthcare in the Irish health insurance market and its ability to dictate the development of the private healthcare provider sector.
Mr Sheehan explained he had to have two Senior Counsels represent him to make what he felt was a simple complaint and that he had to take the case on his own, despite it being relevant to many other Irish private healthcare providers.
He said the process had been onerous, time-consuming – taking two years from 2006 to 2008 to get the case prepared – and expensive.
Moreover, his challenge ultimately proved unsuccessful as the European courts deemed it too expensive and not of enough interest to fully investigate the claims.
Mr Sheehan concluded that the whole process of taking competition law cases within Europe was “a sham” and only benefited the bank balances of law firms. His remarks drew a round of applause from the audience.
Competition under UHI
The question of whether Ireland’s planned universal health insurance (UHI) model will have to be subject to competition law was also raised.
The Programme for Government states that as a statutory State guaranteed system of health insurance, the UHI system will not be subject to European or national competition law.
However, former Competition Authority Chairman Mr Declan Purcell, said if patients have a choice of health insurance company as they currently do, and are able to choose their pharmacist, dentist, GP and other health service providers, as indicated in the Programme for Government, then competition law will apply.
Thus, he called for “urgent clarification” of the issue before the publication of the Government’s forthcoming white paper on UHI, and also called for the VHI’s regulatory structures to be finally brought into line with the other insurers as has long been promised by the Government.
New hope for healthcare discussions
Comments during the Forum by Mr Paul Gallagher, former Irish Attorney General from 2007 to 2011, that the Competition Authority’s interpretation of competition law was legally wrong made national headlines.
Mr Gallagher was very critical of the Authority’s stance that collective “negotiations” between the State and professional representative healthcare bodies on public contracts are illegal.
He claimed this interpretation was wrong “as a matter of law”, and created significant uncertainty and fear of prosecution on the part of the representative bodies and the State regarding what they are allowed to do, and also hampered necessary changes to healthcare provision.
Another Irish SC, Mr Michael Collins, also told the Forum that he believed the issue of collective negotiations involving healthcare bodies as currently interpreted by the Authority “has to be rethought”.
However, Ms Carol Boate, Advocacy Division Manager, Competition Authority, denied the Authority threatened to jail Government officials for negotiating with doctors, as had been suggested by Mr Gallagher.
She admitted, however, that statements issued by the Authority, following the furore in late 2008 over the axing of the over-70s medical cards, could have been clearer and had added to uncertainty at the time.
Since then the Authority has produced a number of documents to clarify what can be done under collective negotiations she told the Forum.
However, she noted that as two eminent Senior Counsels at the Forum seemed to be unclear about the subject the Authority probably has more work to do on the issue.
Ms Boate also disagreed that competition law needs to be further clarified through new legislation, and reiterated that there is no problem with the Minister of the day sitting down with professional medical bodies and discussing a huge variety of issues surrounding contracts, once the Minister makes the final decision on fees.
The IMO and other professional medical unions, including the Irish Dental Association, have noted Mr Gallagher’s comments and say they have reinforced their beliefs that collective negotiations on new healthcare contracts have no legal impediment and should go ahead as a priority.
At least one union has already written to Health Minister James Reilly to draw attention to Mr Gallagher’s comments and call for discussion on new contracts to be commenced.
The value of competition
A number of international competition experts spoke at the forum about the value of competition in healthcare provision, and Mr Gallagher was also keen to discuss it and the supportive role of competition law.
He said that right across the developed world healthcare costs are rising so significantly they are contributing to longterm fiscal imbalance, so the problem is not just an Irish one.
Mr Gallagher contended, however, that effective change is going to require a completely new radical approach to delivery and funding of medical services and a movement away from the eligibility system introduced in 1970.
He added that it is no coincidence that the falling costs of certain health-related services, including gene mapping, are occurring in a competitive market.
The challenge now is to capture advances using the limited funding available for healthcare to obtain maximum benefit from them Mr Gallagher commented, adding that competition law has a vital role in improving quality and value in healthcare through reducing costs and creating efficiencies.
Mr Gallagher acknowledged, however, that new legislation in the health area is constrained by the limitation of resources and by the fact that any legislation clarifying entitlements runs the danger of being seen as limiting rights.
“Accordingly any reform of existing health legislation gives rise to enormously complex legal issues and often very fraught political controversy,” he admitted.
This aside, he had a number of suggestions for how healthcare provision should be legislated and remunerated.
They included a move to a contractual as opposed to an eligibility basis for the provision of public healthcare services, which he said could open up significant opportunities for incentives and efficiencies.
Furthermore, Mr Gallagher strongly recommended a change to fee-forvalue payments as opposed to the current fee for service structure of paying self employed health providers.
He claimed healthcare systems dominated by fee-for- service payment are unsustainable in the long run and fee-for-service payment drives up quantity while fee-for-value drives up quality.
Touchstone CEO Mr Fergus Hoban made a similar argument during the Forum and claimed payments based on an outcomes system would be better for the patient and more cost effective and efficient in the long run.
Ms Boate also suggested that new GP contracts could be with clinics as opposed to GPs themselves.
Image courtesy of Joelk75, Creative Commons
