Minister Louis Deguara comments on Health Reform (The times) - 27/11/2003

Curing the health sector
Herman Grech

Dr Louis Deguara

Health Minister Louis Deguara is under fire from the Labour Party for failing to deliver the new hospital on time and at a seemingly hiked up price tag.

But in an interview with Herman Grech, Dr Deguara defends the government's health policy on all fronts. But the recent equipment tender hitch means that Mater Dei Hospital will not open before 2006, he says.

How much is the Mater Dei Hospital going to cost to run each week? A figure of Lm1.2 million a week has been cited. Surely this is unsustainable.

Yes, the figure is more or less correct. Today we are spending the same amount on all the public health service, excluding St Vincent De Paul and the Gozo Hospital. But I will say that people are being alarmed by these figures because of a lack of information.

But the Lm1.2 million will be spent on the new hospital alone.

Yes, but that amount is for the first time taking into account issues such as depreciation, which so far has never been included in the equation.

So do you think this figure can spiral even more in future?

The figures will always increase simply because improvements in medicine take place on a weekly basis. There are new treatment modalities which are always more expensive than the preceding ones. With the health service, the more efficient we become the higher the cost. For example, we used to retain hernia patients for eight days in hospital but we now keep them for three days - we have the shortest bed stay in Europe - and we discharge them. This means that we can see to more patients with the added costs this brings to it.

So what you're indirectly saying is that this will eventually translate into more taxes.

Obviously, or you can do what other countries are doing and create a health fund and offer services only for the value collected. If the government collects Lm60 million from the health fund the same value has to be provided in services. It does not make sense and we cannot afford to keep introducing new services without considering costs. For example, at the moment we offer hip replacements at Lm500 per prosthesis. Now there are ceramic hip replacements which cost twice as much. Does that mean we should go for it straightaway without considering the increased budgetary repercussions.

You were quoted in parliament as saying recently that the new hospital is going to cost Lm200 million. You were really off the mark weren't you?

The figure is correct but what surprised me is how nobody has asked for a breakdown of the Lm200 million. Instead everybody keeps mentioning the Lm83 million figure cited three years ago.

Although the hospital will be built in three phases, the stipulated Lm83 million for a "design and build" contract was solely for phase one of the hospital. This amount does not include fees like the Lm15 million spent prior to the contract, the Lm28 million for medical equipment, Lm10 million for IT equipment, Lm5 million for furniture and Lm1.5 million for waste disposal and landscaping. It also excludes migration costs, consultancies and VAT. This means a total of about Lm171 million. Then there are the rehabilitation facilities, the medical school, the leisure quarters for the nurses and so on.

If you consider the problems of the national deficit, wouldn't it be better to postpone the project until the financial situation is a bit rosier?

The contract binds both the developers and the government by certain time frames, which means that if they don't deliver on time and we don't take over certain buildings, we will be defaulting and liable to penalties. For example, because of the medical equipment problem (the tendering process has been temporarily postponed), certain construction work cannot be continued and this means that Skanska could actually fine us for the delay.

Has it ever crossed your mind that this new hospital is way too big for a small country like Malta? It is after all the largest capital project currently being carried out in the Mediterranean.

I think the problem was that it took us way too long to decide what we're going to do with St Luke's Hospital, despite the obvious problems that it could not expand structurally. Had we realised earlier, the new hospital could have been built in stages. In politics you have to have a vision. We wanted to develop Malta into a centre of excellence for medical development in the Mediterranean.

We know we have the human resources and the setting for it. We also have to consider issues such as the fact that within two years we will have spare capacity. For example, we have three cardiac surgeons and in a couple of years we'll be running out of Maltese patients. If we offer treatment to foreigners, we'd be generating revenue.

When will Mater Dei start operating?

Optimistically in 2006, barring unpredictable difficulties similar to those encountered, for example, in the award of the medical equipment tender. We've lost a year in the awarding of the tender and it will take whoever is awarded the tender another year to supply, install and commission.

Some people believe that however large and new the hospital, the healthcare system will remain unsustainable so long as specialists and doctors are allowed to work both in the private and government hospitals. It's no secret that a number of doctors and specialists consult patients in private clinics and then refer them for tests at St Luke's. Hasn't the time arrived for the government to decide to have its own consultants and specialists?

Yes, I agree and today we already have four specialists whose contract forbids them from practising privately. But this was possible because they hold foreign passports. The union starts protesting the moment we grant a similar contract to somebody with a Maltese passport. The problem is that you can't change the salary structure of a government employee because of the collective agreement. But we do intend to start discussing this issue and others with the unions.

Isn't it about time that the government provides some sort of incentive for those who are privately insured for health?

In the electoral programme we said we will be giving an incentive in this respect and, in fact, two years ago we reduced tax on private insurance. This process continues. It is, however, a fact that private insurance is not the ultimate solution as some may think; nor is opting out of a possible future health fund advisable. When a person is considered to be a potentially high risk individual, private insurance tend not to cover him fully. Therefore, in cases such as these it will still be the responsibility of the public health sector to provide the cover. Again if one opts for a private cover there are certain services which only the public sector can provide. Complicated surgery is not available in the private sector. Besides, today you have certain consultants who refuse to operate in the private sector on high risk patients.

But it has often been said that the government could easily make use of services at private hospitals and ultimately save money. The private operators also claim the government is in competition with them.

We are all for cooperating with the private sector but this doesn't mean that we have to bail the private sector out or to ensure they remain viable. The cooperation has to be structured and to the benefit of both parties.

Does the government see it feasible to have so many health centres around Malta?

If we really want to make maximum use of our resources we have to do some rethinking about the services being provided. The health centres started off as emergency centres and successive governments kept expanding them. I think we could utilise our limited financial and human resources better. Does it make sense that, with the present shortage of about 30 per cent in the complement of doctors at health centres, 30 per cent of their attendance is wasted writing out repeat prescriptions? Why should we stick to the same unproductive rosters? Wouldn't it be better to leave just one doctor in the centres at night and utilise the other two better during the day?

So why hasn't it been tackled?

Primarily because the unions do not accept changes unless they are included in a complete revision of the collective agreement. Few realise how difficult it is to challenge a directive given by the unions. We've had situations where we've transferred individuals and their union orders them not to shift - and we can't do anything about it.

Will the health sector ever be sustainable?

It depends how realistic our demands and expectations are. One gets what one pays for. On the positive side, we have to remember that once the hospital is completed the deficit will go down by Lm50 million a year. But we never will be sustainable if we retain the existing systems.

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