COSTS:THE GOVERNMENT has said that it is confident that the €100 million savings originally to be generated by scaling back the number of medical cards available to people over 70 can now be achieved through other means.
However, it remains very vague as to where and how precisely these savings will be made.
In its statement yesterday, the Government said that it was satisfied that the savings could be achieved through the ending of the automatic entitlement to a medical card for those above the new income threshold, the establishment of a new capitation rate for doctors and through economies in drug usage.
It has established separate processes to examine the fee levels paid to GPs for treating medical card patients over the age of 70 and to realise the potential for significant savings in drug costs.
GPs are currently paid two widely different capitation fees - for patients over the age of 70, depending on whether they received their medical card on means or age grounds.
The payment for patients who received cards on means basis is €160 per year, while the rate for an age-based medical card is €640. This means that 2,000 or so family doctors operating the medical card scheme share around €120 million in capitation fees for looking after patients over 70.
The Government now plans to introduce a common capitation fee to apply to both groups.
Minister for Health Mary Harney said yesterday that around €16 million should be saved under the new capitation arrangements.
It is estimated that around 20,000 patients over 70 will lose their medical card under the new Government proposals.
The introduction of a new fee rate of €325 for each of the 335,000 or so over-70s who will retain medical cards under the new arrangements would generate savings of around €16 million - in line with the Minister's figure.
In addition, the State would generate savings on the cost of drugs currently provided to the 20,000 patients who will no longer have medical cards. However, this figure is not yet publicly available.
If the €100 million savings are to be achieved the balance will have to be secured through new economies in drug usage.
The Government said yesterday that the Irish Medical Organisation (IMO) had maintained that there was potential for significant savings in drug costs without compromising on patient care.
It established a process with the IMO under the chairmanship of Dr Michael Barry to develop recommendations for good practice on prescribing "while maximising the potential for economy in the use of public funds".
The Government has not publicly set any targets for such savings and no terms of reference of the group have been published.
It is understood that this group may not necessarily focus on the substitution of generic drugs for branded products, although it may form part of the process.
Some informed sources said that the group may look at recommendations in relation, for example, to the economics of placing patients on statins to lower cholesterol.
A report by the National Centre for Pharmoeconomics - where Dr Barry is based - found that lipid-lowering statins accounted for more than 10 per cent of total expenditure in the general medical services scheme in 2005.
Sources said that the group could also examine whether older anti-depressants were just as effective, but less costly.
Sources close to the department said that a lot of "war-gaming" had been carried out over the weekend in relation to the potential savings that could be realised through reform of the capitation rates and the changes in drug usage.
However this is not the first time that the health service has announced ambitious plans to generate wide-ranging savings.
A year ago, the HSE unveiled plans to save €100 million through changes in the reimbursement rate for pharmacists. This scheme collapsed ignominiously earlier this month.
The Government's new plans may succeed in generating the required level of savings.
However, more detail needs to be provided as to how these will be achieved.