A story of incompetence and cowardice
On Monday 18 November 2002 Ivor Callely, the Minister for State at the Department of Health with special responsibility for old people's issues, spoke at the launch of a report on what was called "Elder Abuse". He said it was a "momentous" day for the older people of the country. They were being given a blueprint to deal with "the scourge" of elder abuse. He said abuse could come in many ways, physical, psychological and financial. The departmental speech-writer dug out a portentous quotation for the end of his oration, by a writer, Anthony Powell: "Growing old is like being increasingly penalised for a crime you haven't committed".
Ivor Callely would contribute in his own small way to financial elder abuse. At a meeting of the Management Advisory Committee of the Department of Health on 16 December 2003, he undertook to bring to the attention of the Taoiseach, Bertie Ahern, concerns that had arisen about the legality of charges levied on long-term patients in health board institutions. He also undertook to brief the senior minister in the Department, Micheál Martin, who was absent at that part of the meeting. He failed to raise the issue with Bertie Ahern in any meaningful way – he mentioned it to him casually as they were hanging about the back of the Dáil chamber waiting to walk through the voting lobbies. He failed to mention it at all to Micheál Martin.
But of the Ministers that had any responsibility for this debacle over 28 years (since 1976) Ivor Callely is not among the more culpable. For 28 years the Department of Health was aware that there were legal problems with the practice of charging people entitled to medical cards for long term residential care in Health Board residential institutions. Repeatedly the Department was advised by its own legal adviser and by outside lawyers that what was being done was unlawful. On several occasions commitments were made to deal with the issue through a simple legislative change but that never happened. Several of the Ministers who held office during this period are seriously culpable. Only one of the 13 Ministers who held office during this period emerge from this saga with an enhanced reputation and that is the Minister who held office for the briefest period (2 months in early 1987), John Boland. The Ministers who bear most responsibility were:
^Brendan Corish, the former leader of the Labour Party and Minister for Health from 1973 to 1977 presided over the origin to this debacle when clearly illegal regulations were issued depriving long-stay patients in State residential institutions of their medical cards.
^Charles Haughey, who was Minister from 1977 to 1979 consciously decided in mid-1979 not to deal with the illegality issue at a time.
^Rory O'Hanlon, who was the Fianna FáilMinister for Health from 1987 to 1991, failed to introduce amending legislation, even though the then government authorised him to do so and the legislation was already in draft form. Several reports advised him of the illegality of the charges.
^John O Connell, who was Minister from February 1992 to January 1993 ignored the recommendations of the Commission on Health Funding that proposed the issue be dealt with by means of legislative change.
^Brendan Howlin of Labour was Minister for Health from January 1993 to November 1994 and even though his own health strategy made a commitment to clearing up the legal mess concerning residential charges, he failed to follow through.
And Micheál Martin.
^Micheál Martin has repeatedly insisted he had no knowledge of the problems surrounding charges for residential care while he was Minister. Yet his own health strategy, announced with such fanfare in November 2001 explicitly acknowledged these difficulties and made a commitment to introduce new legislation to provide "a clear framework for financing long stay care for older people".
Aside from the issue of whether he was explicitly briefed on a devastating legal opinion on these charges, made available to his Department and included in papers handed to him in December 2003, he must have been aware of two reports issued publicly that addressed the issue and raised warnings about the legality of what was being done. One was a report of the Ombudsman and the other was a report issued by the Human Rights Commission to which his Department issued a detailed response.
What is most damning about the affair however is the insight it give to the workings of the Department of Health and Children. The report written by John Travers repeatedly refers to "long term systemic failure at the overall level of the Department", extending back nearly 30 years.
Questions also arise about the Department of Finance. Certainly from early 1987 onwards the Department was aware of the issues involved and must have appreciated the potential financial risks. In spite of that however nothing was done for 17 years.
It began with Erskine Childers, then Tánaiste and Minister for Health and later President of Ireland. In 1970, he was instrumental in having the Oireachtas pass legislation providing for comprehensive reform of the health services. It led to the establishment of the health boards which have now just been abolished. It also provided for medical cards to be made available to those on lower incomes and these entitled their holders to a range of free health services.
The 1970 Act also provided for charges to be levied for what were called "in-patient services", which were defined as institutional services provided for people in hospitals, convalescent homes or homes for people suffering from physical or mental disability. The Act made it absolutely clear that medical card holders could not be charged for such services.
However under a previous Act, the Health Act of 1947, charges could be levied for what were called "institutional services", which included maintenance in an institution and some medical treatments. Predictably, confusion arose over what were "in patient services" for which charges could not be levied on medical card holders, and "institutional services" for which charges could be levied.
The confusion was resolved or should have been resolved in a judgment in 1976 of the then President of the High Court, Tom Finlay (later chief justice) in a case known as Re Maud McInerney, A Ward of Court. Mr Justice Finlay ruled that charges levied on this person for her long term care in St Brigid's Home, at Crooksling, Co Dublin were unlawful. He applied a two tiered test to determining whether an institution provided merely "institutional services" or "in-patient services". The first was the nature of the institution itself.
If it were a "county home or similar institution" then it was a provider of "institutional services" but if it were more in the nature of a "hospital, convalescent home or home for persons suffering from physical or mental disability" then it was a "in patients" institution.
The second test had to do with the nature of the services provided. He held that if it involved "any ingredient of medical care or nursing", then it was an in-patients" institution and no charge could be levied for services provided in such institutions to medical card holders.
The Supreme Court, on appeal, upheld the judgment of Mr Justice Finlay.
The Department of Health responded in 1976 to the difficulty arising from these judgments by issuing a regulation which essentially changed the medical card entitlements of people in institutional care. It stated that anybody in institutional care was no longer entitled to a medical card and therefore could be charged for the services provided even in these "in-patients" institutions.
It is evident that right from the beginning there were grave doubts about the legality of what was being done. Almost immediately the Eastern Health Board was of the view that the law had be changed to enable this to be done. The Department of Health's own legal adviser advised against doing this almost right away. It is not at all clear why, immediately after the McInerney judgments, Brendan Corish did not seek to amend the 1970 Act to give legal basis to the imposition of charges on all patients in the institutions concerned, given that it was (and remains) Labour Party policy that residential care should not be provided free to medical card holders.
In 1978, by which time Charles Haughey had become Minister for Health, a legal challenge was made to charges imposed by the Eastern Health Board on two medical card holders for "in-patient" services. The Eastern Health Board sought legal advice from two of the then most eminent barristers, Thomas McCann, who, incidentally remains one of the foremost experts on tax law, and Ronan Keane, later a judge and, until last year, chief justice.
The barristers advised the Board against attempting to defend the imposition of charges and they urged that the difficulties that had arisen "can only be reversed by amending legislation". The Eastern Health Board brought this authoritative legal opinion to the attention of the Department of Health and strongly advised that amending legislation be introduced, in view of the very serious financial implications a challenge to the imposition of the charges could cause. A few months later the Registrar of the Wards of Courts raised similar concerns.
In June 1979 the legal adviser in the Department of Health again raised concerns. A proposal was made again to change the 1970 Health Act but Charles Haughey was quoted as "not keen to pursue this course of action". Why is not recorded, but it may have had to do with concerns Charles Haughey may have had at the time that any such initiative on his part might impact on his chances of becoming leader of Fianna Fáil and Taoiseach (he was elected Taoiseach in December 1979).
The only serious initiative on this deepening legal fiasco was undertaken by John Boland in February 1987. He had been Minister for Health only from January 1987, when Labour walked out of Garret FitzGerald's government and, as a consequence, Barry Desmond ceased to be Minister for Health. Along with other serving Fine Gael Ministers, John Boland, who had been Minister for the Environment, took on additional ministerial responsibility, (in his case the Health portfolio) and he held the brief for just two months.
But during that two months he attempted to deal with the nursing home charges as no other Minister for Health did, either before him or afterwards, until Mary Harney was forced into action in December last.
Heads of a Bill were drawn up which provided a proper legal basis for the disputed charges and this got government approval on 5 February 1987. But that minority Fine Gael government went out of office on 10 March 1987 before the proposed Bill could be introduced.
On that 10 March 1987 Charles Haughey became Taoiseach again and Rory O'Hanlon was appointed Minister for Health. The new government considered the Bill that John Boland was to introduce and initially decided to proceed with it. But before that occurred there was a discussion about this between Charles Haughey, Rory O'Hanlon and the new Minister for Finance, Ray McSharry, after which nothing was done.
Rory O'Hanlon now refuses to disclose what happened because he believes the Ceann Comhairle of the Dáil (the position he now holds) should not be drawn into public controversy. Charles Haughey and Ray McSharry are out of politics.
A crucial significance of this is that the involvement of Ray McSharry in the discussions drew the Department of Finance directly into the picture. Finance must have been alarmed at the potential cost of the illegal charges regime and it is difficult to see how it could not have remained appraised of the issue subsequently. In spite of that however nothing was done for a further 17 years.
However a few months after the proposed Bill seems to have been dropped, Rory O'Hanlon announced the establishment of a Commission on Health Funding on 5th June 1987. It was chaired by Miriam Hederman-O'Brien, who previously had chaired the Commission on Taxation.
The Commission report published in September of 1989 made specific reference to the legal confusion surrounding the charges for residential care. It stated: "the law should be revised to specify clearly the circumstances in which charges are payable and to standardize the amount of personal allowable income above which the charges should be levied".
Nothing was done.
On 30 May 1991 Rory O'Hanlon announced in the course of a Dáil debate that the Department would carry out a review of the charges applicable to persons in long stay care in health board institutions.
The report charges applicable to persons in long stay care was published in August 1992, by which time Dr John O Connell, the former Labour TD but by then Fianna Fáil TD, had become Minister for Health in the government of Albert Reynolds. The report noted: "There is considerable uncertainty about the legal validity of the application of the charges in very many cases as issues which arose from the Supreme Court judgment (in 1976) have not subsequently been satisfactorily resolved". It recommended the amendment of the 1970 Health Act.
Nothing was done.
Brendan Howlin, the Wexford Labour TD, became Minister for Health in January 1993 in the Fianna Fail-Labour government led by Albert Reynolds and Dick Spring. In April 1994 he published that government's health strategy, "Shaping a Healthier Future". This health strategy document noted: "The principle has always been accepted that people taken into long-term care should contribute from their incomes towards the cost of their maintenance; however the legislation gives rise to anomalies and inequities as regards the charges that can be made. The legislation will be amended to provide a clearer and fairer basis for these contributions towards the cost of long-term maintenance".
Nothing was done.
Micheál Martin became Minister for Health and Children in January 2000. A year later, in January 2001 the Ombudsman published a report on the payment of nursing homes subventions by Health Boards. In the course of that report he made a number of observations about the nursing home charges which should have raised alarm. He stated regulations were likely to be invalid. He criticised the Department of Health in failing to review practices in relation to nursing home subventions where legal concerns had been raised by the Department's own legal adviser and others.
But the most telling indication that Micheál Martin must have been fully aware of the problems surrounding residential charges is what was contained in his own health strategy published in November 2001 amid a cacophony of public relations noise. It was to be a trump card in the government's hand for the forthcoming election.
Paragraph 36 of Chapter 5 of the strategy has the following headline commitment: "New legislation to provide for clear statutory provisions on entitlement will be introduced". And under that heading there is the following: "(New) legislation will include provision for: a clear framework for financing of long-stay care for older people".
Then another headline commitment (number 37) "Eligibility arrangements will be simplified and clarified". And under that headline: "In his report on the Nursing Home Subvention Scheme, the Ombudsman has drawn attention to the uncertainty surrounding the eligibility of older people for long-term residential care. Clarification of entitlement in this regard will be given particular attention in the general review of legislation on entitlement referred to above".
The question arises, how could Micheál Martin not have been aware of problems asociated with charges for long term residential care and include in his health strategy a commitment for a "clear framework for financing long-stay care for older people" and the reference to the very report of the Ombudsman which raised questions about the charges and the failure of the Department of Health to have regard to its own legal advice?
A month later, on 6 December 2000, an initiative was announced which, ultimately, brought the issue of residential charges to a head. It was the bold announcement in his 2001 budget speech by Charlie McCreevy: "I am pleased to announce that from 1 July 2001, entitlement to the medical card is being extended to all those aged 70 years or over".
The implementing legislation, amended the 1970 Act by stating that a person who is not less than 70 years of age and is ordinarily resident in the State shall have entitlement to a medical card. This meant that, unlike other medical card holders, those aged 70 and over had a statutory entitlement to a medical card and it meant there was an even clearer legal difficulty in requiring such persons to pay charges for long-term residential care in health board institutions. Here was a clear perception within the Department of Health that this was a legal minefield but, again, nothing was done.
There is a further dimension to this. In determining the cost of the extension of the medical card to everyone aged 70 and over, neither the Department of Health nor the Department of Finance appears to have adverted to the possible cost of this initiative in terms of residential care.
In 2002 a number of legal actions on residential charges were taken against the South Eastern Health Board (SEHB). The Board sought legal advice from two barristers, Douglas Clarke BL and Donal O' Donnell SC. The observations of these barristers not just on the issue of residential charges but on the general legal arrangements for the health services are devastating. They wrote: "It is a remarkable feature of the health services in Ireland that such vast sums of money are expended on a system, the statutory basis for which is so confused and haphazard and where practice seems so dislocated from statutory theory". They wondered why an amendment to existing legislation was not undertaken to regularise the charging of medical card holders for services that should be provided free.
They wrote of an "ad hoc" allocation of budgetary resources, which raised the question "whether the entire system…. which can give rise to such arbitrary distinctions with enormous impact on individuals and families can be valid… the system is lacking in coherence and consistency that it is likely that individual determinations will always be open to successful (legal) challenge…. If the result is that arbitrary and ad hoc, distinctions are made between essentially similar members of the public then prima facie that would be, at a minimum, a breach of the guarantee of equality contained in Article 40.1 of the Constitution".
They went on to state that the health board was not entitled to deprive persons aged 70 and over of their medical cards or otherwise to levy charges on them for institutional care. They said "We are not aware of any statutory justification for the practice of removing medical cards from patients in receipt of long term care". They recommended the introduction of "a comprehensive legislative framework, which squarely addresses the problem of long term care for the aged".
This legal opinion was discussed by the South Eastern Health Board with the Department of Health at the end of 2002 and early 2003 and was also communicated to other health boards. How such a devastating legal opinion was not brought immediately to the attention of the Minister, Micheál Martin, immediately it became available to his Department has not been revealed. Neither is it clear how even now the issues raised in this legal opinion are being addressed by the Department.
Micheál Martin might have been prompted once more to enquire what was going on by the publication of a report in April 2003 by the Human Rights Commission Older people in Long Stay Care by a barrister, specializing in welfare law and citizen's rights, Ita Mangan. She noted: "Commitments to clarify entitlements have been given in the Health Strategy in 1994 and again in the Health Strategy 2001 but have not been implemented". She said the withdrawal of medical cards from persons aged 70 and over was "clearly illegal".
The Department of Health responded to this document of the Human Rights Commission but did not deal directly with the issue of residential charges. It said there was a review of "all existing legislation" which was "on going" in the Department. It said the review was expected to be competed in the current year (2003), when proposals for reform would be submitted to government. The Travers report noted the review was not completed in 2003 and has not been completed since either.
Then there were the three meetings of the Department of Health Management Advisory Committee on 16 December 2003, 29 March 2004 and 18 October 2004. At the December 2003 meeting the damning legal opinion of Douglas Clarke BL and Donal O'Donnell SC was disclosed in papers prepared for the meeting. Micheál Martin was late for the meting but his two junior ministers, Ivor Callely and Tim O'Malley were both present for the brief discussion on residential charges and both were fully aware of the significance of what was involved. As stated above, Ivor Callely undertook to report to the Taoiseach and the senior Minister on the issue but failed to do so. Tim O Malley appears to have done nothing even though, as the junior Minister with responsibility for the care of mentally ill patients, the issue had direct relevance to his brief (mentally ill long term patients also had their medical cards withdrawn from them).
At that December meeting it was agreed to seek the advice of the Attorney General on the issue. This was minuted. At the subsequent Management Advisory Committee meeting in March 2004 a question was raised whether the Attorney General had been appraised of the situation and it was stated wrongly that he had been.
The Secretary General of the Department, Micheál Kelly, was co-chairman of that meeting and, apparently, did not intervene to correct this mis-statement. The minutes of that March meeting stated: "Department had sought legal advice in relation to long stay charges". At the October 2004 meeting another mistaken impression was conveyed that the Department was reviewing the legal options. Nobody from the Department intervened to correct that false impression.
It was only when Fine Gael leader, Enda Kenny, on prompting from his colleague, John Perry, raised the issue in October 2004 that the Attorney General's advice was sought and only then was the issue addressed. But addressed in a way that the Supreme Court found unconstitutional.
The financial fall-out from all of this could be well in excess of €2 billion by far the greatest State financial fiasco of modern times.