Identifier
Created
Classification
Origin
05DUBLIN1350
2005-11-02 17:29:00
UNCLASSIFIED
Embassy Dublin
Cable title:  

SCENE-SETTER FOR HHS DEPUTY SECRETARY ALEX M. AZAR

Tags:  OVIP OTRA TBIO SOCI KSCA PREL EUN EI 
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UNCLAS SECTION 01 OF 02 DUBLIN 001350 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: OVIP OTRA TBIO SOCI KSCA PREL EUN EI
SUBJECT: SCENE-SETTER FOR HHS DEPUTY SECRETARY ALEX M. AZAR

REF: STATE 191854

UNCLAS SECTION 01 OF 02 DUBLIN 001350

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: OVIP OTRA TBIO SOCI KSCA PREL EUN EI
SUBJECT: SCENE-SETTER FOR HHS DEPUTY SECRETARY ALEX M. AZAR

REF: STATE 191854


1. Embassy Dublin warmly welcomes your upcoming visit to
Ireland. Senior Irish policy-makers, academic leaders, and
industry standouts look forward to substantive exchanges with
you on health sector issues. The Embassy is planning a
reception in your honor that will bring together officials
and health practitioners who oversee Ireland's health system,
as well as representatives of firms involved in research and
development in health-related fields, particularly
biopharmaceuticals. The Embassy sees your visit as an
opportunity to build upon the successful bilateral links
established by HHS leadership in recent years, including the
U.S.-Ireland R&D Partnership that was announced last January.
These links have made cooperation on health issues an
important dimension of overall U.S.-Irish relations.

The Economic Backdrop: Prosperity and Competitiveness
-------------- --------------


2. Your visit comes at a time of unprecedented economic
prosperity and national confidence in Ireland. Once the
"sick man" of the European Union, Ireland emerged from the
Celtic Tiger period of the 1990s as one of the richest EU
Member States, largely on the strength of government policies
espousing open trade and investment, low corporate tax rates,
low government debt, and prudent use of EU support funds.
Ireland boasts Europe's lowest unemployment rate (at 4.2
percent) and is poised to lead Member States in economic
growth (at 5 percent) for the second consecutive year.
Perhaps the most visible sign of Ireland's success has been
the recent influx of immigrants, which has reversed the
country's decades-old image as a source of migrs.
Plentiful work opportunities have drawn an estimated 100,000
people to Ireland since May 2004, primarily from the EU's new
Member States.


3. Notwithstanding this success, Irish policy-makers are
concerned about Ireland's competitiveness, particularly with
the emergence of India and China as alternative, lower-cost
investment destinations. Irish strategy has focused on

moving out of simple manufacturing into innovative,
higher-value goods and services. This approach will require
an education system that can produce graduates with skills in
technology and physical sciences to support a knowledge-based
economy. Currently, however, the education system is not
producing sufficient numbers of graduates in these fields to
fill high-skill positions in foreign-invested firms.
Moreover, universities face funding shortfalls (since they
cannot charge tuition to Irish students),which has hampered
efforts to restructure curricula and to build R&D facilities
in line with the economy's needs. You will have an
opportunity to discuss these challenges at events involving
academics at the Wyeth biopharmaceutical campus, Science
Foundation Ireland, and Trinity College.

A Political Snapshot: Looming Elections
--------------


4. Irish political parties have already begun public
posturing for the general elections scheduled for May 2007.
In the upcoming campaign, the governing Fianna Fail party,
led by Prime Minister (Taoiseach) Bertie Ahern, will attempt
to secure a third 5-year term in office by emphasizing
Ireland's economic success. Fianna Fail will also underscore
its concern for public welfare issues, with social spending
set to rise in the 2006 Government budget. Opposition
parties, led by Fine Gail and Labor, see the Government as
vulnerable on social welfare and have begun to announce party
platforms calling for more generous social benefits. This
approach flows from the public perception that the rising
cost of living associated with economic growth has placed
burdens on some segments of society, especially young working
families.

Health Care: A Hot-Button Social Welfare Issue
-------------- -


5. One social welfare issue that will figure significantly
in the elections is health care, or, more specifically, the
perception that the health sector has not kept pace with
Ireland's rapid economic rise. Ireland's "mixed" health care
system features public and private hospitals and entitles
persons over 70 or who fall within the poorest one-third of
the population to free health services and medicine. The
system, however, has several high-profile deficiencies,

DUBLIN 00001350 002 OF 002


including the following:

A) Waiting Times. The length of time required for service,
even for minor surgery, can stretch to years for poorer
patients lacking health insurance. Capacity problems,
reflected in a shortage of hospital beds (3 per 1,000
population, versus the EU average of 4.4) has contributed to
this problem.

B) Performance. Ireland ranks among the lowest one-third of
OECD countries for infant mortality, child immunizations, and
life expectancy at birth for men and women. Ireland also
scores poorly for years of life lost due to female breast
cancer and has the highest rate in the OECD for male and
female mortality from heart attack.

C) Inequity. In Ireland, persons with private insurance
(roughly 52 percent of the population) not only have speedier
access to care, but they and their doctors have incentives to
maximize treatments in subsidized public facilities. For
example, the small per diem charge (usually euro 55) that the
privately insured pay for public hospital beds is below the
economic cost of providing the bed. Public hospitals often
ring-fence up to 20 percent of beds for private use, even
when uninsured patients on waiting lists have greater medical
need.

D) Inefficient spending. After Government funding for the
health system was cut in the 1980s, public health expenditure
as a proportion of national income rocketed in the 1990s
above the EU and OECD averages. Health spending grew from
euro 2 billion in 1990 to roughly euro 8 billion in 2002.
The persistence of health system problems, however, has
created the impression that increased funds have not been
well spent, if not wasted.

The Deputy Prime Minister (Tanaiste) and leader of the
governing coalition Progressive Democrats party, Mary Harney,
took over as Health Minister in 2004 with promises of reform
to redress these deficiencies, but progress has not been
evident.


6. In a recent discussion with the Embassy, Irish think-tank
analysts partly attributed the health system's failures to
administrative confusion. In 2005, regional health boards
were consolidated into the Health Service Executive (HSE),a
unitary government body with responsibility for managing
health care nationwide. The Department of Health and
Children, however, still has responsibility for overall
health policy. The challenge has been for the Health
Department to implement policy reforms, even though the HSE,
as the health system's manager, controls the government's
euro 10 billion health care budget (roughly 20 percent of
total government spending). Deputy Prime Minister Harney and
HSE CEO Brendan Drumm have differed publicly, for example, on
ways to address hospital bed shortages. Your separate
meetings with Harney and Drumm should offer insights on these
administrative challenges.

The U.S.-Ireland R&D Partnership
--------------


7. There will be great interest during your visit in the
possibility of advancing the U.S.-Ireland R&D Partnership,
which was announced in January 2005 to promote cooperation
among the United States, the Republic of Ireland, and
Northern Ireland in several medical/biotechnology fields.
The Partnership has already yielded exchanges on diabetes,
and there have been recent Irish proposals for a workshop on
cystic fibrosis. Many of those involved in the Partnership
will attend the Embassy reception and the Science Foundation
Ireland lunch, and they have expressed their hope that you
will be able to announce the U.S. members of the Partnership
Steering Group, i.e., the lead coordinating committee.
Northern Ireland and Republic of Ireland participants believe
that the Partnership can take a more structured, long-term
approach to trilateral cooperation once the Steering Group is
fully appointed.
DALY