James Reilly (Dublin North, Fine Gael)

The HSE will start by giving approval to those applications processed to final stage in recent weeks in the order in which they were received. As of mid-May, 22,277 people were in receipt of State support through the nursing homes support scheme versus 21,421 at the end of 2010. My Department has estimated that the total number of people covered by the scheme by year end should be almost 24,000, a net increase of 1,700 compared with mid-May. This increase will be financed out of a range of identified savings.

Before going into further detail, I will give a little background on the scheme. The nursing homes support scheme is a system of financial support for individuals in public, voluntary and approved private nursing homes. The scheme is available to anyone assessed as needing long-term nursing home care, including dementia-specific nursing home care. The legislation underpinning the scheme enshrines the principles of a resource cap, patient choice and funding that follows the patient. In 2010, the total long-term residential care budget was €979 million. The 2011 budget is €1.011 billion. This budget covers residents who are availing of the fair deal scheme as well as residents covered by various transitional arrangements.

The House will know that, in May, I became aware of a potentially serious shortfall in the 2011 budget for the nursing homes support scheme. There appeared to be a number of issues. First, it is clear that the previous Government grossly under-provided for the scheme from a budgetary perspective. Second, it seems that a series of factors, including greater than expected demand, were creating significant financial difficulties for the scheme. Third, preliminary indications suggested that ancillary services, such as physiotherapy, occupational therapy, speech and language therapy and drugs services, which were not intended to be included under the umbrella of the fair deal scheme, were in fact being funded by its subhead or pot of money. While it is clear that these services were being provided to residents in nursing homes, this practice had nonetheless contributed to the emerging deficit in the fair deal scheme.

In response to this new information, I asked for a full examination of the funding situation by my officials and the HSE. I received the report on this examination last Friday. Before I go into some of the details of the report, I would like to make it clear that the report's conclusions and forecast are not as definitive as I would have wished. A lack of reliable historical data, combined with a multiplicity of different accounting systems, has made it difficult to drill down into the scheme in the way I would want. Nevertheless, the examination provided enough data for the report to reach a number of conclusions.

The report makes it clear that a number of factors are putting pressure on the fair deal budget for 2011. These include an increase in nursing home costs and an unexpected and so far unexplained increase in the average length of stay for nursing home patients, which was two and a half years in 2009 and has now risen to more than four years, resulting in a higher net demand for nursing home places. As a result of these and other factors, the report indicated that the nursing home support scheme, even if there were no net additions to the scheme for the remainder of the year, was likely to face a deficit of €36 million this year. It is also clear that payments from the fair deal subhead have been used to cover ancillary services such as therapies, drugs and medical services. It was initially estimated that the total cost of these ancillary services was approximately €100 million. However, further examination by the HSE has indicated that only €48 million of ancillary costs were billed to the fair deal subhead.

To seek to deliver the 1,700 net increase in residents under the scheme for the remainder of this year, other savings and income will be used to support the scheme. Expected savings of up to €30 million will be made in non-service related spending. Long stay in-patient charges, which have not changed since 2008 and should be increased annually, will also be increased so as to realise additional income of some €12 million in a full year. Despite the current economic climate private nursing homes received price increases over the past nine months. The annual cost of these increases is approximately €20 million. In my view, these increases are not sustainable in the current financial situation. I have instructed the National Treatment Purchase Fund to renegotiate the price increases for private nursing home beds, which were negotiated by the private nursing homes last year. This will be done with a view to producing further savings.

I must emphasise that these savings have been identified as part of a wider review of the financial position of the health system. As Deputies will be aware, there have been significant overruns in the overall health budget so far this year. I hope to shortly announce details of the actions that will be taken to address this wider financial deficit and to support the HSE in its responsibility to operate within this year's financial provision.

I have already indicated that the examination to date has not been asdefinitive or comprehensive as I, and I am sure Members of this House, would wish. In the short term, I have asked the HSE to put in place additional and more rigorous governance and reporting measures. My officials will closely monitor developments over the remainder of the year. I will also consider whether external auditors should be used to help bring greater clarity to the situation in the future. I am anxious to identify the reason for the unforeseen increase in applications, the increase in the average length of stay in nursing homes and some of the unexpected monthly variations in approvals under the scheme. I am requesting the HSE to undertake a clinical audit on the appropriateness of care and admission.

Over the longer term, I am determined that there should be a full review of the fair deal scheme, as outlined in the programme for Government. This review will look at the ongoing sustainability of the scheme, the relative costs of public versus private provision and the balance of funding between residential and community care. We must assist as many older people as possible to remain in their homes and communities for as long as possible. More than 95% of older people do stay at home and remain there, which is only right and proper. Regardless of how kind and effective an institution is, people almost always prefer the familiarity and independence of their home. However, it is also vital that the small minority who do end up in long term residential care are able to live in a surrounding that is as comfortable and free from worry as possible. I am acutely aware of the need to plan for an aging population. This is more than a financial challenge. It is a challenge to us as a society to treat our older people with the care and dignity that they so richly deserve. Our goal must be nothing less than to deliver a comprehensive, person-centred service that promotes health, well-being and quality of life.

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