Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the select committee for giving me the opportunity to present the Supplementary Estimate for Vote 38. The total additional funding being sought for 2015 is €665 million. However, this figure is offset by the receipt of an additional €65 million in respect of the UK-Ireland bilateral health care reimbursement agreement, leaving a net requirement of €600 million, as indicated on budget day.

The Department of Health is one of many Departments seeking a Supplementary Estimate this year. While the amount sought is significant, it is worth noting that it represents less than 5% of overall health expenditure. In percentage terms, the Department of Health does not have the largest Supplementary Estimate this year, but the Supplementary Estimate does recognise the particular challenges to be balanced in the health sector and the priority the Government attaches to addressing unmet needs.

Rising employment levels and an improving economy have made extra spending on the health service and in other priority areas of public expenditure possible, while still comfortably achieving our deficit and debt reduction targets. We need to keep the recovery going and the economy strong in order that in the years to come we can hire more nurses, therapists and medical specialists and provide more services and new infrastructure. We must not repeat the mistakes of the past.

There are significant drivers of demand and costs within health services which are a source of pressure on health budgets. We face a growing and ageing population, with a considerable burden of chronic illness. New expensive technologies are developed and approved every year. There will always be more that we would like to do in the health service than we can afford, but thankfully, because of our very strong economic recovery, we can afford to do more now than we could during the economic crisis.

It is welcome that this year's economic performance has provided us with scope to significantly increase budgets and provide for additional acute hospital capacity, long-stay and home support for older people, new drugs and appliances, additional discretionary medical cards and access to universal GP services for the very young and the very old for the first time. In each of these service areas the funding sought will allow additional people in need of health and social care to benefit. There is also provision in the Supplementary Estimate for unavoidable costs in 2015 outside these service areas. It is preferable, where there is room to do so, that these be addressed without the need for reductions in service areas. It is also welcome that, in general, where responses and service improvements have been approved and implemented in 2015, the funding is in place for their continuation into 2016. This will provide an enhanced basis on which to address the health needs of the population next year.

I will now set out the items making up the Supplementary Estimate. During the course of 2015 I took the initiative to discuss with Government colleagues the need to anticipate and deal with emerging problems in a number of critical areas of the health service. In particular, specific target initiatives were approved to reduce delayed discharges in acute hospitals, waiting lists and emergency department overcrowding. We all know that the health service is constrained in its capacity to respond to growing demands, particularly for acute hospital services. While we cannot introduce all the capacity required overnight, we worked with hospitals and community services to address responses that could be introduced relatively quickly.

The problems in emergency departments are the manifestation of wider operational and capacity weaknesses. The emergency department task force was convened last December and came up with a set of recommendations to reduce emergency department overcrowding. I acted to support their implementation and secured an additional €74 million to do so. This funding came on top of measures already taken in budget 2015, when the Government provided €25 million to support services that provided alternatives to and relieve pressure on acute hospitals. This funding has allowed us to reduce the waiting time for the fair deal nursing home support scheme from 15 weeks to four. This cost approximately €44 million and an additional €35 million will be provided next year to keep the waiting time at two to four weeks. It has also allowed us to open another 150 community beds, including at Mount Carmel Community Hospital, formerly a private hospital, and at Moorehall Lodge in Drogheda under a public private partnership arrangement. These and other measures have, in turn, reduced the number of delayed discharges in hospitals from 850 to 558 as of 1 December. This means that almost 300 acute beds have been freed up and are available every day to treat acutely ill patients.

We have also used the funding to keep patients out of hospital altogether or allow them to return home earlier through community intervention teams. These are nurse-led teams of health professionals who provide a rapid and integrated response in the community or home for patients with an acute episode of an illness who require enhanced services for a defined, short period of time. The community intervention teams provide a range of services, including administration of intravenous antibiotics at home, wound care and dressings and enhanced nurse monitoring following fractures, falls or surgery. Last month an infusion service commenced in north Dublin. This community based service provided by the community intervention team is linked with Dublin's northside hospitals.

There are currently ten community intervention teams in operation across the country and it is expected that a new team will commence operations in Waterford shortly, under CareLock. To date this year, more than 16,500 patients have received a community intervention team service. On average, this equates to a saving of between five and ten hospital bed days per patient and represents a significant saving on hospital resources. It is better for patients and avoids unnecessary emergency department visits and hospitals stays. We need to do a lot more of this in the years to come.

At the start of the year I put in place maximum permissible waiting times for inpatient and day case treatment and outpatient appointments of 18 months by 30 June 2015 and 15 months by year end. Additional funding of €51 million has been provided to ensure that these maximum waiting times are achieved. The funding provided is intended to fully utilise capacity across public and voluntary hospitals as well as outsourcing activity where the capacity is not available to meet patient needs within the maximum allowable waiting time.

The latest NTPF figures, published yesterday, continue to show improvements in waiting times with significant reduction in those waiting longest now clearly evident. For November, reductions were achieved in the total inpatient day case waiting list, and in the numbers of patients waiting longer than 15 months and waiting longer than 18 months. Similarly, there are reductions in the total number of people waiting for outpatient appointments, which has now fallen below 386,000 for the first time this year. As Deputies will be aware those figures include anybody who is waiting any amount of time, even if only a few weeks. Through facilitating additional clinics outside conventional working hours or by outsourcing where capacity is limited, the end of November sees a reduction of more than 11,000 in the overall outpatient waiting lists and of more than 10,000 in the number of people waiting more than 15 months for appointments. It is encouraging to see that the number of people waiting more than 18 months has also decreased by 4,000. The reductions being achieved are very welcome and I want to ensure these very positive trends are sustained and continue. Further additional funding of €18 million was provided in July for a winter initiative, which includes the provision of approximately 300 additional hospital beds across the country in November and December.

The situation in emergency departments is extremely challenging and I recognise the difficulties experienced by patients and the frustration of staff. However, we are seeing some improvement as the measures taken and under way make a difference. These measures are fully in line with the recommendations of the emergency department task force and are now generating results. The special delivery unit figures show an 8% drop in the number of patients on trolleys in November 2015 compared to November 2014. While INMO figures for the month of November show a 3% rise, it is significant that the INMO's own figures show an 8% drop in the second half of November. Today, for example, the special delivery unit recorded a peak of 325 people of trolleys, 135 for more than nine hours. That is a 20% drop on this day last year, when the number was 404. Today's figures for the Irish Nurses Midwives Organisation, taking both trolley watch and ward watch together, put the number at 411, down 15% on this time last year when the number was 461. It is nothing to celebrate but it shows we are moving in the right direction for the first time in a long time.

Further beds are due to open this month. We are headed in the right direction and must persist with the considerable efforts under way right across our health service. The November numbers, or today's numbers, whichever are used, are a big change from August when overcrowding was 40% worse than August 2014 and it is clear that things are not as bad as was the situation early in the new year when there were 500 to 600 people on trolleys. These were all real actions taken on my directions, with resources I secured, with the assistance of the Minister of State, Deputy Kathleen Lynch. These actions are starting to show some results. These are actions and solutions, not commentary, criticism and analysis which is all we get from the Opposition. The HSE director general and his team are working closely with the worst affected hospitals and there will be a continuing focus on achieving further improvements throughout the winter and into next year. There are expenditure overruns in acute hospitals, social care services and the PCRS and the factors are different in each case.

Acute hospitals are projected to be €149 million in deficit by the end of the year. The deficit is predominantly caused by non-pay cost pressures, with non-pay costs projected to grow by 5.5% in 2015 compared to 2014. All hospitals internationally are seeking to manage such costs which are associated with the increased age and complexity of patients being treated. I notice that many chest hospitals this year are €2 billion over budget. Additional payroll costs have been incurred including through the recruitment of some 2,300 additional acute hospital staff, of which significant numbers are front-line doctors and nurses. The impact of risk-related reports and difficulties in recruiting and retaining medical and nursing staff has put strong upward pressure on pay costs in some hospitals. Having a stable, well trained workforce in place is essential for the performance of hospitals in terms of access, quality and cost. With the removal of the recruitment moratorium this year progress was made by a number of hospitals in this area but others have more work to do. There has been underachievement in certain cost reduction initiatives. That being said, it is projected that €25 million in savings will be made on agency expenditure compared to 2014 levels, which is a significant saving. However, this is less than the target for the year and there will be a continuing focus on this area in 2016, particularly for those hospitals that did not make as much progress as expected. We see considerable variation from one hospital group to the next in terms of how they managed their budgets this year.

The primary care reimbursement service, PCRS, has a projected deficit of some €151 million. This comprises a deficit of €136 million on schemes administered centrally and a deficit of €15 million on locally administered schemes, including for the provision of aids and appliances, such as crutches and wheelchairs. The PCRS overspend is driven predominantly by increased expenditure on the long-term illness, LTI, and the GMS schemes, including high-tech medicines. The increased burden of chronic illness, including diabetes, is seeing the costs of the LTI scheme grow significantly.

The introduction and increased prescribing of new and innovative but highly expensive medicines is increasing the cost of the high-tech medicines scheme. Earlier this year, agreement was reached with the Irish Medical Organisation on a package of measures, including terms for the delivery of GP care without fees for all children under six years and the provision of GP care without fees to seniors aged 70 years and over. These represent the first phase in the delivery of universal health care. We intend to move on to children aged six to 12 years in the next phase. The introduction of universal GP services for the very young and the old has been highly successful. As of 1 December some 2,242 GPs or 93% of all GMS contract holders have signed under-six contracts. More than 214,000 children have been signed up for the new service.

The new enhanced service involves age-based preventive checks focused on health and well-being and the prevention of disease. These assessments are being carried out once when a child is aged two and again at age five. This is important in identifying issues such as childhood obesity early on. The contract also covers an agreed cycle of care for children under six years diagnosed with asthma, under which GPs are carrying out an annual review of each child. As of 1 December, 18,700 children have been registered for the new service under the Asthma Cycle of Care by their GPs. With regard to the universal GP service for seniors aged 70 or over, more than 49,000 people have already signed up for the service.

The HSE, Department and the IMO have commenced talks on a new comprehensive GP contract. A priority of these discussions will be further enhancement of chronic disease management for patients. As a first step in this process, agreement was reached on the introduction of a diabetes cycle of care for adult patients with type 2 diabetes who hold a medical card or GP visit card. The cycle of care aims to augment the service available to diabetic patients prior to the introduction of a comprehensive structured chronic disease programme. The cycle of care commenced on 1 December and to date more than 59,000 patients have been registered for the new service by their GPs.

On the increased costs of operating the PCRS, at the end of October there were 95,887 people covered by a discretionary medical card - the most recent figures are more than 100,000 - an increase of 23,000 since October 2014. This reflects the significant changes made to the rules and guidelines for discretionary medical cards more than a year ago.

Social care services give rise to a net requirement of €53 million additional funding. The main issue within social care relates to disability services with a deficit of €48 million. Significant staffing and once-off minor capital pressures have arisen in response to the enhanced regulatory focus by HIQA on disability residential services. This enhanced focus, with external inspection and publication of reports, is a very good thing and is in line with the legislation adopted by this House. The problems being identified by HIQA in disability services and in care for older people cannot be new, they must have been going on for decades. The difference is we are now doing something about it.

It is important that these improvements are planned and undertaken in a cost-effective manner and in line with the community-based model of care. This will be the focus of the use of significant additional ongoing funds provided to these services in 2016. The Supplementary Estimate also provides for pay cost pressures in respect of overnight residential staff in the disability sector.

Pension costs including pension lump sums require an additional €52 million. The scale and number of retirements in any financial period is difficult to predict with certainty and, in line with some other Departments with large numbers of staff, additional funding is required in 2015 to meet the pension entitlements of those retiring. In the main, these are front-line and clinical staff.

Payments are made by the HSE to the State Claims Agency for clinical indemnity, public liability and other awards and settlements. An additional requirement of €93 million is estimated for 2015. It is difficult to predict the exact expenditure in any one year as this is dependent on the number and severity of claims, particularly the number of high cost catastrophic birth injury claims. Another critical variable in projecting the cost is the uncertainty regarding whether these high value claims will be awarded lump sum payments by the courts, or whether they will be awarded a deferred periodic payment award pending the introduction of periodic payment orders on a statutory basis. I expect legislation to be enacted early next year to provide a statutory basis for periodic payment orders, whereby a court may decide that catastrophically injured people can receive the cost of future care in the form of annual payments instead of a lump sum award. If this legislation is enacted and works we may have an underspend in State claims next year, but we are not projecting for that.

The Government approved the independent symphysiotomy payment scheme and the scheme commenced in November 2014. It provides awards to women who have undergone surgical symphysiotomy or pubiotomy. It was estimated that approximately 350 women would be eligible to apply. In the event, 578 applications have been accepted by the scheme. There are approximately 140 applications still to be assessed. The scheme will conclude as soon as possible in 2016.

In 2012 the Medical Defence Union made a settlement with the State in respect of outstanding past liabilities relating to indemnity cover for medical consultants. Work is under way to delegate responsibility for managing these claims to the State Claims Agency. Pending completion of this work, payment of these claims must be made by my Department. It is estimated that €16 million of the Supplementary Estimate requirement will be sufficient to address these areas.

As Deputies may be aware, €131 million of once-off cash receipts from health insurers were built into the 2015 budgetary arithmetic. The HSE and VHI have now agreed terms which commit the HSE and VHI to work towards finalising a claims and payment arrangement and allows for an initial payment of more than €100 million before the end of 2015. This represents a substantial portion of outstanding private patient charges. I welcome the progress made in this area by the HSE, with the support of my Department and the VHI. Discussions are continuing between the HSE and other health insurers and I hope that these can also conclude positively and with agreement.

While I acknowledge that the extra funding being requested through this Supplementary Estimate is substantial, I am convinced that it facilitates much needed improvements in our health services. This additional funding, combined with the 2016 budget provision, will see us continue to use the fruits of economic growth to restore funding to our health service. In doing so we are maintaining and adapting existing levels of services and introducing enhancements in some priority areas. The above items, together with cash projections to year end, involve a gross requirement of €665 million. The total Supplementary Estimate request reduces to an Exchequer requirement of €600 million following the receipt of an additional payment under the UK-Ireland Reimbursement Agreement. In conclusion, I seek the committee's approval of the Supplementary Estimate, Vote 38.