Jerry Buttimer (Cork South Central, Fine Gael)
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The joint committee is in public session. I welcome to our meeting Dr. Ambrose McLoughlin, Secretary General of the Department of Health, Mr. Tony O' Brien, director general designate of the HSE, Mr. Fergal Lynch, assistant secretary, Department of Health, Ms Bairbre Nic Aongusa, assistant secretary, Mr. Paul Howard and Mr. Ray Mitchell. They are all very welcome. Dr. McLoughlin has joined us today to discuss the Department of Health's Statement of Strategy 2011-2014. Members should have received that strategy statement by e-mail last week and, if they do have a copy of it with them, we might have copies of it available. As this is Dr. McLoughlin's first official visit to the committee and engagement with us in his role as Secretary General, I welcome him, congratulate him on his appointment and wish him well during his tenure in his new and challenging position.

Before we commence I wish to remind the witnesses regarding privilege. Witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name in such a way as to make him or her identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or persons outside the House or an official either by name or in such a way as to make him or her identifiable. I invite Dr. McLoughlin to make his opening remarks.

Dr. Ambrose McLoughlin:

I thank the Chairman and members for welcoming me to this committee. I welcome this opportunity to appear before them to discuss the Department's Statement of Strategy 2011-2014. I am joined by colleagues from the Department - Dr. Fergal Lynch, deputy secretary general, Ms Bairbre Nic Aongusa, assistant secretary and Mr Tony O'Brien, director general designate of the HSE and also a member of the MAC at the Department.

The statement of strategy 2011-14 sets out the high level aims and objectives of the health system for that period. It also states the Department's functions and responsibilities in leading health service reform and identifies our strategic goals and programmes for improving health outcomes. This three-year period will be a time of very significant change for the health services. The programme for Government commits to the development of a universal single-tier health service, supported by universal health insurance, providing access to health services based on need rather than income. We must ensure that patients access care in an appropriate setting, which will require the improvement and development of community-based services through the primary care system. New models of care will be introduced across all services which will treat patients at the lowest level of complexity and provide quality services at the lowest cost. These ongoing initiatives will inform the most appropriate structure, staffing and organisation of services and also deliver greater productivity. Increasing efficiency and productivity will require changes in how, where and when people work. It will require greater flexibility in work practices and rosters to maximise the efficient delivery of services. This scale of reform combined with our financial and economic circumstances will present many and difficult challenges for the health services in the years ahead.

The statement of strategy sets out the process by which the Department will deliver on its role and strategic goals within this context. Total current expenditure for the public health service is being reduced by nearly €1.1 billion over the period 2011-2014 under the national recovery plan. However, in order to meet unavoidable pressures and Government commitments, in excess of €2 billion will have to be taken out of the health budget over the same period. The number of health service staff has been reduced from a peak of 111,000 in 2007 to fewer than 102,000 now, with a further 6,500 to depart by 2014. While this scale of financial and staff reductions has put pressure on the health system, the system has responded by delivering more with less.

With regard to delivery on the programme for Government, significant progress is being made on the implementation of the health integrated reform plan. Legislation is being progressed in regard to HSE governance, extending free GP care, risk equalisation and reference pricing. Reports have been published in regard to the disability value for money and policy review and the review of the Mental Health Act 2001. The special delivery unit continues its support to hospitals to maintain the downward trend in regard to numbers waiting in emergency departments. Implementation plans have been agreed for a number of clinical care programmes which will improve the quality of patient care, improve access and save money. Work is ongoing on the completion of the framework for smaller hospitals and on the development of hospital groups. The national carers' strategy has recently been published, the national positive ageing strategy is nearing completion and the national strategy on dementia will be developed by 2013. The reform of mental health services continues to progress in line with A Vision for Change and 13 of the old psychiatric hospitals have closed completely or have closed to new admissions. The policy framework for the future of public health 2012-20, Your Health is Your Wealth, is nearing completion. The report of the national substance misuse strategy was launched in February 2012 and an action plan to implement its recommendations is being developed. The special action group on obesity is progressing cross-sectoral measures to help halt the rise in obesity. Discussions are ongoing with a view to achieving further reductions in pharmaceutical costs and the use of generic alternatives. The health sector action plan continues to be implemented across the health sector. Key commitments include reviewing rosters, skill mix and staffing levels, increased use of redeployment and changing work practices.

These and related follow-on initiatives will form the Department's work programme for the coming years.

The Department's statement of strategy sets out what we want to achieve over this timeframe, how we intend to make it happen and how we will know, and to what extent, we have succeeded. We have organised our goals and actions by strategic programme areas. Programme 1 relates to fair access and sustainability. Programme 2 relates to patient safety and quality. Programme 3 relates to health and well-being. Programme 4 relates to primary care. Programme 5 relates to acute hospitals and programme 6 relates to specialised care services. However, it should be emphasised that four elements underpin and inform all of the strategic programmes: keeping people healthy; providing the health care people need; delivering high quality services; and getting the best value from the health system resources. The overall performance framework for the health system and the performance indicators developed under the framework will be used to assess the health system's progress in regard to its core objectives and will be reported on annually. That concludes my statement. Together with my colleagues I look forward to our discussion on the statement of strategy and related issues. We will take questions from members.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank members of staff of the HSE and the Department of Health who do tremendous work every day in delivering a health system for patients. I compliment all of the staff for the work they do.

Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome Dr. McLoughlin and wish Mr. Tony O'Brien all the best as director general designate of the HSE. The health system is going through a transformative stage in terms of governance of the HSE; in effect, it is bringing it back closer to the Department. The HSE will be challenged with significant difficulties this year in terms of a further budget reduction of €700 million to €750 million, which will have an impact on the capacity of the HSE to deliver health services.

It is important that we get clarity on the issue. I accept legislation is in place on governance structures and the current lines of demarcation. The HSE is facing a budget. Last year's budget has not lived up to the profiling of expenditure and the outturn to date. As far back as last March it was evident that the budget was not sustainable. At a meeting of the Committee of Public Accounts last June Mr. O'Brien's predecessor was adamant that the premise on which the budget was based was no longer feasible in terms of revenue-generating measures such as insurance, cost reductions, price referencing, generic substitution and agency staff. Budget difficulties in terms of sustainability were evident from an early stage. At the same time claims have been made that a profiling system is in place which allows the HSE to monitor its expenditure on a monthly basis and to know which hospital budgets have overrun and when difficulties arise, whereas previously such information was only available on a quarterly basis. One could ask why it took until September to make any effort to address the overrun. It is said that, traditionally, it was the case that when the HSE overran its budget supplementary support was always available at the end of the year.

Jerry Buttimer (Cork South Central, Fine Gael)
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We are discussing the health strategy.

Billy Kelleher (Cork North Central, Fianna Fail)
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Strategies are not much good without budgets. I am not being flippant but this is important in terms of the governance structures being put forward. Who will be responsible for formulating the budget for 2013 and who will be the accounting officer with responsibility for oversight of the spending of the budget? I do not understand the situation. Will it be Mr. Tony O'Brien or Dr. Ambrose McLoughlin as the accounting officer for the Department of Health? The lines of demarcation are blurred. We had cases in recent weeks where claims were made that the HSE introduced the proposed cuts of €130 million. We were told subsequently by the HSE that it was a Government decision. It is critically important that in the coming months we learn who is responsible for expenditure and oversight of the budget and who is ultimately the accounting officer. There is not much point in my going into the Dáil blaming the Minister for Health if it is not his fault, if a decision has been made by the HSE and if its board is still making decisions. We must have such information.

I do not expect a comment on the broader issue of primary care but it is a critical part of the overall strategy to remove patients from acute hospitals and to work through the primary care setting to ensure patients are treated as close to home as possible. Where does Dr. McLoughlin envisage funding will come from for physical infrastructure in the future in terms of the capital infrastructural development required for primary care settings throughout the country? Does he expect public private partnerships to be involved in some way or will the development be funded through a capital programme from the State's coffers? Those two issues are important.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I also welcome Dr. McLoughlin. This is his first opportunity to address the committee. I also join in wishing Mr. Tony O'Brien the very best in his new role and responsibilities.

Reference was made in the strategy and again in Dr. McLoughlin's address to total expenditure for the public health service being reduced by approximately €1.1 billion over the period 2011 to 2014. It is then stated that to meet what are described as unavoidable pressures and Government commitments in excess of €2 billion will have to be taken out of the health budget over the same period. Could Dr. McLoughlin explain the difference between the two figures? I cannot get clear in my head exactly what has been said. Could he tell us what is the projected cut year-on-year for 2013 and 2014? Does he have those figures? It is clear that cuts must take place in the context of a €2 billion reduction in budget.

The strategy is guided by the Government's promised health care reforms and a cornerstone of the reform was the roll-out of free GP care for all. Initially it was to apply to patients with long-term illness. We were told recently that draft legislation in that regard has run into difficulties because of complex legal matters and could be delayed by as much as a year. What is the position in that regard now and how soon will the initial steps be taken on the roll-out of free GP care for all?

A €10 million cut has been indicated for personal assistant services. How was the cut ever contemplated and can we be absolutely certain, given-----

Jerry Buttimer (Cork South Central, Fine Gael)
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We are discussing the health strategy document, not the budget.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I appreciate that but it is part of the budgetary aspect of the strategy. Let no one be under any illusion; it was €10 million over €40 million, a 25% hit. It is outrageous. Could we have certainty that the cut has been confined to the dustbin?

What of the €35 million ring-fenced for community mental health services? Again, Dr. McLoughlin made direct reference to the importance of the service, with which I fully agree. Could he give us an indication as to whether the Minister of State has been pick-pocketed of the so-called ring-fenced €35 million?

On the reducing cost of medicines - Dr. McLoughlin has some experience in the sector - the Health (Pricing and Supply of Medical Goods) Bill is going through the Oireachtas at present and we have been told progress has been made in talks with the pharmacy sector. However, there is growing evidence that there is not only a significant differential between the cost of branded products in the North compared to the South and between this jurisdiction and other EU member states but also between the generic alternatives. There are incredible indicators that there is as much profiteering with generic substitutes as could be the case with the branded products. What steps have been taken to ensure that real savings are made as a result of the passage of the legislation, which I support?

I could not let the moment pass without referring to the petty and cruel cut to support for people with coeliac disease. I have acknowledged previously that I am a parent of children with coeliac disease. We are not beneficiaries under a medical card scheme but many of those I know who are find it very difficult because the gluten-free food alternatives for people with coeliac disease are hugely expensive.

That is very problematic for those already on limited budgets because to qualify for a medical card, means tested as it is, they must be in fairly straitened economic circumstances. Will the witnesses give us some indication of consideration to reverse this decision or to replace-----

Jerry Buttimer (Cork South Central, Fine Gael)
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That is not part of the Department strategy document.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I will make my final points that are referred to in the document but I would appreciate a reference to coeliac disease in Dr. McLoughlin's reply.

Where stands the implementation group on universal health insurance? It was established last February and we have heard little of it since. When will it report?

My last question which Dr. McLoughlin referred to specifically in his remarks is on the framework for smaller hospitals. This has been promised repeatedly. Where and by whom is it being drawn up? Is there consultation with the smaller hospitals concerned? I have noticed the announcement this week of a voluntary coming together of some smaller hospitals in one of the Health Service Executive areas. Would the witnesses like to comment on that? To what extent is there public consultation regarding the preparation of the framework for smaller hospitals into the future?

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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I welcome Dr. McLoughlin and the other officials, including Mr. O'Brien. I wish them well in their roles in the future.

I find it difficult to take this document seriously. It is completely at odds with what we see on the ground in our hospitals, home care services, community care services and mental health services. Page 2 of the document refers to the Department's values, service and the need to operate to the highest standards of professionalism. I do not believe the health services on the ground are being operated by the Health Service Executive, at management level or by the Department, to professional standards. I do not believe, for instance, that the wholesale closure of beds in wards throughout the hospital system meets professional standards. I do not believe that the overcrowding in our accident and emergency departments or the lack of respect for patients on trolleys in corridors in those departments means that.

On the point of fairness and respect, one would imagine that would mean respect for patients. In very many cases our patients are being backed up in accident and emergency departments on trolleys and in wards. On the other hand, there are major delays for various services and waiting lists. A lady contacted me yesterday whose child is an urgent case for ear, nose and throat treatment. That child will have to wait 18 months for the first out patient appointment.

On the reference to openness and consultation, I hope that means there will be openness and consultation in the future to ensure that the views of stakeholders, and in particular the perspectives of patients and other service users, are at the heart of the decision making process. That is not my experience of openness and consultation, either by the Department or the Health Service Executive. My experience of it is that the Health Service Executive and the Department make their decision and go through a consultation process that is a farce. I hope it will change in the future.

This document is at variance with what we see on the ground and also with the recent cutbacks announced, I am not sure by whom. I agree with Deputy Kelleher on that. We are not sure who is running the health services now, whether it is the HSE, the Secretary General or the Minister. Page 18 of the report regarding disability services refers to helping people with disabilities achieve their full potential, including living as independently as possible. Obviously, it believes the way to do that is to cut €10 million from the personal assistant budget. How anyone could come up with that proposal is beyond me and is at variance with that point.

The same page refers to services to enhance the quality of life of older people, maintain their full potential and support them in their homes and communities. Six hundred thousand home help hours were cut in the budget earlier this year. That is at variance with the document in terms of what is happening on the ground. I find it difficult to take it seriously.

The document refers to the cutting of funding by more than €2 billion between 2011 and 2014. That is not achievable if we want a reasonable and effective health service for patients. The officials must know that. Have they not thought of alternative methods of funding a proper health service? Why not ensure that very wealthy people pay their fair share of taxation and that taxation is put to work to fund a proper health service and not the difficult service patients find themselves tied up in now? It is the duty and responsibility of senior management in both the HSE and the Department to examine alternative methods of funding, particularly funding from very wealthy individuals who are not paying their fair share of taxation. A modest wealth tax-----

Jerry Buttimer (Cork South Central, Fine Gael)
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The Deputy can make that point in the budget debate.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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-----would provide a huge amount of funding to properly fund the service.

Jerry Buttimer (Cork South Central, Fine Gael)
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Dr. McLoughlin, we will take the replies in groups of three. We have a list of other speakers also. I remind members that we have a considerable list of speakers and I ask them to be brief in their remarks.

Dr. Ambrose McLoughlin:

Perhaps I could deal with the issues regarding expenditure and help members' understanding of the issues. At the end of last year the Government published its comprehensive expenditure review from 2012 to 2014. That report indicated that further savings of €1.1 billion in current health expenditure would be required over the period. I want to make it clear that this is in the context of the national recovery plan, which is being signed off by Government, and there are conditions attaching to that recovery plan.

I want to explain the €700 million to €900 million gap. Overall expenditure limits for 2012 to 2014 were set in the context of the CER process. The CER limit for 2013 is lower than the total budget for 2012 which at the moment is overspent by around of €330 million by the end of August and may be higher by the end of the year.

Some 4,900 staff departed in 2012. However, the health service is required to reduce the numbers further by 6,500 within the next two years while maintaining services. Due to the nature of the business-----

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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That is not possible.

Jerry Buttimer (Cork South Central, Fine Gael)
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The Deputy had his chance to contribute.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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I apologise, Chairman.

Jerry Buttimer (Cork South Central, Fine Gael)
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Dr. McLoughlin is not a politician. He is an official. I do not object to the Deputy heckling or badgering me but we must be fair to the officials.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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I will be very fair to the officials.

Dr. Ambrose McLoughlin:

Due to the nature of the business, the health system faces additional unavoidable pressures each year. They have to be funded by way of savings. These unavoidable pressures include demographic pressures, an increasing birth rate, an aging population, increased incidence of disabilities, demand-led schemes such as medical cards and drugs schemes, pay costs, superannuation and increments, acute hospital deficits carried forward from 2012, and full year cost of developments commenced in 2012.

The other measures required to improve efficiency in the system include improving financial systems, the development of shared services, better procurement and more efficient prescribing. These will require a degree of up-front investment in terms of cash and staffing and will also have to be funded from services.

Measures to improve or develop services, including commitments in the programme for Government, are not provided for within the expenditure limits and can only proceed if a commensurate saving is achievable in another area of the health service. Programme for Government commitments include: measures to improve access to hospital services and emergency department and elective waiting times; the development of transition care programmes; the extension of free GP care; investment in primary care, mental health and services for older people; and addressing the cost of the health care reform programme in general - for example, moving towards universal health insurance.

One should bear in mind that there are some very significant issues for the health system to address and that progress can only be made if we increase the efficiency and cost-effectiveness of the health service. In this regard, I would like to put on record some very important developments. The strategies that the Department and HSE are applying are working in a significant way. For example, there has been a 20.6% year-on-year reduction in the number of patients waiting on trolleys, or over 13,000 fewer people, and a reduction from an all-time high of 569 patients on trolleys on 5 January 2011 to 139 on 7 September 2012, representing a 75% reduction. We want to see a continuation of the reduction. Overall surgical waiting lists have decreased in the past year by 7% while every time band has seen a substantial reduction, with the figure for those waiting over 12 months reducing by 85%, that for those waiting for nine months reducing by 63% and that for those waiting over three months reducing by 18%. Therefore, significant progress is being made.

I want to challenge some of the points made by some of the Deputies with a view to offering clarification on the issues and enhancing their understanding. It is not true that we are not delivering on the cost of medicines. We have very intensive discussions under way. These were always going to be complex and difficult. I worked in the pharmaceutical sector for a decade or more and can assure the members that there is no easy solution. The negotiations will be difficult and drawn out, and they will cover the coming three years, but I am very confident they will bring in the revenue suggested in various Government papers.

I assure the committee that we will achieve the €125 million target pertaining to insurance. We are working in partnership with the HSE to deliver in this regard. Work has been ongoing with the HSE for many months, namely, from the beginning of the year, to achieve the best outcome. With regard to insurance and income collection, this matter is simply about the health system claiming what it is entitled to from the insurance system. Wisely, the Department and its Minister decided to enter into negotiations with the insurance companies. My colleague, Mr. Fergal Lynch, will explain in further detail that we have an active task force engaged in recovering the funds.

With regard to the cost of medicines, we are working with the Irish College of General Practitioners, the Royal College of Physicians of Ireland and the clinicians to ensure we achieve the most cost-effective solution. We are anxious to ensure that new medicines, when they become available and are clinically approved, will be available to the patients of Ireland. We are making progress on these issues.

In my Department, absenteeism has reduced from over 4% to 2.8%. In one instance, over the August bank holiday weekend, I discovered an absenteeism rate of 11%. Such levels are not sustainable. With the HSE and my colleague Mr. Tony O'Brien, we have published the details in accordance with the wishes of the Minister. This is so the public can see for itself what hospitals and services are performing to a very high level of cost-effectiveness. The way to see the health system through the next three years is to be cost-effective and really deliver value for patients, both public and private.

With regard to governance, the legal position is very clear. Mr. Tony O'Brien is the accounting officer for the HSE. He is ultimately answerable to the Committee of Public Accounts. I have an oversight role as Secretary General of the Department of Health and work with my colleague in the Department of Public Expenditure and Reform.

Let me make a number of points on service planning. Service planning is not a perfect science. I have been in the health system for many decades and can assure members that there will always be a challenge at service planning time. What we must do is learn. Two independent experts have examined the matter and we now need to improve our financial management and control systems to ensure we obtain value for money.

I assure the members that the Minister and Ministers of State, Deputies Reilly, Shortall and Lynch, respectively, are fully supportive of the initiatives the Department and HSE are working through on their behalf, thus ensuring that we have the most efficient, effective and cost-effective health system possible. It is a matter of ensuring that we have appropriate, relevant and timely information so we can know precisely the position on the health system at a given time.

I want to clarify the matter of reference pricing legislation. I assure the committee that there are clear working plans in place. We are working with industry, the Irish Medicines Board and other parties to ensure that when the Houses pass the reference pricing legislation, we will be in a position to achieve a very significant reduction, not only in the cost of medicines to the State but also, I hope, in the cost of medicines for private patients by way of a spin-off.

Jerry Buttimer (Cork South Central, Fine Gael)
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Does Dr. McLoughlin accept that members and the wider public are frustrated over reducing the cost base? Is action not required sooner rather than later?

Dr. Ambrose McLoughlin:

A Secretary General must always address the etiological factor, or cause of the problem; addressing the symptoms and signs of the problem will not suffice. What the Government has decided to do is a matter for it. What the Department is doing in support of the Government is ensuring that this legislation is brought forward as quickly as possible. Experts such as Professor Michael Barry and others believe we need to ensure we have the most cost-effective options available to both public and private patients. This is very difficult. I am very appreciative of the fact that the pharmaceutical industry is worth €40 billion to the State. There are 25,000 people employed directly in the sector and over 100,000 people employed indirectly. Therefore, we must work through the issues in a sensitive way. It is very important to have a good relationship with those in the industry. Ireland has 33 oncologists, 25 of whom have been trained in the top centres in the world. We must protect the clinical research and clinical trial programmes. We want to work with the Department and sector such that we can protect the best interests of the Irish economy, citizens and patients while maintaining the sentiment of the pharmaceutical industry.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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There were a number of points that were not responded to and my questions were all relevant. I will isolate two points referred to in the strategy and the address.

Jerry Buttimer (Cork South Central, Fine Gael)
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Very briefly.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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What is the current position on the preparation and publication of the framework for smaller hospitals? What is the position on free GP care for all and the legal difficulties regarding the long-term illness patients? On behalf of those who are coeliac, I ask Dr. Ambrose McLoughlin to comment.

Dr. Ambrose McLoughlin:

I am very happy to help the Deputy. The position is that the Department has been working with many interests on the development of the small hospitals framework document. Simultaneously, a group under Professor John Higgins is examining the future configuration of hospital groups. These matters will be addressed by the Ministers and Cabinet sub-committee in due course. I do not have the precise timeframe but expect that the document will be published in due course when the decisions have been made at a political level. Professor John Higgins is working around the country. There has been fairly intensive consultation. Even after the publication of the reports, I am sure there will be continuing dialogue with a view to shaping the very best hospital system possible for the people.

I do not want to get into the issues associated with coeliac disease. I am very sensitive to the fact that there are those who may feel aggrieved at the decision that was made. Gluten-free produce is available in normal supermarket chains now. Gluten-free flour, for example, is a lot less costly than it used to be and is available in the large supermarket chains for between €2 and €3. One can buy products that were not available heretofore. Through the health system, such products would cost €9 or €10. I saw a price of €8.93 charged by a community pharmacy. We are in very difficult economic circumstances and no item of expenditure can be excluded. I do not want to be seen to be avoiding any area. In fact, the value-for-money report on disability identifies a number of areas that will have to be examined carefully to determine whether value for money can be obtained. Unfortunately, we are where we are and must live with the reality of the challenging economic environment.

Moreover, as a Department we must work with the HSE in a collaborative and cohesive manner. I assure the joint committee we work very collaboratively with all in the sector and this will be continued as we roll out the strategy.

I wish to take up the point made by Deputy Healy. The strategy is very important because one must know where one is at a particular time. One must have an idea about where one will be in three years' time and how one is going to get there. Consequently, the three questions are: where is one now, where does one want to go and how is one going to get there? This strategy maps out that process in a systematic way and I am hugely confident we can deliver on this and deliver the programme for Government for the Ministers. In that context, I am happy to inform members there is a strategic framework document, which is to be considered by the Ministers and subsequently will be managed through the Cabinet and the Government. There will be a publication in due course and I expect this will be done in the coming months.

Peter Fitzpatrick (Louth, Fine Gael)
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Work is under way on the completion of the framework for smaller hospitals and the development of hospital groups. I intend to refer to Louth County Hospital.

Jerry Buttimer (Cork South Central, Fine Gael)
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I ask the Deputy to deal with the health strategy document.

Peter Fitzpatrick (Louth, Fine Gael)
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Yes. All acute medicine was transferred to Our Lady of Lourdes Hospital, Drogheda, in July 2010. A minor injury unit was established at the time in Louth County Hospital, Dundalk. The aforementioned unit provides for patients aged 14 and upwards who present with less serious injuries that do not require hospital admission. Day surgeries are in place and since mid-August, an additional scoping room is operational. Moreover, a new endoscopic extension commenced in July and is due to be completed in September 2012. A full general outpatient service is in place in Louth County Hospital, which will be expanded further as part of the general reorganisation of the Louth hospital medical clinics and the national clinical care programme of 2011, including diabetic foot care, heart failure and pulmonary rehabilitation. A broad range of outpatient services is in operation at present, including, to name but a few, orthopaedic gynaecological, medical, surgical, X-rays, CT and ultrasound services.

The Oireachtas Joint Committee on Health and Children has agreed to visit Daisy Hill Hospital, Newry in the coming months. In the future, what will be the position in respect of sharing services with our Northern counterparts and vice versa to place patient safety first? I ask the witnesses to comment on this prospect.

Robert Dowds (Dublin Mid West, Labour)
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I thank Dr. McLoughlin and the other officials for their attendance. I wish Mr. Tony O'Brien well in his new post. I appreciate the efforts and the success in respect of delivering a more effective service for many patients and this undoubtedly is very difficult to do in the face of cutbacks. However, it is gratifying to see it and I hope it can continue. If I may, I will make one or two suggestions that might point towards further savings. More use might be got out of equipment that is handed out through hospitals. For example, when a patient leaves hospital using crutches, the HSE or the hospitals do not appear to be interested in getting them back. I believe there could be considerable savings if such issues were addressed. I have heard of a similar case in respect of special mattresses, which I understand cost approximately €7,000 each, and which then were discarded. Moreover, there are probably other examples of which I am not personally aware. Consequently, I wonder whether there is a strategy in place to get better value for money in respect of equipment.

The answer to a parliamentary question I tabled earlier this week revealed there is a non-payment rate of 25% in respect of the €100 charge at accident and emergency units. The witnesses might comment on this point and how a better outcome might be achieved.

Finally, if Dr. McLoughlin is in a position to so do, I would be interested in a comment on the Ogden report produced earlier this year-----

Jerry Buttimer (Cork South Central, Fine Gael)
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We are dealing with the health strategy document now.

Robert Dowds (Dublin Mid West, Labour)
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-----particularly with regard to its elements pertaining to efficiency.

Regina Doherty (Meath East, Fine Gael)
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I welcome Dr. McLoughlin and wish him the best of luck in all the achievements that, please God, he will achieve over the next number of years. I wish the same to Mr. O'Brien in his role at the HSE. My question specifically pertains to a strategy concerning the framework for a smaller hospitals and the delivery of Professor Higgins's report on regrouping. I understand completely the strategy and appreciate it will be a political decision as to when it is reported upon. All members probably could guess, within particular groupings or areas, the likelihood of what the suggestions will be and they will collaborate with the public. However, given the political and parochial opposition that already is mounting in campaigns nationwide, how do the witnesses plan to manage the roll-out of the much-needed changes? It is a given, based on the national recovery plan and the diminishing budgets available to us, that while services obviously must be delivered in a patient-focused and safe manner, this must be on a regional, as opposed to a parochial basis, to which we have tended to hang on in recent years. Has a strategy been designed to manage that?

Dr. Ambrose McLoughlin:

As for the small hospitals framework, this is a very important document and the work of Professor Higgins is very important. To be clear, in response to the questions from Deputies Fitzpatrick and Regina Doherty in particular, we will have intense consultation with clinicians on the ground and will engage with GPs. I note we have a structured approach to this consultation process. For example, independently of my Department, Professor Higgins is engaged in that dialogue at present. Moreover, there will be further dialogue. Deputy Doherty is correct, in that we must deliver the contents of these two documents in a way that ensures people understand it is about patients. It is about giving patients the best option, that is, the safest care possible. Deputy Fitzpatrick made a point that I would like to get across, which is that these smaller hospitals have a hugely important role to play in the future of our health system, and this will be clear when the documents are published. There is a range of services that currently are not provided in the small hospitals, which create pressures on larger hospitals to provide. Consequently, there is an opportunity for a market niche for small hospitals which, in my opinion, will bring about a pathway to an orderly, structured hospital system at local, regional, super-regional and national level. This is of critical importance.

As for the matters raised about the political and the parochial, while I am probably out of line on this, there will be a need for very strong political leadership across parties in this regard. Part of our strategy will be to engage, perhaps with this joint committee, and with others in the political system at a particular time to explain precisely what is intended in respect of the small hospitals framework and the new hospital groupings in order that the representatives of the people will have a comprehensive understanding of what are the issues. On the matters raised by Deputy Dowds with regard to the Health Service Executive, I will ask the director general-designate and chief executive officer to deal with that.

Mr. Tony O'Brien:

I also wish to acknowledge the best wishes of members of the joint committee and to thank them for them. On the issue of reuse and recycling, there has been a change of policy and the HSE now actively seeks to promote reuse and recycling of the type of products mentioned by the Deputy. I note partnerships are being developed with voluntary bodies to assist us with that. The era of the disposable crutch-----

Robert Dowds (Dublin Mid West, Labour)
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Is this under way at present?

Mr. Tony O'Brien:

Yes, it has just commenced. The era of "Please do not bring back your crutch" is over.

Robert Dowds (Dublin Mid West, Labour)
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I tried to bring back a pair but they were refused.

Mr. Tony O'Brien:

That was the case in the past.

If I could take the opportunity to respond to a question from Deputy Ó Caoláin and to repeat an absolute assurance I have already given public, the mooted reduction in the availability of personal assistant services will not proceed. Anyone who has personal assistant services should rest assured in that respect.

Dr. Ambrose McLoughlin:

I refer to the Ogden report. While this is a matter for the Minister and for the Ministers of State, I am confident the Ogden report will be published in due course, as will other reports on the matter. It is critical to understand that this is in the context of the Department improving the financial management of the health system and improving the overall capability and capacity of the system to have, if one likes, the proper navigational equipment on board to enable us to know what is the budgetary position at a particular time and to be in a position, in line with the point made by Deputy Kelleher, to ensure the maximum level of alignment between service planning and finance in the future.

This is a complex area. There are legacy issues. We are dealing with management systems issues and I am pleased to say Mr. O'Brien and I are working on them at present. We have a plan in place at the Department of Health which Ms Nic Aongusa, assistant secretary, is leading. We are working very closely with the HSE to ensure we put in place a strong financial management and control system. I am sure the Minister, Deputy James Reilly, and the Ministers of State will present members with the relevant reports in due course.

Denis Naughten (Roscommon-South Leitrim, Independent)
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I thank Dr. McLoughlin and his team and Mr. Tony O'Brien for coming before the joint committee. I welcome the strategy statement. It is now 18 months since the strategy statement issued and we are halfway through its timeframe. It is still very aspirational. The key point Dr. McLoughlin made is that none of the targets can be achieved unless we get delivery on value for money within the health service. That is the core objective. It was interesting that Dr. McLoughlin made the point the objectives that are set out in the programme for Government can only be achieved if we get savings over and above the cuts in the current and projected demands on the health service, as well as addressing the current overspends in the health sector.

It is an astronomical task to take in excess of €2 billion out of current spending in the health budget before we can consider the expansion and development of new services. That is a lot to ask in a very short period.

Every year 60,000 people in Ireland attempt suicide. That places a significant burden on our health service. What is the logic of withdrawing the funding for training provided to the suicide prevention programmes at a time when suicide is a plague? There is no joined-up thinking between what is in the strategy and what is happening on the ground.
My second question relates to our efforts to try to keep people out of hospital. We know what is crucial to that strategy is supporting people in the community through home help funding. However, home help organisers have been directed to take 16 hours of allocated home help out of the system every single minute between now and the end of the year to achieve the target of removing more than 635,000 home help hours from the system. That will not deliver value for money. That will not achieve the targets required to deliver the strategy statement, not to mention the targets set in the programme for Government.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I welcome the delegates from the Department of Health and the HSE. They have a tough job. I worked for the HSE. I compliment and commend the staff who are working under such very difficult conditions.

HIQA monitors some patient services. Is there a budgetary line below which the health care system cannot continue without damaging the public health care system in the country? Has this line been identified and has the Government been advised of it? Can somebody describe what model of universal health care is being designed for public health care in the country? Are elements of the service being considered for an increased role by the private for-profit health and social care providers? Is there a measurement of the expensive consultant surgical time being under-utilised?

Jerry Buttimer (Cork South Central, Fine Gael)
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Deputy, we are dealing with the health strategy.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Yes, Chairman, but strategies must be based on what is happening at present. There is a shortage of theatre staff. What measures are being taken to address it? I find it difficult to rely on the demand and service supply statistics being quoted. My experience on the ground would differ from those quoted. Has there been an administrative change in definitions for waiting lists, service activities and throughput activity? It seems there is an unchallenged ministerial and departmental view that primary care will cost considerably less than hospital-based services. I contend this is not necessarily so and I would like to hear the views of the witness.

What is the role of the so-called smaller hospitals? If one looks at a map of Ireland, public services in the west and north west are markedly less than in other areas of the country. Will the concept of the golden hour continue to apply in relation to Sligo regional hospital and Letterkenny hospital? What happens to the strategy if and when the financial projections fail to materialise? Why do we still have patients travelling from the west and the north west to attend specialist consultants in Dublin when there is an IT infrastructure, where a consultant could talk to a consultant with the patient and look at the scans. Why are we not exploiting the existing technology and saving the patients from travelling from the far ends of the country to Dublin?

Ciara Conway (Waterford, Labour)
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I welcome our guests and wish them well in their new roles. We have heard a great deal about the drive for efficiencies in the Department and in the hospital networks. In the past if those in the public sector did not spend their allocation they did not get it again. How will efficiency be rewarded within hospital networks? I also worked in the HSE and I remember coming up to November or December making decisions to buy a flat screen television for the out patient waiting room because if we did not spend the money it would be taken from the budget for the following year. Some hospitals have been implementing the efficiencies and are doing what they have been asked. Will they be punished next time around or how will their efficiency be rewarded? If our strategy is to be successful, I believe it must be rewarded. Will our speakers say how they will do that?

I wish to raise the collection of the moneys due from insurance companies. Who is not doing their job? Are the insurance companies not paying the Department? Is somebody in the HSE not filling out the form and asking for the money? I have information from my own family experience. My grandfather, who is lucky enough to have private health insurance, spent a long period of time in a public hospital and then had a very serious operation in a private hospital. On the day he was discharged from the private hospital, he was presented with a bill. He is still waiting for his bill from the public hospital. That is just not good enough. He has paid for health insurance all his life and he knows the insurance money is there and he wants the money to be returned to the State. Somebody is not doing their job. If they are not doing it why are they not doing it? What will be done about it?

Jerry Buttimer (Cork South Central, Fine Gael)
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Deputy Kelleher indicated.

Billy Kelleher (Cork North Central, Fianna Fail)
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May I refer briefly to a point I raised earlier? I did get a reply, but I am prompted by an idea that crossed my mind. I accept that acute hospitals are a stand-alone service. With regard to the small hospitals framework and the grouping of primary care and urgent care centres into hospital groups, is there a co-ordinated strategy between them all? Is there an integrated strategy? Who is organising it to ensure it happens and is delivered?

Dr. Ambrose McLoughlin:

Deputy Kelleher has made a very good point. One of the reasons we have been delayed in presenting the small hospitals framework is the very issue he has outlined. We want to ensure that the small hospitals framework is aligned with the acute hospital groupings.

We want to make sure we have an alignment with primary care so that we have a joined-up system. Deputy Kelleher referred to integrated interdisciplinary care. Clinical reform programmes are working in a number of areas, such as diabetes. The programme, led by Dr. Barry White, is important in ensuring the patient journey, particularly for those with chronic illness, is managed properly and the patients are looked after at the lowest level of complexity. Deputy Kelleher is correct that this will be part of the approach we are taking.

Billy Kelleher (Cork North Central, Fianna Fail)
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Is an individual or a system responsible for this?

Dr. Ambrose McLoughlin:

My Department is working on the integrated approach with Dr. Barry White and the Health Service Executive, HSE. We have had several expert committees working on these issues and they will report in due course.

Mr. Tony O'Brien:

With regard to Deputy Conway's question on income collection, there is a significant problem with delayed signing of forms following the completion of treatment by some consultants in some hospitals. Unfortunately, that adds up to a significant sum of aged debtors, a figure approaching €60 million. This is one of the reasons the talks concluded over the weekend with the Irish Hospital Consultants Association included a specific focus on agreement around the obligation consultants have to sign those forms within a defined period of the conclusion of treatment. It is positive that this was part of the agreement.

In addition to that, we are working directly with those consultants and with the assistance of the Irish Hospital Consultants Association to motivate them to publish in an open and transparent way the list of those specialists who persist in failing to sign these forms. The reality is if we had that €60 million in cash, the backdrop for the health service would be quite different. It is simply not acceptable. In due course, we will move into the disciplinary phase if we need to do so. However, I hope we do not need to do so. The Deputy is correct to highlight the issue.

I am not aware we have cut any funding from suicide prevention. However, I am happy to speak to the Deputy afterwards about this.

Regarding home help hours, we are outside of the normal roll-over of home-care packages and home help hours. We are not going through a process of taking home help hours away from anyone. As I said at the time that the various measures were announced, nothing will proceed in advance of passing a risk assessment test. Those tests are still under way. We are ensuring the type of adverse consequences about which the Deputy is concerned will not arise.

Jerry Buttimer (Cork South Central, Fine Gael)
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It is important the language we all use does not instil fear or cause undue angst to people dependent on services. That behoves all of us, including media commentators, politicians and officials.

Mr. Tony O'Brien:

Absolutely.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Chairman, what is being described here is not happening on the ground.

Jerry Buttimer (Cork South Central, Fine Gael)
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No, the Deputy has spoken already. I want Mr. O'Brien to conclude.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Sorry; Chairman, but we need to nail this.

Jerry Buttimer (Cork South Central, Fine Gael)
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Sorry, the Deputy has had his time.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I am wasting my time here.

Mr. Tony O'Brien:

On the efficient use of theatres and surgical time, a number of hospitals are participating in the productive operating theatre programme,Tpot. It is addressing the organisation of theatre utilisation and all the services that support to make use best use of resources. This programme has proved very effective in several hospitals and has been progressively rolled out across the hospital system.

Ms Bairbre Nic Aongusa:

Deputy Conway raised the issue of how we could reward efficiency in the system. This was one of the issues highlighted by the Ogden review of financial management systems in the HSE, commissioned by the Secretary General in June. It identified a wide range of areas for improvement in the systems, processes and structures around the financial management system. One issue it picked up on was the fact there is no reward for a manager to remain within budget and no incentive to achieve savings. Neither are there penalties for people who overspend. The Deputy is correct that there may have been a culture of no incentive to make savings. On foot of the Ogden report, measures will be put in place to address its recommendations.

The Ogden report identified a need to improve the capacity and capability of the financial system in the HSE. For example, the proportion of qualified accountants working in finance in the HSE is only 10% whereas in the UK the norm is 25%. The Secretary General earlier referred to the need to invest to improve efficiency in the system. The Ogden report identifies a need for investing not just in improved ICT financial systems but also in human resources and capacity, along with better procedures to ensure better oversight and control of expenditure. There is a need for us to focus on the financial management systems in the HSE. To do that, we will have to achieve savings elsewhere in the system. The Ogden report, we hope, will be published shortly.

Deputy Colreavy asked whether there is a limit below which the health service cannot be funded. The extent to which we can deliver on the health reform programme and on providing an efficient, effective and high quality service is dependent on the degree to which we can extract efficiencies and costs savings from the existing system, as well as addressing existing inefficiencies and improve the processes, procedures and the models of delivery of care. In a great many areas, a different model of providing care would provide a more efficient service as well as improving quality of care for patients.

Dr. Ambrose McLoughlin:

I am a little concerned members might think the strategy is irrelevant. The strategy is working on the ground, however. For example, the restriction on GPs wishing to become contractors under the general medical services, GMS, has been abolished. A programme for the development of 20 primary care centres using public private partnerships, PPPs, has been established. The development of chronic disease management programmes is in train, particularly for the management of diabetes, which is at an advanced stage. There is obviously concern for stroke victims and we now have a programme which will deliver better outcomes and quality of life for them. When fully implemented, one life per week will be saved and disability will be avoided for three people per week. We have made progress with cystic fibrosis. We are developing new models of care and new ways of delivering care for patients in difficult economic circumstances. The restructuring of the hospitals in Galway and Limerick are significant pilot projects as we shape a more cost-effective health system. We are working with all of the professions to achieve more cost-effective prescribing and dispensing. We are asking all the excellent staff working in the HSE to come on this journey with the Department of Health so that we can achieve value for patients along with quality of care.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank the officials for attending the meeting. I wish Mr. Tony O'Brien well in his new role.

Denis Naughten (Roscommon-South Leitrim, Independent)
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He will need it all.

Jerry Buttimer (Cork South Central, Fine Gael)
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It is important that we put on the record, as Deputy Colreavy said, that there are people in the health system who are doing extraordinary work and have changed their work practices to deliver better health care. We are proud of them.