Jerry Buttimer (Cork South Central, Fine Gael)
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Our discussion is the 2013 allocation of expenditure in respect of Vote 38 - Department of Health, and Vote 39 - Health Service Executive.
I ask members and those in the Public Gallery to ensure that mobile phones are switched off. I welcome the Minister and his officials to the meeting.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give this committee. If a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and witnesses are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

The purpose of this meeting is to establish how the Minister for Health proposes to allocate the moneys available to him in 2013 to provide services, while remaining within the 2013 ceiling and to offer members an opportunity to engage with him on how this might be achieved. The committee met in private session during which committee members expressed their disappointment at the lack of information provided by the Minister in advance of the meeting.

James Reilly (Dublin North, Fine Gael)
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I thank the sub-committee for the opportunity to discuss the situation. I look forward to responding to questions from members and to a discussion on the many challenges facing the health service in 2013.

While I acknowledge that the sub-committee's agenda today is to discuss the 2013 allocations, it is not possible for me to provide any degree of detail on the budgets for the Department of Health and the HSE. Those budgets will be presented next week on the publication of the Estimates. I have just left a Cabinet meeting at which budgetary matters were being discussed and I will be partaking in another such meeting at noon. I will, however, be as open as possible in the circumstances. In particular, I wish to clearly outline the context relating to the challenges for 2013 in order that everybody will be aware of the difficulties we face and what will be our priorities in terms of how we spend money and obtain best value for it on behalf of our citizens.

I will begin by making a number of general observations with regard to the overall challenge to be faced in the area of health. As members are fully aware, the Government is committed to tackling Ireland's very serious deficit problem in accordance with the broad fiscal framework of the EU-IMF memorandum of understanding. Health expenditure accounts for 26% of gross current expenditure. This represents 39% of total tax receipts and 92% of income tax receipts in the current years. The health service budget has had to be reduced by €2.5 billion during the past three years. The number of health service staff has fallen from a peak of 111,000 in 2007 to fewer than 103,000 now. The sector faced significant financial challenges in 2012 and, as members will be aware, it has been necessary to apply for supplementary funding.

The budget targets set for the HSE this year were extremely demanding and subsequently were not achieved. The impact of the retirements that occurred during the grace period posed significant challenges, particularly as some 4,700 people left the sector before the end of February. While one would imagine that this would lead to savings in terms of pay, that is not always the case. Many of those to whom I refer had taken extended leave of some form or a leave of absence and then decided they would leave permanently. Their lump sums had to be paid and there was no immediate gain in the context of our not being obliged to pay wages.

In view of the scale of the challenge the health system will face in 2013 and subsequent years - and as an aid to its preparations for the 2013 Estimates - the Department of Health invited the European Observatory on Health Systems and Policies to prepare a report on the implications for the Irish health system of our current financial pressures. The observatory is an international partnership hosted by the World Health Organization and its report was compiled by a team of international and Irish researchers. The report was published last week and is available on my Department's website. It indicates that while there is scope for further efficiencies in the health system here, savings cannot be achieved within the externally imposed timeframe without visibly damaging patient care. This is unless we address pay and the price of inputs. As stated previously, we are faced with the prospect of either cutting services or the cost of those services. I am determined that the latter will be the case.

Even with substantial efficiencies it is unlikely that the health policy objectives of the programme for Government can be met without an increase in statutory resources, particularly in view of the commitment to expand entitlement to GP services. International evidence shows that efficiencies of 2% to 3% per annum are generally achievable with little disruption to services but that attempts to achieve more rapid efficiencies tend to affect service delivery, usually in a way that is disproportionate to the savings achieved. Targets for reducing health spending should take account of the growth in demand for services driven by demographic change and the sharp increase in medical card coverage. The latter is, of course, a result of the economic difficulties we face. International studies also indicate that it is difficult to achieve lower costs and greater efficiency when structures are subject to radical change. In fact, efficiency tends to decline and it takes approximately three to five years to recover fully.

These findings are very significant in the context of our considerations today because they clearly indicate that while the health service can and will deliver further efficiencies, there is a level beyond which further expenditure reductions can cause real harm. There is no doubt, therefore, that the challenge we will face in the context of resources and timescales in 2013 will be considerable. At the same time we must respond to the unavoidable pressures that will be placed on the system and, in particular, the challenges posed by our demographic growth.

There are three points which illustrate the scale of the challenge we face on the demographic front. First, during the past decade the overall population of Ireland has grown at a much faster rate than that of any other EU country. It is projected to continue to grow, albeit at a reduced rate. Second, the ageing of the population is now occurring at a rapid and accelerating rate. Between the censuses of 2006 and 2011, the number of people over the age of 65 rose by 14%. This will increase to 18% between 2012 and 2017. The highest percentage increases will be in the oldest age group, namely, 85 years and over, where the figure will rise by 21% between 2012 and 2017.

Jerry Buttimer (Cork South Central, Fine Gael)
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The Minister's five minutes have expired. Is it agreed that he be allowed to finish reading his script?

James Reilly (Dublin North, Fine Gael)
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I am almost finished.

Jerry Buttimer (Cork South Central, Fine Gael)
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Agreed.

James Reilly (Dublin North, Fine Gael)
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I would like to conclude because it is important to put these matters in perspective.

Between now and 2017, the proportion of the population aged 65 and over will increase by approximately 20,000 per year. This is good because it reflects improving longevity and better quality of life. We must fully celebrate that fact but also take cognisance of the implications it has in the context of service provision. The third point is that at the other end of the lifecycle, fertility rates in Ireland remain the highest in the EU. Equally, this is also great.

A study carried out by my Department on the projected effects of these demographic pressures on the health services indicates that annual cost pressures of approximately 1% will be encountered in the health services as a result of the pure demographic effect of population growth. In particular, population ageing drives the overall cost pressures. For the proportion of the population over the age of 65, annual cost pressures of approximately 3.5% are projected and this has clear implications for service provision. In addition to these demographic pressures, the health service faces further unavoidable pressures due to the economic situation, which has resulted in increased numbers on medical cards. There are now in excess of 1.8 million people with medical cards. This number is projected to grow further in 2013, adding to the pressure on the drugs budget of the HSE.

Given that expenditure on pharmaceuticals is approximately €2 billion per annum, any arrangements which will mitigate this expenditure are to be welcomed. Significant progress has been made in recent years to improve value for money through changes in wholesale and retail mark-ups and reductions in payments to community pharmacy contractors. In addition, in October I announced a new agreement with the Irish Pharmaceutical Healthcare Association, IPHA. This new agreement will have a value in excess of €400 million during the next three years and will mean significant reductions in the cost of drugs for patients; a reduction in the drugs bill to the State; greater access to new cutting-edge drugs for certain conditions; and an easing of financial pressure on the health service in the future. As well as the agreement with the IPHA, the Department of Health and the HSE have completed discussions with the Association of Pharmaceutical Manufacturers of Ireland, APMI. The latter represents the generic drug industry and the agreement represents a significant structural change in generic drug pricing and should lead to an increase in the prescription of generic drugs. Savings in 2013 will be in the region of €15 million and this figure will rise in subsequent years as more drugs come off patent.

Another serious challenge for 2013 is that we will be obliged to derive further savings through reducing the numbers employed, even though a significant reduction has already been achieved within the health sector. Since its inception in 2010, the public sector agreement - better known as the Croke Park agreement - has helped the health sector to manage the reduction of staff numbers by over 6,000. Another significant success of the Croke Park agreement in the health sector has been the redeployment to date of some 3,500 staff within the services. Other achievements include an extended working day in hospital laboratory and radiography services, the ongoing revision of rosters at local level and co-operation with clinical care changes in hospitals

A major achievement for the health sector in the context of the existing Croke Park agreement was the recent conclusion of the agreement between hospital consultants and health service management at the Labour Relations Commission. The breakthrough, reached initially after intensive talks last September, allows for a series of major changes to the benefit of patients in particular. The negotiations to which I refer provided for agreement on 24-7 rostering. Consultants will be available for rostering for any five days out of seven, as opposed to weekdays as is currently the case. The agreement also gives greater strength to the system of clinical leadership in hospitals throughout the country. The move will allow for greater effectiveness in the organisation of day-to-day work in hospitals and a greater capacity for efficient forward planning.

In simple terms, with these changes, we will be able to treat more patients more quickly. The new powers conferred on the clinical director are a real improvement and will have a major impact in this regard.

The agreement also puts on a formal basis a range of productivity flexibilities which allows for considerable advancements in the use of hospital beds. Notwithstanding the significant progress made to date under the Croke Park agreement, it is clear that further change is required and at a faster pace if we are to be able to reduce the impact on services. In this context, I welcome the Government's recent decision to initiate discussions with the public sector unions on an extension of the Croke Park agreement. In the interests of safeguarding public services to the maximum extent in the face of the continuing very serious fiscal situation, I am fully supportive of this process which will be led by the Department of Public Expenditure and Reform at central level and is aimed at achieving substantial savings in the 2013-15 period. My Department and the HSE will engage positively with the process with a view to putting forward measures that can achieve the savings required and are fully thought through in terms of what they are intended to achieve and how they will be implemented.

The Government is fully committed not just to more efficient ways of delivering services but to a fundamental reform of the Irish health service. This was never going to be an easy task. We are implementing many reforms and introducing initiatives to improve the quality of service at a time of serious economic challenge. The current health system is deeply flawed, it is unfair to patients, often fails to meet their needs fast enough and fails to give value for money. We have committed to a complete rewriting of the current system in a very ambitious but necessary programme of change. Reforms are all the more important in the face of the economic crisis with extremely challenging savings to be achieved in the months and years ahead but they are needed because the current system is simply not sustainable. I am on record as having said that even if we did not have an economic difficulty to deal with we could not have maintained the service in its current form.

On 15 November last, together with my colleagues, the Minister of State, Deputy Kathleen Lynch, and the Minister of State, Deputy Alex White, I launched Future Health - A Strategic Framework for Reform of the Health Service 2012-2015. The major reforms in Future Health are aimed at improving fairness by removing the distinction between public and private patients, driving down costs in order that we can live within difficult budget limits, ensuring high quality services and developing a health service of which we can all be proud and in which patients can feel safe. A new focus on health and wellbeing, moving away from simply treating ill people to a new concentration on keeping people healthy, is core to this framework. Also core to it is reforming our services to ensure we deliver care at the lowest level of complexity. We need to enhance primary care and refocus hospital and social care. Also core to the framework are reforming our structures in order that we deliver services effectively and efficiently, and reforming our financial system in order that we can enhance financial control and create the incentive to deliver cost-effective care. I mentioned in the past two reports, the Ogden report and the PA Consulting Group report, which both highlight the difficulties within our system, the lack of clarity around finance and the recommendations we are implementing.

Notwithstanding the difficult financial environment, very substantial progress has been made on the health reform agenda in recent months, including a reduction of 24.3% in the number of patients waiting on trolleys between January and November of this year compared to the same period last year - this equates to 19,135 fewer patients waiting on trolleys. There are still too many and we have a long way to go. In addition, the number of adults having to wait more than nine months for inpatient and day case surgery was down 91% at the end of September.

The reforms are working, the progress to date underlines this and underlines the Government's commitment to health service reform and the implementation on universal health insurance. With the involvement and support of all the main stakeholders in the health system, I know we can deliver on our objectives in the best interests of patients. I have travelled around the country and have had 14 or so meetings with staff and with health fora. I believe everybody wants to see the system change and that there is support for this. I know different people have different views on how it can be achieved and I welcome their input and advice. The extent of the financial crisis facing Ireland and the challenges which this poses for the health system in particular at a time of growing demand means the Government must press ahead with major health sector reform.

Our health services are essential to the functioning of our society. Our citizens expect and demand a modern, high-quality, safe single-tier health service which guarantees access to care based on need, not on ability to pay. We need to build a health service that is continually evolving and improving, and delivering services more efficiently and more effectively with fewer staff. It is the intention of the Government to provide such a health service for current and future generations. The 2013 allocation for the health services, although very challenging to deliver, will be an important mechanism in enabling the Government's reform agenda for the health services to proceed. I thank the members for their attention. I am happy to respond to any questions members of the committee may have but before doing so, as there is no name plates before my colleagues, I will introduce my colleagues on my right, Ms Bairbre Nic Aongusafrom the Department of Health, Mr. Liam Woods from the HSE and Mr. David Smith.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank the Minister. I call Deputy Kelleher who has two minutes.

Billy Kelleher (Cork North Central, Fianna Fail)
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I will reserve criticism regarding the documentation for another time. I am not saying it is the Minister's fault but this committee should have had at least some documentation in advance to prepare for this discussion on the Estimates for 2013. I am disappointed about that.

The European Observatory on Health Systems and Policies report is quite extensive and it makes for interesting and, at times, depressing reading in view of the challenges with which the Minister, the Department and the HSE will be faced in dealing with demographic changes, population increases and the profiling of our population and the difficulties and challenges that will raise. On the issue of primary care and free GP care, the authors of that report warn that the efficiencies gained from planned and additional reforms will not be sufficient to fund the Minister's ambitious plans to provide universal access to primary care and strengthen services. The reports states that these commitments will require additional revenue. It also states that although there is scope to make substantial additional savings through greater efficiencies, these cannot be made within the required timeframe without damaging patient care unless high salaries and the high price of other inputs are seriously addressed.

In terms of the Minister's commitment to provide free GP care and moving to provide it in 2013 to those on the long-term illness scheme, the fact that the report also states that we have the highest GP costs in the OECD, and given that the Government has not entered into discussions on the contractual changes that will be required to move to a system of free GP care for everybody, how far down the road has the Minister gone or does he envisage he will get involved in discussions with GPs on this? If we move to the provision of universal primary free GP care and if GPs charge people €55 a visit, my concern is that the Minister will bring in a very expensive system into universality. I am concerned that would involve a great deal of pressure for people.

We saw the difficulties that arose regarding the policy on the medical card for those over 70 when the Minister was on the other side of the fence with the IMO. Effectively, the then Government announced a policy decision and it then had to negotiate with the doctors who are solely contracted and they had quite a strong argument to make in terms of what they charge for provision or those over 70. If we have the dearest GPs in the OECD, I am concerned that this expensive system, which is currently paid for by people when they visit the GP, will be brought into universality. What has the Minister put in place to address that issue? We all accept that if we get universality in terms of access at primary care level that would be a good development but my major concern is the expense given that nothing is being done currently or was done previously to drive down the cost of GP visits, the cost of which is €55 a visit - the average cost being €51 according to the report. The average cost of such a visit in France is €22. Clearly, the cost here is a major difficulty.

The report deals with the Minister bringing in his reform proposals, the cost of the provision of care and points to salaries, particularly consultants' salaries. It acknowledges there is a reduction in this respect of 30% in the case of new entrants but that no other advances had been made in that area. Those are two points. We have only three minutes to speak on this.

Jerry Buttimer (Cork South Central, Fine Gael)
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I will allow the Deputy a few more minutes.

Billy Kelleher (Cork North Central, Fianna Fail)
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It is difficult to go through all this in three minutes particularly given that we did not have any documentation in advance of this discussion.

When will the Supplementary Estimate for 2012 come before the committee or the Dáil?

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I always welcome an opportunity to address the Minister on these matters, which I acknowledge are of mutual concern. However, he must accept that these are bizarre circumstances for us to meet and address these matters. We are meeting within a week of budget day against a backdrop of unprecedented cuts in recent years. I refer in particular to the removal of €1 billion in 2011, €750 million in the current year and cuts of a further €130 million announced at the end of August. The impact of all of that is the backdrop to today's meeting, but it is compounded by the recent announcement of a Supplementary Estimate for the remainder of the current year on which we have yet to hear the detail. That is a major deficiency in terms of the address of all the difficulties that present.

I welcome the Minister's statement in his address this morning that the current health system is deeply flawed. He said it is unfair to patients and often fails to meet their needs fast enough and fails to give value for money. In arguing consistently against many of the cuts that have been imposed, it is not for a moment to suggest that there are not greater efficiencies and better value for money measures that could be employed.

In his opening paragraph the Minister stated, "in order that everyone is aware of the difficulties we face". He will appreciate that in our role as Opposition voices, but more particularly as Dáil Deputies the greater part of our engagement is with people directly on the ground, whereas for the Minister the equilibrium changes due to the other issues and demands on his time. It is a two-way street. I heard all that has been said but we must also share with the Minister the reality of the impact of the cuts that have been imposed and the fact that on the penultimate occasion when he appeared before us in committee he signalled some €900 million in further cuts in the health budget in 2013. That was the figure he confirmed.

There are areas that must be revisited. I make no apology for highlighting the serious impact of the further cuts imposed on home help hours and home care packages. That is the smallest part of the €130 million cuts announced by the Minister at the end of August. I earnestly appeal to him on the issue. I have ample evidence from replies received to parliamentary questions. I know the Minister does not draft the replies. He probably rarely, if ever, sees the questions we pose but I will cite a couple of examples from my constituency. The home help hours of a 94-year old man have been halved from eleven hours a week to five hours. Yesterday, I received a reply to a parliamentary question about a 99-year old man in County Mayo whose three hours a week were reduced to two hours, and without any assessment of needs. The information was communicated by telephone. My County Cork colleague, Deputy Sandra McLellan, told me of a woman aged 82 who lives alone. She suffered clots on her lung earlier this year and requires oxygen on a 24-hour basis, takes medication for her breathing twice a day and is also on warfarin. She had one hour of home help four mornings per week and a half hour in the evening and also two night visits per week to help with oxygen. Her morning home help visits are being cut by 15 minutes per day and the night time visits have been cut altogether.

I instanced the situation because I re-emphasise again the importance of it. The Minister made the point, "in order that everyone is aware of the difficulties we face". We are aware and we acknowledge them. These are not happy times but as I have said, it is a two-way street. We must also to inform the Minister. It is part of our function and responsibility to communicate the direct consequences of the decisions that are taken and how they impact on the lives of the people that we all represent. We endeavour to do our best in that regard.

This morning the Irish Nurses and Midwives Organisation, INMO, will launch the report of its recent survey of comparisons on staffing within the acute hospital system with what applies in the neighbouring island. The results are alarming. The report indicates a significantly lower staffing level for surgical, medical, accident and emergency services and elderly care. The consequences of all of that, as outlined in the report, is that lower nurse staffing is associated with higher mortality, other adverse events and poor care, less effective and efficient care and higher fatigue and burn-out among the professionals providing those services within the hospital network. We all know that is the case. We meet those nurses, midwives and the other front-line care professionals on a weekly basis. The Minister must be mindful of all of that. I strongly urge that he ensures that every effort is employed to resist any further cuts across the health services.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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Today's discussion is informed by a number of factors, including recent visits to the committee by the Minister. It is clear from what he told us then and again today that we are facing a Supplementary Estimate, the extent of which is not clear, but we know it is significant. We also know from his visit on the previous occasion that we are facing further cutbacks of €900 million in 2013, with a reduction of approximately 6,400 staff in 2013 and 2014.

Community and home care services are in serious difficulty, in particular home help and disability services. Last evening I was contacted by two elderly gentlemen. One is 94 years of age. He had five hours of home help - one hour per day, five days per week - but that has been reduced to two hours per week. An 82-year old gentleman who recently had a serious fall also had five hours a week of home help but that has been reduced to one and a half hours per week. The effect of such reductions in community and home-based services will be further pressure on hospital services, which will cost more for the HSE and the health system to provide.

We were also informed by two further reports, the first of which was referred to by Deputy Ó Caoláin, namely the INMO report. It clearly shows that there are serious deficiencies in the staffing of general hospitals in this country compared to Britain. The cutbacks, reductions in services and the lack of staffing are having serious consequences for patient care in hospitals. The Minister referred to the other report, the European Observatory on Health Systems and Policies in his statement. It indicates that we have already done serious damage to the health service and that if we continue on the path set out, irreparable damage will be done to it.

When we refer to irreparable damage to the service we are talking about patients. Elderly persons will not receive a quality of service, and there will be irreparable damage done to the system as well as the individual patients.

It is clear from his report this morning that the Minister is committed to further reductions, cutbacks and job losses, but I put it to him that it is his duty to examine an alternative. There is an alternative. The Minister has choices. There is significant wealth and assets in this country.

Jerry Buttimer (Cork South Central, Fine Gael)
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We are dealing with a health issue.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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This is about the funding of the health services. There are significant assets and income in this country which are not taxed and it is clear from official reports, including one from the Central Statistics Office, that very wealthy people here have increased their wealth and their assets during the course of this recession. They are not paying their fair share of taxation. They are not paying a wealth tax. I put it to the Minister that he should at least recommend to his Cabinet colleagues the introduction of a wealth tax to ensure we can properly fund our health services.

Jerry Buttimer (Cork South Central, Fine Gael)
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As they have indicated, I will call Deputies Dowds, Conway, Fitzpatrick and Mitchell O'Connor in that order.

Billy Kelleher (Cork North Central, Fianna Fail)
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Is the Chairman taking questions from Deputies before calling the Minister?

Jerry Buttimer (Cork South Central, Fine Gael)
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Yes.

Robert Dowds (Dublin Mid West, Labour)
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I welcome the Minister and the members of his panel. I acknowledge the extremely difficult job he has done and that he has made real progress in some areas, for example, hospital waiting lists, which is welcome, particularly in the extremely difficult circumstances in which we are operating. However, I want to ask questions of the Minister on a number of areas.

On the question of savings, how far are we in regard to savings on drugs, for example? In terms of the Supplementary Estimate, will that help us deal with the issue of inadequate home help hours for some people?

I appreciate it is difficult for the Minister to discuss next year's budget because it is not finalised but is he satisfied that the figures he will have to present will stand up and that we will not have over-runs in the coming year?

I wish to ask specifically about agency nursing. I welcome the Minister's commitment to protect nurses' pay but would it be better to take on permanent nursing staff rather than agency staff given that the agency staff must be paid the same rate as a permanent nurse? The new nurses will not be as expensive because their pensions will be based on a career average rather than what they were earning at the end of their career.

Also, will the Minister comment on reorganising the Health Service Executive and outline the position on primary care?

Ciara Conway (Waterford, Labour)
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I welcome the Minister and his officials. I thank him for taking the time to address the committee this morning.

The Minister mentioned that pay racks up the health bill. That is to be expected as it is a labour intensive service and I welcome that the Minister intends to protect that but he stated also that the price of inputs must be reduced. We published a document, Future Health: A Strategic Framework for the Reform of the Health Service 2012-2015. Have we provided for the way that will appear in the Estimates in terms of how services will be removed from acute hospital sectors? We know they become less expensive when they can be delivered in the community. We know also that when patients can be treated closer to their home it is more efficient but also has better health outcomes for people. How do we intend to do that because while the document is welcome, I am not sure how the Estimates will reflect the reality of that strategic document?

My second question is on the Ogden report. I welcome the Minister's statement that the Department is starting to implement some of the reforms outlined in that report because that is integral. An issue I raised previously is that the lack of an accounting system in the Health Service Executive, HSE, that differentiates between different budgets is part of the problem we are facing in terms of the overrun. We know that acute hospitals suck up services from other places yet we see that savings are being examined at the ninth hour in community services. That has been mentioned by a number of speakers.

I am sure other Deputies around the table could instance this also but regarding financial controls and accounting, local area health managers have told me they could have found the savings if they had been given adequate time but they were not given adequate time and, therefore, they had to make snap decisions, and we know that hard cases make bad law. That is evidenced in respect of the home help service in particular in which savings were sought very late in the day. People have given testimony about that. My grandmother who is 93 years of age and lives alone has lost one and a half home help hours. We know first hand what is happening in that area. We are to have a strategic approach to health and we cannot expect local area health managers to make cuts before the end of the year.

Peter Fitzpatrick (Louth, Fine Gael)
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I appreciate that the health service budget has been reduced by €2.5 billion in the past three years and that the number of health service staff has fallen by 8,000 since 2007. A day has not passed that I have not received a call for a nursing home place.

I thank the Minister for securing the future of the Cottage Hospital in Drogheda and for the investment of over €2 million for works to be done in St. Oliver's nursing home in Dundalk and that it will be up to the Health Information and Quality Authority, HIQA, standard in 2015.

In terms of what remains in Louth, St. Joseph's Hospital in Ardee currently has 20 beds. I understand options will be put to by the HSE to St. Joseph's Hospital in the coming days about its future.

As the Minister stated, between the censuses of 2006 and 2011 the number of those aged over 65 increased by 14%. That figure will increase by 18% between 2012 and 2017. The population aged over 65 will increase by approximately 20,000 per year.

The fair deal scheme has been a great success. What investment will be made to allow nursing homes reach the HIQA standard by 2015? Also, in terms of the difference between public and private nursing homes, I am aware that the cost of a private nursing home is approximately €950 per week compared to the cost in a public nursing home which is approximately €1,800 per week. Many people are seeking places in nursing homes. What is the possibility of getting all these nursing homes up to the HIQA standard? These people are very concerned about their future. What investment is envisaged for that in the forthcoming budget?

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I thank the Minister for coming before the committee. I want to be constructive because it is easy to be negative and throw dirt at the Minister. I know many people who have got a great service in hospital. I know many people who go to doctors or to their local health clinic and get a great service.

I also know many people who are scared out of their wits from much of what is said in the Houses. I refer to the statements of politicians in general and perhaps not to the Minister specifically.

Deputy Conway referred to the snap decision made by the HSE. It was a very cynical decision. I believe the HSE actually said it will cause as much trouble as it can and make cuts affecting the most vulnerable. Can the Minister ask those responsible not to do that and ensure the cuts do not affect old people? I do not want to see 89 and 99 year olds having their home help hours cut. I ask the Minister to micro-manage the system in a better way such that people who are really vulnerable will not be scared out of their wits. I have elderly parents who are scared.

That said, many people who enter hospital emerge much better. On listening to politicians in Dáil Éireann, one would believe that nobody gets better. There are many fine people, including doctors and nurses, working in the health service and HSE. We treat them as if they are not good people. Politicians should be trying to help those in the system. While I know the requirements of the Opposition, I believe we have a serious problem. The country is in debt and we must be positive. Perhaps I am too naive to be listening to all the negative comments. Thank God, I know many people who emerged from hospital or the doctor's practice and got better. What I really respect about the Minister is that he is a doctor. He wants to do what is best for the country and the health system.

James Reilly (Dublin North, Fine Gael)
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I thank the members for their contributions. The tone has been reasonable, which is always beneficial when we are trying to discuss serious issues associated with health. The issue of health can be very emotional, as we know. People get very upset when they cannot obtain certain services or get their child into a certain school, but this is nothing by comparison with the emotional trauma associated with being unable to have life-saving operations for one's loved ones.

Let me comment on Deputy Kelleher’s point on the OECD and primary-care efficiencies. The report acknowledges that if we do not address the high cost of service, we will not be able to do what we need to do. We must address it, including by tackling the high salaries and the high price of inputs. We have done this through the IPHA deal. It is a serious deal that will save €400 million over the next three years in respect of drug costs. We will save €15 million in respect of the generic drugs companies, and considerably more through the drug reference pricing legislation, which is currently going through the House and which the Deputy's party supports.

Concern was expressed about the expensive of universal GP care. The Deputy mentioned previous expensive deals. The country is in a very different place than it was and professionals realise that. We can achieve what we need to achieve through negotiation with them.

Jerry Buttimer (Cork South Central, Fine Gael)
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Is Deputy Kelleher’s point valid in that the cost of going to a GP has not decreased?

James Reilly (Dublin North, Fine Gael)
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Correct.

Jerry Buttimer (Cork South Central, Fine Gael)
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In other countries, the cost has increased. Part of the difficulty we encounter is that the price has a destabilising effect on many families. They are refusing to go to GPs because they cannot afford to go.

James Reilly (Dublin North, Fine Gael)
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It is not so much that they are refusing but that they just cannot afford to go, as the Chairman said. It is also a question of the cost of the care. This is why we want to extend free GP care to the entire population.

The value of 2,000 medical cardholders to a GP's practice is approximately €500 million. Many expenses must be paid from that but, none the less, that is the position. The value of 2,000 private patients, with an average visitation rate of 2.5 times per annum, at €51 per visit, is approximately €250,000. Therefore, having free GP cardholders automatically increases the income of a practice. I do not envisage us paying the practitioners any more; rather, I envisage tough negotiation on how they will be paid, what they will be paid and the sort of work they will be asked to do.

On my tour around the country, I said to GPs, in the knowledge that we must negotiate with their representative organisations, that the bottom line is that if we change the model of practice, the manpower issue in general practice will not be as acute as it is at present. It is worth saying publicly that consultants are seeing patients that GPs should be seeing, and there are GPs who are seeing patients that nurses could easily see. Nurses are looking after patients that health care assistants and others could deal with. I will refer to the INMO report in due course.

If all patients had free GP care, there would be no reason a practice nurse could not see them in the first instance and make a professional decision as to whether they needed to see a GP at all. Many patients who attend a GP at present will find the practice nurse can deal with them just as satisfactorily. In this regard, consider the number of patients who present with upper respiratory tract complaints and the number of children who present with high temperatures. Most of these illnesses are self-limiting viral illnesses that a nurse could deal with without any difficulty. Some will require the doctor, and the nurse is perfectly trained to decide who those patients are. Most chronic illness care could be delivered by a practice nurse, with the more complex cases referred to the GP. By having the right person treating the right patient in the right place at the right time, we can improve the system without it costing a fortune.

Deputy Kelleher will be aware of the circumstances in St. Mary's in Cork, which I mentioned. The physiotherapists screened all the patients coming to the orthopaedic clinic and found that 50% of them could be dealt with by the physiotherapists themselves. This does not mean that doctors, GPs, do not know what they are doing; it means that, within the current system, a public patient who cannot afford physiotherapy needs to be referred to the orthopaedic clinic where he can obtain physiotherapy at a cost he can afford or at no cost. This is utterly inefficient from the perspective of the patient and the authorities running the system.

Consider the number of people who fail to turn up at outpatient clinics for appointments. There is a considerable number of outpatients, amounting to 385,000, but we need to put that in perspective because we know 200,000 are seen every month. Non-arrivals are due to a number of factors, one of which is that if one is waiting two, three or four years for an appointment, one will forget about it. Alternatively, one may have been treated elsewhere. It is desirable to text the patient a week before an appointment with a simple request to text back, using the letter Y or N, stating whether one can attend, and to text the patient again on the day of the appointment with a reminder. If patients who are contacted do not turn up, we should charge them at least €20 on the next occasion for failing to keep their appointment, which failure will have deprived somebody else of the service.

The corollary - I said this to those in the system and they agree - is that it is utterly disrespectful and gratuitously insulting to patients to call 30 people together for a 9 a.m. appointment at an outpatient clinic.

Jerry Buttimer (Cork South Central, Fine Gael)
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Absolutely.

James Reilly (Dublin North, Fine Gael)
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There ought to be a quid pro quo and mutual respect on the part of the system and patient. The patient should be respected by the system delivering the care, but the patient should respect the fact that the system must deliver to others also and that if one abuses it, others suffer.

With regard to the average cost of the GP service, €51, one should note that it is €22 in France. This is somewhat a case of apples and oranges because there are many other supports in France that do not exist here. We will address this. I take on board fully the idea that we can address the issue of primary care and make it affordable for people by not having them worry about whether they can pay their electricity bill or take a sick child to the doctor.

A number of members, including Deputy Healy, asked me when the Supplementary Estimate will appear. The bottom line is that we have not finalised the figure we will require, but I believe it will come in under 2%. That would be a pretty good achievement given that there have been quite large supplementary budgets in the area of health at times when budgets were increasing. I do not want to become overly political about this. We are operating in a time in which budgets and staff numbers have been diminishing, yet we have managed. I compliment the men and women of the health service on managing to improve it through reducing inpatient waiting times and the number of people who must lie on trolleys.

In a general way, I wish to emphasise again to Deputy Ó Caoláin something I believe to be of critical importance, namely, this continual overemphasis on inputs, that is, on how much money or how many doctors or nurses. The focus and entire discussion must be on outcomes for patients and I have made the point to all doctors, nurses, administrators and others that if one keeps one's focus on the patient and the outcome for the patient, one will not go too far wrong. It does not matter how eloquently delivered or elegantly designed something is, as unless it improves patient outcomes, it is for nothing and is useless to us.

I always am happy to listen and I acknowledge members have concerns. As for the home help and home care situation, I am aware there always are individual hard cases that fall through the net and which we must try to address through this sort of forum and through other fora. In this instance, so many Oireachtas Members approached me with so many cases that on investigation, I found the process we had envisaged was not being followed and people were not being assessed fully before having had a service taken away. Moreover, people were having messages left on their voicemail, which is utterly unacceptable. I sent a letter to the HSE in which I agreed with the executive that from henceforth, no hours would be taken away without full assessment and there would be no voicemails. Moreover, there will be a clear mechanism for reviews and a senior manager to review monitoring arrangements, as well as a senior official for each integrated service area, ISA, to deal with Oireachtas inquiries and I hope this has happened. The letter also provided for standardised guidelines for the provision of home help, as well as clear definition of what constitutes home help versus home care because in one area, home help may be the same as home care, while in another home help and home care are two separate things. I accept this was not done in the manner in which it should have been done. Moreover, I accept that what I now have asked to be done will slow down the process considerably and the type of money that was envisaged to be saved may not be saved. However, I am more interested in ensuring that people who have been assessed as needing a service have that service than in saving money, even though I have an obligation to do that.

Jerry Buttimer (Cork South Central, Fine Gael)
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I contend that message has not yet got down to some places. However, I welcome the reassurance given here by the Minister this morning and am not being political in this respect.

James Reilly (Dublin North, Fine Gael)
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I have asked for and get weekly reports.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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What does full assessment mean?

Jerry Buttimer (Cork South Central, Fine Gael)
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I will let the Deputy back in at the end after the Minister has concluded.

James Reilly (Dublin North, Fine Gael)
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I had better conclude, because I must be out of here by 11 a.m. There are a number of issues to be raised about the Irish Nurses and Midwives Organisation's survey. While the Department has not seen the full results and has not had an opportunity to examine it, Deputy Healy in particular made some statements with which I do not agree. He stated the cuts are having serious consequences for the service and I do not accept that. It has had consequences for the service but one cannot argue with the fact that matters have improved. I acknowledge they have not improved to the extent I seek to have them improved but they have improved and that is hard, factual information. The Deputy stated that according to the Irish Nurses and Midwives Organisation, INMO, it has had consequences for the service and I do not accept that either. Its report states it could have consequences, which of course is a possibility, but I have not yet seen precisely what is in the report. Nevertheless, I will make the following points. Some major hospitals in this country have nine nurses per health care assistant, while in other hospitals, the ratio is as low as 2:1. What is that about? While the average number of nurses is higher in the United Kingdom, the average pay of a nurse there is £36,000, or approximately €44,600. However, the average pay of a nurse here is €55,000. There are a lot of issues one must consider this regard. Many community nursing units here struggle to get a ratio of nurses to health care assistants of 1:1 whereas the Royal College of Nursing in London recommends a ratio of nurses to health care assistants of 1:2.5. I accept the nursing organisations have concerns and I expect they always will consider a report from their perspective but there also are other perspectives to be considered.

Deputy Dowds asked whether the figures will stack up and I am pleased he has asked that question for the following reason. Two reports now are available to the Department, namely, the Ogden report, to which Deputy Conway referred, and the PA Consulting Group report. The Department is going to draw up its budgets in a very different way this year than has been the case in previous years. To give members a flavour of some of the things in the Ogden review, it refers to unconventional responsibility at national level in the HSE, in that financial control and reporting lie within a separate portfolio to financial management responsibility at HSE director level. It refers to low levels of professionally-qualified accountants throughout the service, in which it has been estimated that only 10% of staff involved in financial management and control are qualified, whereas in the United Kingdom the figure is 25%. This is the second biggest budget in the State. The report states the core financial management capability of the system must be enhanced and it goes through the issues about which all members are familiar, such as computer systems not talking to one another. According to the findings of PA Consulting Group, the HSE's current budget difficulties are a consequence of systemic failings in financial management over a number of years. Moreover, the operating model remains tied to the previous health board structure and multiple legacy systems are in use, while the systems and processes in place do not deliver an integrated financial performance framework that operates consistently across all regions. This creates inconsistencies in approaches to data collection, analysis and financial performance management and does not support effective consolidation. Furthermore, limited financial management capabilities exist among the staff and the system and where this does exist, it is under significant pressure. The PA Consulting Group report then makes the comment that the Ogden review is the latest of a series of reviews that have highlighted systemic weaknesses in financial management within the HSE since its inception. Members are all aware that because of the budgeting system in place, there really is no incentive for people to stay within budget and when they do so, their savings are taken from them, instead of being left with them to bring about greater innovation in their service. I want to change all that.

Robert Dowds (Dublin Mid West, Labour)
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What is the biggest reform that must be undertaken in the entire area?

Jerry Buttimer (Cork South Central, Fine Gael)
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Thank you, Deputy. I will bring you in at the end.

James Reilly (Dublin North, Fine Gael)
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In my view, there is no single biggest reform as what we are doing is reforming the entire system. This is a valid and important point to make. I keep using John Donne's line, "No man is an island, entire of itself" and no part of the health system is an island entirely unto itself. If one hopes to fix the emergency department problem, one must fix what is happening elsewhere in the hospital and in respect of long-term care and home care in the community. Moreover, one must sort out primary care in the community in order that people do not end up in hospital in the first instance. This is what we are doing and we are going at it across the entire system. While it is a massive amount of reform, it is the only way to do it. In the past, it has been done incrementally but that has not worked. Moreover, if money could have solved it, it would have been solved a long time ago. I hope people get a flavour of the direction in which we are going. It really has been a huge challenge and I again thank the men and women working in the service who have taken on this challenge and who now are growing in confidence. As I have stated previously, I am more convinced than ever that we will succeed because of the new leadership that is growing, both within the service itself and at managerial level, as well as within the Department and the HSE. Consequently, I believe the budget plan this year will stack up and that is the way it is going to be done. I intend to bring the service plan to the Cabinet for its approval and to go through it in order that everyone knows precisely what it is we are talking about and what are the implications.

The changes to the HSE obviously are very important. The Deputy has mentioned directories and I note the Health Service Executive (Governance) Bill is going through the Chamber at present and will be through before the end of the session. Even if Members are obliged to sit on Fridays and Saturdays, I want to get that Bill through. Several people have mentioned core pay and that the Croke Park agreement protects this and so it does. However, there are many other aspects of creating increased productivity. One does one or two things, in that one can cut the cost of service either by cutting pay or by getting more service for that pay and I prefer the latter. However, I wish to debunk one point that is in the mind of many people. I acknowledge it also was in my mind for many years, until Dr. Martin Connor did the analysis, which is that the hospitals soak up all the money. The first point is the non-hospital budget is twice that of the hospitals in the health service and the second point is that since 2009, the non-hospital budget has fallen by 11%, while the hospital budget has fallen by 21%. Consequently, we are reaching the point in the hospital sector at which we cannot continue to cut because we are on the bone.

Ciara Conway (Waterford, Labour)
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Can I-----

Jerry Buttimer (Cork South Central, Fine Gael)
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I will bring in the Deputy at the end.

James Reilly (Dublin North, Fine Gael)
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If I may, I wish to come back to the whole issue of outcomes for patients. We have pretty good measurements for outcomes in hospitals, which include average length of stay, waiting times, how many people are treated, how many are readmitted within 30 days and so on. However, we have very little by way of measurement of outcomes in primary care. As a general practitioner, I believe it must improve one's outcome to be able to see one's GP within 24 hours but I cannot prove it. If I could prove it, I would then know what activities GPs undertake that improve outcomes and those which are more questionable, which would let one focus on the areas in which one gets the outcomes one desires for the people.

There was a comment made that managers could have found more savings, had they more time. This happens continually and to cite Tony O'Brien from our tour of the hospitals in the system, yes, because of the way in which we have done budgeting the past, we end up making hard, snap decisions late in the year that are tantamount to vandalising the system. No one wants to be cutting home helps and home care, as that is the last place one would wish to be making cuts.

However, if a gun is put to one's head and one has to get cash, this is one of the few places to do so.

Next year that is not going to happen. We have put in place six financial people at senior level, one in each of the regions, one in the Department and one in the payments board. We are going to address this problem in a far more open way where people will have transparency around their budgets. That is the whole point behind the directorates. It is astonishing that we see 3,500 people in our emergency departments every day but we see 120,000 people in general practice every day. God knows how many people see the public health nurse and others in primary care, yet we have had no director of primary care. We will now have a directorate of primary care and there will be a clear line of budget, with the same for mental health, social care and hospitals.

We have to be assured that money voted by the Oireachtas for a particular purpose is used for that purpose. We saw a few years ago that €6 million voted for palliative care was not used for that purpose. In addition, money voted for mental health was used elsewhere. That is not acceptable and it undermines democracy.

Deputy Peter Fitzpatrick spoke about more investment in nursing homes to bring them up to the HIQA standard. There is a fund available for that in the capital plan. It is not a huge amount of money but it is there.

Deputy Mary Mitchell O'Connor's comments are apt. I have dealt with the cynical snap decision but we all tend to think of the worst case scenarios and hard cases, while forgetting about the rest. From my personal experience as a GP, one could see a couple of hundred patients per week. The person who was not happy is the one on a doctor's mind. One would forget about the other 199 who went away reasonably happy or pleased. I would not like to overstate the case in case ten of them come out of the woodwork but, on a serious note, we tend to look at the hard cases.

We have a very good health system, with excellent men and women working in it. We have some of the best doctors, nurses and allied care professionals in the world in this country. Some of the best managers in the world are Irish men and women, so why do we not have the best health service? That is the question. The answer is that over the years, government after government has allowed it to develop chaotically. I am not allotting political blame here because several parties have been in government in that period. We are now setting out to address this. We want to create a system, with the advice of those who work in it, that will allow them to deliver the excellence they have been trained to deliver. They are capable of delivering it and want to do so.

Jerry Buttimer (Cork South Central, Fine Gael)
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Deputies Healy, Ó Caoláin and Conway have indicated.

Deputy Séamus Healy:

The Minister has not address the question of funding the service I raised concerning a wealth tax. Obviously he is not going to do that.

Jerry Buttimer (Cork South Central, Fine Gael)
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That is a budgetary matter.

Deputy Séamus Healy:

It is a very important matter and is a vital factor for health services in this country. I welcome the Minister's acceptance that hospital services have been cut to the bone and reduced by 21%. I wish to ask him two specific questions. He has said there will be no cuts to home helps without a full assessment. What is meant by a full assessment? From what I am hearing on the ground and from people who have contacted me regularly, there is no assessment.

The assessment for the fair deal scheme was normally done by a collaborative arrangement through an assessment committee. A further tier of assessment has now been added to this, which is called a comprehensive geriatric assessment. More and more people are being referred to this particular assessment for approval or otherwise. I have heard of people as old as 99 years of age being referred for it. Apparently, it is a three hour assessment done by geriatricians, physiotherapists and occupational therapists for an individual of 99 years of age.

Jerry Buttimer (Cork South Central, Fine Gael)
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We cannot discuss such schemes now.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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Is this acceptable? Does the Minister know anything about it? Will he stop it?

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I also welcome the fact that the Minister has indicated that cuts to hospital budgets have reached rock bottom. In my view they have gone well beyond that. I hope we will not see any further cuts directed towards that network.

I also hope the Minister was indicating that there would be no further cuts in home help hours and packages. These cuts have been cruel, unnecessary and immoral.

Jerry Buttimer (Cork South Central, Fine Gael)
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Can the Deputy put a question to the Minister, please?

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am asking that there would be no further cuts. Can the Minister give any indication that there will be a reversal of cuts that have already taken place? I take on board the fact that the Minister indicated a comparable saving towards the end of this year concerning his renegotiation with the pharmaceutical sector of some €16 million. The figure of €16.9 million would not only reverse the cuts that occurred at the end of August but also those imposed last January in budget 2012. I urge the Minister to take on board that it is not only opposition voices who are saying this. In a recent edition of the Limerick Leader, the Minister's colleague, the Minister of State with responsibility for housing and planning, Deputy Jan O'Sullivan, correctly indicated the total unacceptability of the examples of cuts that have been imposed on home help hours and home care packages. She pledged to do all she could to have them reversed in specific instances. I have no doubt she is committed to seeing that addressed comprehensively across the board. It is therefore something that both Government and Opposition Members are hugely discomfited by.

Jerry Buttimer (Cork South Central, Fine Gael)
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Can I ask Deputy Conway to be very brief?

Ciara Conway (Waterford, Labour)
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Yes. I have two final comments. I welcome the Minister's commitment to reform in terms of the budgetary process. I know that it does not always get the headlines and it is not the most exciting part of health care reform but it will be integral to the roll-out of services in future. Everyone needs their own delineated budget so that we do not have a budgetary criss-cross. In the past, hospital beds have been closed in local areas due to overruns in child care. Only 12 months ago, a number of children's cases were referred to the High Court and the bill was in excess of €3.5 million. It equated to beds being closed in a community hospital. Delineated budgets will therefore be very important for the delivery of services. I welcome that kind of reform.

The Minister mentioned cash and, as we know, €214 million is still outstanding from private health insurance companies. If we are looking for cash savings, rather than going after home helps we should go after private health insurance companies and consultants to ensure that they sign off on the forms.

Robert Dowds (Dublin Mid West, Labour)
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I thank the Minister for his contribution. Can he answer the issue I raised about agency nurses?

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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While we have not mentioned them here, certain charities do a lot of good work. I ask the Minister not to cut funding to charities, such as LauraLynn House and the Sunshine Homes. They are really good charities that help children, while others provide guide dogs for the blind.

Peter Fitzpatrick (Louth, Fine Gael)
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The new agreement between the Minister and the Irish Pharmaceutical Healthcare Association, involving €400 million over three years, is fantastic news. Can the Minister provide a rough breakdown on how that figure was arrived at?

Jerry Buttimer (Cork South Central, Fine Gael)
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In his speech earlier, the Minister said there is a level beyond which further expenditure reductions can cause real harm. Are we at that point or fast approaching it?

As regards disability, we met this week with the COPE Foundation in Cork, which has said it cannot take any more cuts. Are there any plans to ring-fence money for disability?

James Reilly (Dublin North, Fine Gael)
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Deputy Healy asked about a full assessment and he mentioned an issue concerning a three-hour assessment. As regards the full assessment, the focus was to be around those most dependent and who required personal care services. The idea was to maintain those, if necessary by reducing the lesser dependent people who may be just getting household duties, shopping and cleaning.

What was meant by a full assessment? That should have involved the care providers and the Health Service Executive to assess if the situation had changed. Home care packages, in particular, rotate all the time. The classic example is the 65 year old man who has his hip done and whose wife has some rheumatoid arthritis so is not able to help with lifting him when he is allowed home after his operation. Apart from needing a nurse and a physiotherapist, he will require a home help to assist him getting in and out of the shower. After several weeks the nurse would not be necessary any more. After several more weeks, phyiso would be done on an out-patient basis and then, after several more weeks, the home help would not be necessary either, meaning the whole home care package moves on.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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I do not accept that. These are not the kinds of cases we are raising.

James Reilly (Dublin North, Fine Gael)
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I accept that but I am just giving an example.

I am not quite sure what the Deputy is referring to about three hour assessments. However, if it is a three hour process in assessing a client’s needs, then it is a good development. I do not believe anyone would be happy with a five or ten minute assessment. We need to have comprehensive assessments so as to provide the best and most appropriate supports to a client.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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At that age, three hours is somewhat long.

James Reilly (Dublin North, Fine Gael)
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I have a real concern about the assessment tool, a point raised by Deputy Ó Caoláin. With the fair deal, not alone did we find funding was difficult to follow once it went below the regional director of organisation level, but even though we had a supposedly uniform process for assessing people for long-term care, it was not uniformly applied. There were different professionals in different areas applying it in different ways. The consequence of this was that some people who did need long-term care urgently were behind those who did not need it that much. This is being addressed not just for long-term care but for all services for elderly people.

Up to €200 million is spent on home help and home care. When we review the fair deal process, I believe the emphasis should be further back. People tend to follow where the resources are and they know there are moneys available for long-term care to which they gravitate. Subsequently, we find people ending up in long-term care before they need or want to be there.

Deputy Ciara Conway referred to outstanding moneys owed by health insurers. There is certainly a couple of hundred million euro outstanding but €125 million will be collected before Christmas. That means there is €100 million owed which we will pursue next year aggressively.

Deputy Dowds raised the point about agency workers and how it would be more suitable in some cases to appoint permanent staff. We are in talks with the Department of Public Expenditure and Reform about taking on recently graduated nurses for a nursing bank. It would be somewhat like the JobBridge programme. Negotiations need to take place with the INMO, Irish Nurses and Midwives Organisation, on this too. It will mean we will have more nurses we can use instead of agency nurses. While agency nurses are very fine people, the reality is they cannot be trained in specialised areas because they are moving and changing all the time.

I referred earlier to hospital group managers and Galway because of its success. It would have had 9,901 people waiting for nine months or longer if they had not been treated by September. They were all treated. The hospital had on average 27 people on trolleys each day, regularly up to 50. That number is now an average of seven people with none on some days. This has been achieved through the group hospital scheme. It gives the chief executive officer of the group hospitals the opportunity to re-orient staff. The other good point out of this is that Roscommon hospital, which is part of that group, is now busier than ever doing work that is safe. It now does plastic surgery, as well as dealing with rheumatology and has a sleep apnoea clinic. The future of that hospital is secure, delivering a wider range of services to people than it did before and doing so safely. These managers should not just have control over their budgets but over their recruitment. They know whether it is another nurse they need or a new physiotherapist. We also have to give them some power over procurement even though central procurement can give us greater savings. Sometimes procuring locally can ensure better deals.

An example was given of four different items procured by four different hospitals. One hospital was charged €66 for one item while another hospital was charged €25. The stunning point about this was they were all purchased from the same wholesaler. There is much money to be saved in many ways. Another issue surrounds the amount of stock kept by hospitals. The larger hospitals would keep €20 million in stock while in Germany this is used as the parameter for stocking a hospital of 10,000 beds. Our whole health system has only 11,000 beds so there are significant one-offs to be made.

Deputy Mitchell O’Connor spoke about charities, such as LauraLynn House, providing great care across a range of areas. There are 3,500 of these agencies. We have a real issue with some of them in that they will not tell us how much they are paying their chief executive officers, how many staff they have and how much goes on salaries. If we are going to do a service level agreement with any of these groups, all of this information will have to be supplied or we are not signing up with them.

The Chairman asked if we have gone beyond the level at which reductions become dangerous. The OECD report states the safest lowest health spend is 3% of gross domestic product but once below that then there will be trouble. He referred to the disability sector and specifically to the COPE organisation which believes it cannot take much more. Will its provision be ring-fenced? Last year, every sector got a 5% cut while disability got a 3.5% cut. The problem with ring fencing is that the more one does it, the less one has to deal with it and then the cuts elsewhere become really difficult. I do not want to be cutting services but the cost of services. That comes through many different ways such as increased productivity and working in different ways.

Organisations involved in disability will have to change the way they operate. In the past, they received moneys from government to look after the people with whom they are charged. We want to move to the money-follows-the-patient model in the disability area which will mean individualised and personalised budgets. That empowers the person with the disability and they will choose the service they want from the various providers. This will change the dynamic and I believe this is the right and moral thing to do.

Jerry Buttimer (Cork South Central, Fine Gael)
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We will have that debate another day.

James Reilly (Dublin North, Fine Gael)
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I thank the Chair and the committee for their questions. I am sorry we were not able to discuss the Estimates in the finer detail that some would like as we cannot do so until budget day. The budget has not even been signed off on in my case. I have to go back to deal with that now.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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When will we have the Supplementary Estimate?

James Reilly (Dublin North, Fine Gael)
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It will be in early December.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank the Minister and his officials and the HSE for attending this meeting. I thank members for their positive engagement.