Jerry Buttimer (Cork South Central, Fine Gael)
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Deputy Ciara Conway is running late and has sent her apologies.

We are meeting to consider the 2012 Supplementary Estimate for the Department of Health - Vote 39. I remind members to limit their remarks to the Supplementary Estimate as we are not dealing with the totality of the Estimates.

All mobile phones should be switched off.

I welcome the Minister for Health, Dr. James Reilly and his officials, Ms Bairbre NicAonghusa, Assistant Secretary and Mr. David Smith from the Department of Health. Mr. Liam Woods is from the HSE.

The Minister will make his opening remarks, after which the Opposition spokespersons will have the opportunity to respond. We will then have an open discussion. Is that agreed? Agreed.

James Reilly (Dublin North, Fine Gael)
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I thank the Chairman for his warm welcome to my officials and me. Let me extend seasons greeting to everybody, as I doubt we will see each other again before Christmas.

Jerry Buttimer (Cork South Central, Fine Gael)
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There is a long way to go before Christmas.

James Reilly (Dublin North, Fine Gael)
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Never say "never" and always avoid "always".

I thank the select sub-committee for giving me the opportunity to bring before it this Supplementary Estimate for Vote 39. The total additional funding being sought for the HSE is €360 million. I am allocating a once-off extra Exchequer receipt of €45 million from the Medical Defence Union, MDU and savings of €70 million, which have been identified within my Department's Vote and will contribute towards the HSE requirement. Thus the net cost to the Exchequer is €245 million. Chairman, this represents just 1.8% of the health sector budget for 2012. Given that we are in a time of ever-reducing budgets in the past three years, with a reduction of €2.5 billion, I believe this not to be unreasonable.

This Supplementary Estimate must be seen in the context of the challenges that faced the Health Service Executive this year. As Deputies will be aware, the health sector faced a very significant financial challenge in 2012 and 2013 will be no different. The 2012 national service plan was based on the achievement of cost reductions of €750 million to meet the cost of delivering the maximum level of services possible and commitments in the programme for Government. A range of saving measures were identified in the Estimates to enable the HSE to meet these objectives in the implementation of the plan. The shortfall in the HSE reflects the underlying expenditure difficulties in the acute hospital sector, child welfare and protection services and the demand led scheme. It is worth emphasising that there are demand led schemes in health and a demand led element in our hospital services, which I will identify later.

This Supplementary Estimate together with the savings in my Department's Vote, the extra Exchequer receipt from the MDU and other measures being taken by the HSE should ensure the HSE achieves a balanced Vote at the end of this year. An additional €162 million has been sought to meet deficits in services, specifically in the acute hospital sector and child welfare and protection services. Spending on the primary care reimbursement service - effectively a demand led scheme - is projected to be in the region of €230 million in deficit by the end of the year.

I will outline the details of the Estimate and the other measures being taken to address this year's deficit. First, however, I will outline the reforms which have been initiated to strengthen the financial management system of the HSE. My Department undertook strategic measures during 2012 to address the ongoing financial issues in the HSE. A review of the financial management systems in the HSE was commissioned. Its overall intention was to review the present state of the financial management system in place in the health sector in Ireland in the context of the serious overruns projected, the continuation of a challenging financial environment for the foreseeable future and the radical reforms envisioned in the programme for Government. The review came up with a number of recommendations to strengthen the financial management process in the HSE with particular reference to managing the transition phase that the health sector is currently undergoing. Subsequently PA Consulting were engaged to draw up urgent measures to be put in place to strengthen the HSE's financial management capacity and processes, having regard to the findings and recommendation of the Ogden review. My Department is now working closely with PA Consulting and the HSE on a financial improvement programme for the HSE. We have had many descriptions of the problems in the HSE over the years, but no remedy described and applied to it. That has now changed with the measures being put in place following the PA Consulting report.

The sector faced very significant financial challenges in 2012. The budget targets set for the HSE were extremely demanding and regrettably were not all achieved. The impact of the retirements under the "grace period" posed significant challenges, given that 4,700 people left the sector before the end of February. While cost containment plans were rolled out across the health sector, the continued escalation of expenditure and PCRS has resulted in a projected deficit for the HSE this year.

As 4,700 staff left the HSE, this meant we had to pay out considerably more in lump sum superannuation payments, however it did not mean we got savings across the board as many of these people had already left active service but had never formally retired and now took the opportunity to do so. That had a further negative impact on the HSE budget.

My Department has worked intensively with the main health insurers to agree a system of cash flow and accelerated payment, which will provide a cash flow benefit this year. At any one point in time, some income will be outstanding for the treatment of private patients in public hospitals but reducing the time taken to recover the income outstanding will provide a cash flow benefit to the HSE. This will be achieved in 2012 via the income collection agreement which has been just finalised with the three main insurers.

The income collection agreement will reduce the total level of income outstanding to the HSE by insurers as it involves insurers making accelerated payments based on 70% of the estimated value of claims that have not yet been reported to insurers. The balance of 30% will be paid upon the validation of a fully collated claim from the HSE. The payment relates to treatment that has been already carried out in public hospitals but for which a claim has not yet been raised and therefore it is not an advance payment.

Under this agreement the HSE will have a once-off cashflow benefit of €100 million to €110 million in 2012, which will reduce the level of income outstanding to the HSE and will therefore reduce the projected deficit by a corresponding amount. The money is a once-off payment in respect of private patients who have been already treated in publicly funded hospitals, but where the detailed claims have not yet been received by insurers.

This year, 2012, has seen an increase in expenditure in acute hospital services, above what was originally forecast in the national service plan. There are indications that cost containment measures put in place by the HSE are reducing expenditure, but activity has increased and therefore additional funding is required. Again, there are demographic pressures as our population grows older. This leads to more attendances at accident and emergency departments, as we have seen, and more admissions to hospital. However, it is good that people are living longer. Second, there has been an increase in the number of births, with 75,000 in the past year. This is also good for our country but it places an additional strain on our services. These are truly demand led areas.

The 2012 national service plan set access targets for inpatient and day case treatment whereby no adult should have to wait more than nine months for an inpatient or day case procedure date and no child should have to wait more than 20 weeks for an inpatient or day case procedure date. No patient should have to wait more than 13 weeks or three months for a routine gastrointestinal, GI, endoscopy procedure. I am happy to report that the number of people waiting for more than nine months for treatment has dropped 91% since the beginning of this year, while 70% of hospitals have fully achieved the target of having nobody waiting for more than nine months for treatment. I am also pleased to inform the committee that there have been significant improvements in access to scheduled care, that is, elective surgery for inpatient or day case, since the special delivery unit, SDU, was formed. At the beginning of October, for example, there was a total of 8,250 patients to be treated before 20 December 2012 for the nine month maximum wait time for elective surgery to be met. Of these, as of the end of November, 5,846 patients or 71% had been treated. In paediatrics, 68% of those patients waiting had been treated. Furthermore, 79% of patients waiting for an endoscopy procedure at the beginning of October had been treated by the end of November.

This progress is real and hospital management, staff, the SDU, clinical programmes and the HSE are all to be commended. However, it must be acknowledged that the impact of the retirements under the "grace period" has seen an increase in overtime and agency costs. Thus, additional funding of €162 million is required to address the deficit in acute hospital services. This use of agency and overtime will be much reduced if there is a successful conclusion to the negotiations, being led by Department of Public Expenditure and Reform, on the new Croke Park agreement.

With regard to the primary care reimbursement service, PCRS, the main drivers are the increase in the number of full medical card holders while claims for high tech drugs and medicines continue to increase. The excess of medical cards over what was projected in the HSE service plan arose for two principal reasons - a backlog in applications from 2011 was cleared at the start of this year and there was a higher than anticipated number of applications for new cards. The HSE's 2012 national service plan provided for 1,838,126 medical cards, which reflected a planned-for growth of 105,000 or 6% in eligible persons in the year. The number of persons eligible for a medical card at the end of October 2012 is 1,836,689. This is an increase of 142,626 from 1 January 2012 or an increase of 8%. It represents an excess of 37,626 over planned growth for 2012. It is not possible to forecast precisely the end-year number of medical cards as this will depend on the number of people that apply for a medical card, the number of cards that are successfully renewed and the number of cards that expire during the remaining months of the year. It is clearly also a function of our economy.

To address the deficit in PCRS, an additional sum of €234 million is required. This is clearly demand-led, as is the increase in emergency department attendances and hospital admissions. These are due to an increase in population. Between 2006 and 2011 the population increased by 8.2%. The number of people over 65 years old increased by 14% and the number of people over 85 years of age increased by 22%. This is a good news story, but it has implications for our health services.

The committee will be aware that I recently announced the intensive negotiations with the Irish Pharmaceutical Healthcare Association, IPHA, had reached a successful conclusion with a major new deal on the cost of drugs in the State, with a value in excess of €400 million in the next three years. The new deal, combined with the IPHA agreement reached earlier in the year, means €16 million in drug savings this year with much greater savings to be achieved over the next three years. The cost of new drugs in 2012 is estimated to be approximately €15 million. Examples include the cancer drug, Ipilimumab, and the Hepatitis C drugs, Boceprevir and Teleprevir. It is estimated that the deal will generate savings of up to €116 million gross in 2013.

As I said, my Department has identified savings of €70 million within its budget. These savings arise within my Department's directly funded agencies, savings on legal costs and savings within the National Treatment Purchase Fund. There is also a saving of €7.5 million on my Department's capital Vote. In addition, a once-off extra Exchequer receipt of €45 million from the Medical Defence Union will also offset the amount of supplementary funding required from the Exchequer. This €45 million cash lump sum is in settlement of ongoing legal proceedings that sought to recover money paid by the State on behalf of refused Medical Defence Union, MDU, members. These consultant members of the MDU found themselves in circumstances where they were refused indemnity cover by their medical defence organisation. This dispute has been ongoing since 2004 and it is both timely and in the State's interests that a resolution has been reached.

In summary, given the extent of challenges faced by the executive in 2012, the extra funding being requested through this Supplementary Estimate is relatively small. The executive has been through a challenging year and faces an even tougher year ahead. My intention in bringing forward this Supplementary Estimate, together with the other measures I outlined, is to reduce the incoming deficit for the HSE as it faces into a difficult year in 2013.

In conclusion, I seek the committee's approval to the Supplementary Estimates for Vote 39.

Billy Kelleher (Cork North Central, Fianna Fail)
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I wish the Minister and his colleagues from the HSE and the Department a happy Christmas.

We are here because at the same time last year we pointed out that there were deficiencies in the budget arithmetic. I do not know how the Minister came to those conclusions, but he did and it was obvious from as early as March last that the budget was in rag order and was deficient in terms of trying to provide services. The Minister referred to demand led schemes, the increase in the number of medical card holders and other issues that could not be foreseen. However, as early as March this year the former chief executive officer, CEO, of the HSE, Mr. Cathal Magee, said that the budget arithmetic was no longer valid and that the premises on which it was based were also no longer valid. That is an indication of why we are here this evening, because it was identified last March. In fact, when one looks at the aspirational nature of the budget arithmetic last year, it was evident that unless Government decisions were made and legislation was passed early in 2012 the budget would be in difficulty from the start. I can point to a few issues such as hospital consultant pay, price referencing, generic substitution, agency staff and private health insurance recoupment. None of those issues was dealt with comprehensively or in a meaningful way by the Minister, the Department or the HSE by bringing forward the proposals that were a critical component in the arithmetic of the Estimates the Minister presented to the House last year. It is for those reasons we have always maintained it was a flawed budget from the start.

We are now ramming through a €360 million budget overspend. Only a couple of months ago people with intellectual and physical disabilities were outside the gates of Government Buildings protesting at cuts that were miserly in terms of the overall budget. If the budget had been reined in, as had been warned in the previous March, they would not have had to be there and the Minister could have gone about his business in a more orderly fashion, without forcing people to take to the streets to hold onto their basic rights.

Actually, it was not just their basic rights. We were not asking for much, only for people to retain their special needs assistants, SNAs, home care packages and home help hours. Overall, the figure amounted to approximately €40 million in a full year.

What savings have accrued from the reduction in home help hours and what contribution have they made to the budget overrun? Tonight, we will pass a €360 million Supplementary Estimate. This is the key issue. The overrun was forewarned. It is not as if the Minister woke up in mid-October and realised that there was a budget overspend. While there was an increase in medical card applications and other demand-led schemes where judging demand proved difficult, that there would be an overspend was pointed out to the Minister as early as March.

We have heard this before. Some €45 million is being clawed back from the Medical Defence Union in a one-off payment. We are clawing back an upfront payment from health insurers to bring those moneys into this accounting year and to ease pressure so that the Supplementary Estimate is €360 million as opposed to €500 million. However, we are only buying time. There is no point in any of us pretending that next year will be rosier. The fundamental principle of any budget is that it must be sustainable from the outset.

Distasteful cutbacks have been announced. There were other options, yet there was inactivity in the renegotiations with the Irish Pharmaceutical Healthcare Association, IPHA, and a reversal in a commitment under the programme for Government. Just one line long, that commitment was made with a great deal of fanfare by the Minister, namely, a reduction in hospital consultants' pay.

The issue of agency staff was also identified. There is no point in the Minister claiming that he did not anticipate the number of people who would retire. Some 4,700 people left the health services. Of course a large body of people would retire. It had been well flagged for a year in advance. The Minister made great claims that many people would leave without services being disrupted.

For all of these reasons, it is difficult to believe that we will not be back here again this time next year. The Supplementary Estimate must be introduced, but the disruption endured by the many people who have been required to protest and advocate for their basic rights was unnecessary. I do not blame the Minister for every element, but he has stated that he is accountable. People are struggling to hang onto home help hours, SNAs and home care packages.

This is a false accounting exercise. The Minister has stated numerous times that the point is to move people from the acute hospital setting to step-down facilities or their homes as quickly as possible. However, all of the recent policies that the Minister has announced to try to address the budget deficit are contrary to what he has been advocating.

We are debating passing a budget of €360 million, yet we are already starting 2013 on false budgetary arithmetic. Consider the issues of price referencing and generic substitution. The €400 million was announced with fanfare, yet the saving in the three-year period will only be €190 million because of the deal on high-tech drugs and the quid pro quowith the pharmaceutical industry.

It is difficult to support the Supplementary Estimate knowing full well that we identified this budgetary approach as being flawed almost 12 months ago. It remains flawed and, unfortunately, we will be undertaking the same discussion this time next year because of smoke-and-mirror-type budgetary exercises.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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It is not inappropriate to once again use the word "bizarre" in respect of this situation. When the signalled €750 million in cuts in terms of the current year first presented on top of €1 billion in cuts in 2011, I and other voices indicated at this committee and on the floor of the House that it was unsustainable and that our population's needs were going to run contrary to the Minister's approach. This has proven to be the case.

The backdrop to the Minister's further cuts of €130 million last August was a dogged refusal on his part to accept that the situation was unsustainable. Despite repeated denials and a dogged rejection of the concerns of this and other Deputies, the Minister is now before us with a €360 million Supplementary Estimate to prevent services collapsing before the end of this month. Of the €130 million in cuts that the Minister announced at the end of August, one of the smallest elements, but by far and away the most notorious, involved the 450,000 hours cut in home help hours and a €1.8 million cut in home care packages.

I am willing to support this Vote because I recognise that it is needed. I am using the opportunity to appeal to the Minister once again to recognise the serious pain, fear and discomfort that has been caused across the State as a result of those particular cuts. I ask the Minister to use a small element of the €360 million provision to reverse those cuts and to restore the home help hours and home care packages. This is the very least that should be done. They should be restored to pre-budget 2012 levels.

I wish to ask a couple of questions regarding the Minister's press conference last week. In the statement by the Minister of State, Deputy Kathleen Lynch, she said that there was a commitment, and I have examined the press statement-----

Jerry Buttimer (Cork South Central, Fine Gael)
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I do not want to interrupt the Deputy, but we are dealing with a Supplementary Estimate.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am dealing with the point that I have just made. At the press conference last week, the Minister of State mentioned that there was a commitment to restore home help services. What does this mean? It was also included in her press release. In fact, she "welcomed" - that was the phraseology used - the commitment to restore. What does this mean in real terms going into 2013? Does it only mean that there will be no further home help cuts in 2013 or, in line with the normal person's understanding of the English language, as is the case for most of us, does it mean that what has been taken away will be restored?

The single largest element of this Supplementary Estimate comprises the medical card services and community drug schemes. Some €240 million of the additional €360 million is required. I have no hesitation in supporting this, as we have mass unemployment, tens of thousands of people are no longer able to afford private health insurance and people are being further pushed into poverty as a result of social welfare cuts and job losses. The medical cards are required. This is inevitable and predictable. However, what did the Minister mean when he stated at last week's press conference that there would be further restrictions on medical card eligibility next year? Will he elaborate on what he meant by that? Both commentaries - by the Minister of State and the Minister - require clarification, one in respect of further restrictions on medical card eligibility and the other in respect of restoring home help services.

In the Minister's address to the committee, he stated, "The impact of the retirements under the 'grace period' posed significant challenges given that some 4,700 people left the sector before the end of February".

The Minister has signalled 3,500 further cuts in staffing across the health services in the coming year. Surely this will have an equally serious impact and there will be no real savings as a result of dispensing with staff. The reality is that there may be no savings at all and the real result from a cut in staffing will be cuts in services which make it more difficult for people to access services and further delays in the initial point of contact with health services.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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This budget was not sustainable, and we have known that from the outset. That is where we must start.

Jerry Buttimer (Cork South Central, Fine Gael)
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We are dealing with the Supplementary Estimate.

Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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It is the reason we are dealing with a Supplementary Estimate. It was accepted by senior people in the HSE that the budget was unsustainable from very early this year. There were €1 billion in cuts last year and €750 million in cuts this year. We are talking about a Supplementary Estimate of €360 million, with the prospect of another €781 million in cuts in 2013, along with a loss of 3,200 additional staff. I am seriously worried about the patients and the public using the health services.

In the early autumn there were €133 million of cuts, and I will briefly focus on the home help part of that. The Minister has given assurances that a process will be put in place with the home help hours but I would like to see the cuts reversed. Nevertheless, the Minister has given guarantees regarding the process by which the reviews of these home help hours will be done. I am satisfied that what the Minister has indicated is not happening on the ground.

One of my constituents is wheelchair bound, with no use in one hand and very limited use in the other hand. This person is unable to stand, go to bed, use bathroom facilities or cook unaided. That individual was assessed in October this year as requiring the hours that she had been allocated. A month later she was supposedly assessed again, with the number of hours reduced. Within a month, this individual's circumstances had not changed and there was no assessment either by a public health nurse or another professional but there was a reduction in the home help hours. That is just one of a number of cases which I can relate, and I am sure other Deputies can do so as well. Will the Minister comment on the question of home help hours?

Will the Minister confirm that this Supplementary Estimate will allow him to open again the respite beds that were closed in the Community Hospital of the Assumption in Thurles? Both the Minister and a local Fine Gael Deputy promised that these would be open again before the end of the year. The Minister stated that his Department is working closely with the HSE and PA Consulting on a financial improvement programme for the HSE. What does that mean and will we get details of it? Will the Minister detail what exactly is being done in that regard? Will he indicate what capital projects are affected by the reduction of €7.5 million in the capital Vote?

Robert Dowds (Dublin Mid West, Labour)
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I will be supporting this Supplementary Estimate as it is very important to keep the show on the road. Will the home help hours be restored fully for everybody requiring them? Am I right in thinking the reason for the Supplementary Estimate is because, for example, it was not possible to collect money in time from health insurers? Are we likely to have a similar problem next year?

Jerry Buttimer (Cork South Central, Fine Gael)
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With regard to the overspend, the HSE west is to be allocated 12.5% of the total revised Estimate as opposed to HSE south, with 8.6%; Dublin north-east, with 6.94%; and Dublin mid-Leinster at 5.56%. Why are services in the west getting more than the rest?

James Reilly (Dublin North, Fine Gael)
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Is it the old adage of "Up the west and ... the rest."? On a serious note, I will deal with the questions as they were posed. Deputy Kelleher keeps alluding to a budget deficit of €360 million but I have pointed out that from within our own resources, the budget deficit is at €245 million. That is what is being sought. The Deputy mentioned the previous chief executive of the HSE, indicating that he spoke about the accounts before this committee, referring to two issues in particular. The first was that money from insurers had not been collected but at this stage, in excess of what was intended to be collected has been recouped. The second issue was the need to get cheaper drugs. A deal has been done which far exceeds what was originally envisaged, although not all of it will come this year.

Deputy Kelleher argued there was a complete lack of negotiations but intense negotiations were ongoing all year. The Deputy knows that the pharmaceutical industry is a major employer in this country, with over 20,000 people in the sector and 100,000 people indirectly dependent on it. There are billions of euro in exports and income to the State from this area. It is difficult to ensure that we continue to support the industry in the research, development and innovation in new drugs while at the same time making it very clear that we need much better value for money for existing drugs and many drugs that will be going off patent. We have reached a good deal from the perspective of the taxpayer and patient who will consume the pharmaceutical agents.

Many agents have described the problem but very few give us a remedy. PA Consulting has done that and I will elaborate on that presently. There was no reduction in the run rate until the new acting chief executive, Mr. Tony O'Brien, took over; there has been a reduction in September, October and November. That process will continue and I have absolute faith in the new director general designate.

Nobody with a disability had personal assistance hours cut. There was some reduction in home help, as mentioned by others. The issue has been of considerable concern to people. I have read to this committee on a number of occasions the list of issues that I sought to be addressed during the course of any reduction of hours. This was not done initially.

That is why I instructed that methodology to be put in place and no hours to be reduced unless people had been fully assessed. That has slowed things down considerably so that instead of saving in excess of €8 million, the savings achieved are around €3 million. As I have said before, however, I am more interested in people having the service which they are assessed as being in need of than I am in saving money.

The Deputy said he heard it all before, and he certainly did. His own current leader had €668 million of supplementary budgets during his tenure in the Ministry of Health at a time when the budgets were increasing and the country was awash with money. I do not accept any criticism from Deputy Kelleher or his party on a modest Supplementary Estimate of 1.8% of budget against a background of €2.5 billion having gone out of the health budget in the last three years and more than 6,000 staff having gone. Deputy Kelleher alleges we should have know precisely how many. The figure anticipated was 3,500. Neither Deputy Kelleher nor anyone else had the information about the number of people who had taken leave of absence or, for one reason or another, had not been at work and decided to take the retirement package when it became available and before things changed.

The issue of agency staff arises time and again. It can be addressed through a successful conclusion by the Department of Public Expenditure and Reform, supported by my Department, of a new Croke Park agreement.

I am pleased to give positive news about another initiative that will improve the situation. The Department of Public Expenditure and Reform has agreed to a proposal from my Department that will encourage newly qualified nurses to stay in Ireland and be available to give care to our citizens. This will result in up to 1,000 graduates being recruited over the next two years. The recruitment will commence as early as possible, and possibly in January 2013. Graduate nurses and midwives will be able to gain valuable work experience after graduation, benefiting from mentoring and skills development. Their pay rate will be 80% of the starting pay for a staff nurse. With shift pay and so on, this is estimated to come to €25,000 or €26,000 per annum. It is estimated that the scheme could result in net savings of €10 million in 2013 as these additional nursing resources will enable the use of agency staffing and overtime working to be much reduced.

This is a good news story, creating 1,000 extra jobs over the next two years and giving much-needed experience to nurses who might have been considering leaving the country next year. They can now give consideration to staying here and working in our health service to gain further experience.

For Deputy Ó Caoláin to describe today's Supplementary Estimate as bizarre is astonishing. Health has, more times than not, needed a Supplementary Estimate. To find it bizarre is to indulge in a little hyperbole.

The further staff reductions the Deputy alluded to present a serious challenge. We acknowledge that. We have to seek real change in the new Croke Park agreement to accommodate this reduction in staff. It is about changing the model of care, consultants not doing what GPs should be doing, GPs not doing what nurses should be doing and nurses not doing what health care assistants and others should be doing. That requires flexibility under the new Croke Park arrangements which we seek to put in place.

Deputy Seamus Healy talked about many issues that have nothing to do with the Estimates. They relate to next year and I will answer them at that time. I would be grateful if the Deputy would give me details of the lady who has had her home help hours reduced and which the Deputy feels is inappropriate. If he does that, I will look into the matter. There is supposed to be an appeals process. I have asked that it be put in place and that appeals be dealt with by a senior manager in the area and not by other staff. I will look into the matter if the Deputy is good enough to give me the details of it.

Deputy Healy asked for more detail about the PA Consulting report. I am happy to give him that. The key findings of the PA consultancy report were not different from several others, or from the Ogden report. The report says:

The HSE's current budget difficulties are a consequence of systemic failings in financial management over a number of years. Monitoring and evaluation of HSE performance by the Departments of Health and Public Expenditure and Reform is not supported by the financial management and reporting processes in place. The existing governance and controls framework lack clarity. The systems and processes in place do not deliver an integrated financial performance framework. Limited financial management capability exists among the staff and the system.

The report recommended that we gain control of HSE spending and re-establish credibility in its financial and operational management practices. We have done that by putting in place six senior people with long experience in finance and accountancy.

The report recommended the development of a revised budget process for 2013 based on activity based budgeting principles. If I begin to deal with that recommendation, we will have to discuss next year's Estimates, and I do not propose to do that. I ask Deputies to accept that this year's Estimates will be very different.

The report proposed that we commence targeting intervention in poorly performing hospitals, which we have done. That is why the issue the Chairman raised is being dealt with in the way it is. It will be based on last year's outturn and not the budget. The budgets given to hospitals over recent years have not been realistic. We will start from a hospital's outturn and reduce from that point.

The report recommends a revised financial control and governance framework, and a skills and capability analysis of existing finance staff, which is ongoing. It says performance management is essential to drive change, and the establishment of a finance improvement programme will put the necessary infrastructure in place to support successful project delivery. That is being put in place.

For the first time, we have a report that tells us not what the problem is but what to do about it, and we are doing it. I have confidence for next year. It will be very difficult. Some of the new things that have to be done will be contingent on a new Croke Park agreement.

Deputy Robert Dowds asked whether all the home help hours will be restored to all the people who lost them. Obviously, that is not going to be the case. To answer Deputy Dowds, and also Deputy Ó Caoláin's question, the home help and home care budget with which we started 2012 is being restored for 2013. What does that mean? We spend €320 million providing home help to 50,000 clients and home care packages to up to 15,700 clients. That is a large sum of money. Not only will we seek to protect it but we will see how to get better efficiency out of it in providing care to people to allow them to stay at home for as long as is humanly possible.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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With regard to that amount and the €234 million Supplementary Estimate with which we are dealing and which relates to the medical card and community drugs services, the Minister said there would be further restrictions on medical card eligibility. Can he clarify what he meant by that statement?

James Reilly (Dublin North, Fine Gael)
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I can answer that straight away. That is for next year. It is not for this Estimate.

Jerry Buttimer (Cork South Central, Fine Gael)
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We are dealing with the Supplementary Estimate, Deputy Ó Caoláin.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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We are dealing with €234 million in relation to the reimbursement unit. That is the issue. The Minister said this last week in the context of this meeting. The committee deserves at least an explanation of the Minister's remarks, which are in current discussion among the public without any clarification. Will the Minister clarify what level of restoration of home help hours he envisages?

Jerry Buttimer (Cork South Central, Fine Gael)
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We are dealing with the Supplementary Estimates; this is not Question Time.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I well understand that but the Minister has indicated----

Jerry Buttimer (Cork South Central, Fine Gael)
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A division has been called in the House.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Will the Minister take the time to explain the position?

James Reilly (Dublin North, Fine Gael)
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I will answer the Deputy's questions quickly. The first question about medical card changes relates to next year and they will be in the service plan. They have nothing to do with this Supplementary Estimate.

I answered the second question about home help hours as clearly as possible. The budget will be the same next year as it was at the beginning of this year and, therefore, the budget will be fully restored for 2013.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Will that equate to the restoration of hours?

Jerry Buttimer (Cork South Central, Fine Gael)
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The Minister, without interruption.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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He is purposely unclear.

Jerry Buttimer (Cork South Central, Fine Gael)
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The Deputy had his opportunity. We have a division in the Dáil. I propose that we adopt the Supplementary Estimate and attend the House.

James Reilly (Dublin North, Fine Gael)
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The greater deficit in the west is due to the deficits in Galway and Limerick hospitals, some of which they have carried for some time. No other Department has taken as much money out as we have.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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That is hardly a boast.

James Reilly (Dublin North, Fine Gael)
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No Department, other than possibly the Department of the Environment, Community and Local Government, has dropped as many staff as we have or completed as much reform as we have in terms of the special delivery unit, a reduction of 25% in trolley numbers and a 92% reduction in those waiting 12 months or longer for an appointment, an 86% reduction in those waiting nine months or longer, a 36% reduction in the numbers waiting three months or longer, and a 9% reduction overall in waiting lists, with a reduction of 30% in the number of children who have to wait 20 weeks more.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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And more cuts in medical card eligibility criteria.

James Reilly (Dublin North, Fine Gael)
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If the Deputy keeps focusing on inputs, the number of doctors and nurses and on money, he will get nowhere because that was what was done for the previous ten years. We are focusing on outcomes for patients, in particular, the number treated and how quickly, and that is what will give us the health service we all want: one in which we can feel safe and of which those who work in it can feel proud.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank the Minister, his officials and the select sub-committee members for their work. I wish everyone a happy Christmas.