Oireachtas Joint and Select Committees
Thursday, 12 December 2013
Committee on Health and Children: Select Sub-Committee on Health
Estimates for Public Services 2013
Vote 39 - Health Service Executive (Supplementary)
We have a quorum so we will begin. We are dealing with the Supplementary Estimate for Vote 39 - Health Service Executive. I remind committee members that this is a Supplementary Estimate, so we are not dealing the whole Estimate. I welcome the Minister for Health and his team of officials, Bairbre Nic Aongusa, Fiona Prendergast, Tom Byrne and Colum Maddox. I call on the Minister to make his opening remarks.
I thank the select committee for giving me the opportunity to bring this Supplementary Estimate for Vote 39 before it. The total additional funding being sought for the Health Service Executive is €219 million. However, I am allocating savings of €20 million which have been identified within my Department’s Vote towards the HSE requirement; thus, the net cost to the Exchequer is €199 million. This represents less than 1.6% of the health sector budget for 2013. This is a considerable achievement for the health services in view of the very challenging environment in which they have operated this year, given the increasing demand due to demographic pressures, the need to ensure patient safety is a priority at all times and considering the very challenging targets for service delivery in areas such as waiting times for inpatients, outpatients and at emergency departments.
From the outset in 2013, the Department of Health and the HSE identified certain risks to the achievement of the very demanding savings targets in the 2013 service plan. Some of these risks have materialised, such as the delay in finalising and implementing the Haddington Road agreement, the decision by the Government to defer the introduction of charging for private patients occupying public hospital beds, and the delay in the introduction of regulations under the FEMPI Act to reduce fees paid to doctors and pharmacists, which could not be introduced until the Haddington Road agreement was finalised. However, as a result of prudent financial management and rigorous cost containment, these risks have been mitigated and offset by savings in other areas, and many of the 2013 targets are expected to be achieved in 2014. In addition, while there has been a shortfall in the savings targets, it is important to note that significant savings were achieved, notably in the PCRS, with considerable reductions achieved in the cost of drugs and medicines.
I will outline in a few minutes the details of this Estimate and the other measures being taken to address this year’s deficit, but, first, I wish briefly to bring to the committee’s attention the significant improvements that have been achieved in the health status of our country’s citizens, and also the reforms which are being initiated to strengthen financial management within the HSE.
Next week, my Department will publish "Health in Ireland: Key Trends", which aims to provide an overview of health status and the health services during the past ten years. It shows real improvements in outcomes, in particular, improvements in mortality and increased life expectancy. Mortality rates from circulatory system diseases and cancers, for example, have declined by 35% and 11% respectively since 2003. Better health care continues to contribute significantly to better outcomes and gains in life expectancy. Over the past decade, Ireland has achieved a rapid and unprecedented improvement in life expectancy. It has increased by a full four years since the year 2000 and has been consistently higher than the EU average throughout the last decade. However, we still face considerable challenges in the coming years. The population continues to grow and to age. Each year, an additional 20,000 people are added to the total of those aged over 65 years. I am sure everyone will agree that is a good thing. To meet these demands in an environment of reduced resources, we must change the way we manage and deliver our services. The data on acute hospitals shows one of the ways in which we are achieving this in that 60% of hospital admissions are now for day care treatment, compared with 54% in 2006. This is an example of care which provides both better and less invasive treatment while at the same time increasing volume and efficiency.
The strategic framework for reform of the health services, known as Future Health, identified as one of the key challenges the need for an integrated financial management system. My Department is working with the HSE to ensure the development and roll-out of a comprehensive financial management system as a matter of priority. As part of the process of further strengthening the financial management of the HSE, independent expertise was engaged to evaluate the financial performance management system and a finance reform board has been established, chaired by the director general, including senior HSE management and representatives from my Department and the Department of Public Expenditure and Reform.
Proposals on the development and roll-out of an integrated financial management system have been endorsed by the board, with my full support and approval, and the HSE is now finalising a business case for submission to the Department of Public Expenditure and Reform.
I will now set out the items making up this year’s Supplementary Estimate. The sector faced very significant financial challenges in 2013. The budget targets set for the HSE this year were extremely demanding. The deferral of the introduction of legislation to charge private patients in public beds until 1 January 2014 means that the targeted savings of €60 million will not be achieved in 2013. The Health (Amendment) Act 2013 was enacted on 24 July 2013, but the Government decided to implement the private inpatient charges from 1 January 2014 to ensure that the additional revenue is realised on a phased basis. Therefore, no savings will accrue in 2013 as a result of this legislation.
My Department and the HSE are committed to maximising the savings under the Haddington Road agreement. The main drivers for savings under the agreement are additional hours commitment for staff which will lead to a reduction in overtime and agency staff; reductions in rates for overtime; pay reductions for all staff earning in excess of €65,000; and the nurse graduate scheme and the support staff intern scheme. Not all of these measures could be fully implemented from 1 July 2013. For example, significant savings are to be achieved through the graduate nurse and midwife initiative and the support staff intern scheme, but there is a lead-in time before such savings can be realised, given the recruitment process and issues such as Garda vetting.
In addition, considerable savings will be made through the effective harnessing of the additional working hours to which staff are committed. The harnessing of these additional working hours requires the reorganisation of services and the redesigning of rosters, and it is taking some time to effect these changes. Planned savings through the reduction in numbers employed are also somewhat less than targeted in 2013, with a very low rate of retirements in 2013. This is probably due to the fact that a higher than normal number of staff retired in 2012 as staff exited before the end of February 2012 to avail of the grace period. Further reductions in numbers were targeted under an incentivised career break scheme. Some 360 staff have been released from a total of 2,700 applications. A large proportion of the applicants were front-line health professionals, such as nurses and therapists, and only limited numbers of these staff could be released due to the necessity to ensure that front-line services continued to be provided.
The 2013 budget set a target of €323 million for reduction in expenditure on community schemes this year. In addition, the HSE sought a further €60 million in savings. This ambitious target has fallen short due to the timing of the FEMPI regulations and a shortfall in other savings targets. However, it must be acknowledged that the PCRS did achieve considerable savings on the schemes, for which it should be commended.
As regards FEMPI, the legislation originally planned for April, was delayed due to delays in achieving agreement on the Haddington Road agreement. In July, I announced reductions in fees payable to GPs, pharmacists, ophthalmologists and psychiatrists which will save €70 million in a full year. However, although there will be a shortfall of some €37 million in 2013, the balance will come through in 2014. The 2013 national service plan set a target of €30 million savings from the local schemes, that is, savings related to the purchase and use of goods in local integrated service areas for supply to eligible persons. However, the nature of expenditure and the low level of potentially discretionary aids and appliances have limited the potential for savings.
The HSE is now reviewing the management and provision of aids and appliances through a dedicated project which will manage delivery within resources and maximise efficiencies.
The Government is fully committed to reducing the cost of drugs and medicines for patients and consumers, as set out in the programme for Government. Changes in recent years have resulted in reductions in the prices of thousands of medicines, with price reductions of the order of 30% per item reimbursed being achieved between 2009 and 2013. The average cost per item reimbursed is now running at 2001-2002 levels.
I can assure the committee that the 2012 pricing agreements with the Irish Pharmaceutical Healthcare Association, IPHA, which represents the research-based pharmaceutical sector, and with the Association of Pharmaceutical Manufacturers in Ireland, APMI, representing the generic sector, are delivering savings as planned. The combined gross savings from the IPHA and APMI deals will be in excess of €120 million in 2013.
Furthermore, the Health (Pricing and Supply of Medical Goods) Act 2013, which came into operation on 24 June, provides for the first time a radical change in the way prices are set and will lead to benefits for patients and the State finances. The legislation will promote price competition among suppliers and ensure that lower prices are paid for these medicines, resulting in savings for taxpayers and patients.
A deficit of approximately €15 million is projected in legal costs associated with children and family services. There is considerable pressure in the area of legal fees in children and family services. These pressures arise in the context of the legal considerations and oversight of the HSE when exercising its powers to intervene in families in which children are neglected or abused. In the run-up to the creation of the new Child and Family Agency, a rigorous review of legal expenditure has been undertaken with the aim of achieving further significant savings and greater efficiencies in the provision of all legal services. Revised procedures have been introduced regarding access to external legal services and good practice on court procedures. However, the area of legal fees in child and family services will continue to present significant financial pressures to be managed by the board and CEO of the new agency in the future.
A further €37 million is required to meet estimated claims due before year end by the State Claims Agency. The State Claims Agency estimates are based on actuarial modelling provided by an independent firm of actuaries. The original estimate was on the basis that the High Court began to agree to settlements in respect of catastrophic injuries on a periodic payment basis in anticipation of proposed legislation, which is currently being drafted by the Department of Justice and Equality. Periodic payment orders, PPO, allow for catastrophic injury cases to be settled on the basis of an initial lump sum to deal with up-front costs, such as general damages, home alterations, specialist equipment, etc., and an annual payment thereafter to meet ongoing care costs. However, in the absence of this legislation, the High Court in a number of cases has converted the settlements back to traditional lump-sum settlements where they had previously settled on an interim basis. It is not possible for the State Claims Agency to predict the approach of individual High Court judges when faced with an application from the agency to rule on a PPO basis. Some judges are amenable to award a PPO while other judges will not award a PPO in the absence of legislation.
On procurement, significant price-based savings have been realised, with any shortfall in 2013 targets expected to deliver in 2014. Approximately €18 million to €20 million of the 2013 procurement target is expected to be delivered in 2013. Significant work is also under way within procurement to provide a more robust basis for assessment of delivery against procurement targets. This work will further drive the efficiency of the procurement process through 2014.
As I set out at the beginning of my address, my Department has identified savings of €20 million. These savings arise within my Department's directly funded agencies and include savings on administration, legal costs and hepatitis C compensation. There is also a saving of €3.5 million in my Department's capital Vote.
Given the extent of challenges faced by the executive in 2013, the extra funding being requested through this Supplementary Estimate is reasonable. The executive has been through a challenging year and faces another tough year ahead. My intention in introducing this Supplementary Estimate is to reduce the incoming deficit for the HSE as it faces into a difficult year in 2014. In conclusion, I seek the committee's approval for the Supplementary Estimate for Vote 39.
I remind members that we are only considering the Supplementary Estimate and that while members may discuss issues relevant to the individual subheads, they may not recommend an increase or decrease in the Supplementary Estimate and there can be no votes at the committee.
I thank the Minister for outlining the reasons he is before us today with regard to a Supplementary Estimate for 2013. I suppose it is no surprise that we are where we are in terms of a Supplementary Estimate. Any person who looked at the Estimate that was presented last year would have stated there and then that a Supplementary Estimate would be required. As the year drifted on that became increasingly evident, even though there were stark denials from time to time and a certain amount of head-in-the-sand syndrome on the issue.
Without taking up too much of the committee's time, because I have only five minutes for an opening statement, we are talking about a net Supplementary Estimate of €199 million. However, when one looks down through the figures, they include, for example, an underspend in pension lump sum payments of €82 million. What is the reason that came about? Is it for administrative reasons or is it due to an intentional delay? How was there an underspend in lump sum payments of €82 million in view of the fact that it would have been a fairly straightforward calculation to work out the pension lump sum payments to made?
The other issue is the underspend on capital expenditure. It is almost cited here as an achievement. In view of the capital programme as outlined over the past number of years, this would suggest that there has been a decrease in capital projects, as opposed to savings, because of greater efficiencies and the reduction in cost of capital programmes. I seek clarity on whether the saving is due to delayed projects rather than efficiencies in the building projects.
The difficulty is that every year the Minister speaks about the HSE's outstanding achievements over the years. In fact, half of his speech consists of this. He mentioned the HSE's Health in Ireland: Key Trends report, the fact that mortality rates from circulatory system diseases and cancers have declined by 35% and 11%, respectively, since 2003, and the rapid increase in life expectancy. There have been many other major accomplishments in health care in this country and the Minister has accepted that over some time. The difficulty is that while we expect the HSE to be put out of its misery some time next year - it must be taken out and put down - the question that arises is how much cost has been involved in the internal restructuring of the HSE to provide for its eradication. The Minister stated that it must be got rid of because it has been an eternal failure. I note that in his last few speeches the Minister has become almost a hostage to the HSE. He is beginning to praise it. I wonder has some form of Stockholm syndrome developed between the Minister and the HSE. What is the reasoning behind it? Is the Minister merely being nice to the HSE before he puts it down? It is a key issue, because the question that must be asked is-----
The question is this: what are the hidden costs of restructuring? We never seem to get any definitive answers to that question. Are there initial costs in terms of the Minister's restructuring programme? I refer not to the roll-out of universal health insurance and all the other areas, but to the internal restructuring under which the HSE is being brought into the Department, with the Minister sitting at the top of the new organisation with full accountability to the Dáil, as stated in the programme for Government. The Minister never seems to be able to explain whether this will be cost-neutral, whether there will be a cost benefit or whether there has been a cost. That is something we need to hear when he speaks of savings and efficiencies in the Estimates.
We have been warned about speaking about next year's Estimate and the upcoming service plan but the bottom line is that when the Minister kicks decisions such as that on under-expenditure pertaining to pension lump sum payments and capital down the road to next year, he starting off with a deficit. The lump sum pension payments will have to be paid next year. There were factored into the accounts for this year. Capital under-expenditure, unless it arises from actual savings achieved because of new tendering processes or otherwise, means the Minister is starting off with a deficit in the capital area also.
The Minister stated yesterday or the day before in Brussels that he did not believe this Supplementary Estimate would have any impact next year. The bottom line, however, is that, even on a cursory look, I contend it will have an impact of minus €82 million and minus €50 million, which amount to minus €132 million before starting at all next year. Perhaps the Minister will clarify these issues.
I blame the Minister for many matters but I certainly cannot blame him entirely for the recruitment of specialist nurses from abroad. We spoke about this before and warnings were issued. Retirement schemes were put in place and we lost key front-line personnel. That the HSE and Department must start trawling the world to find nurses of specialist grades to replace those who have actually left this country seems to point to a failure in planning and oversight in the longer term. I am not holding the Minister responsible in this regard but believe it is a very serious shortcoming if we must try to recruit nurses internationally to replace those who have left the country in the past two or three years. It simply beggars belief.
What we are being presented with is a request to provide to the HSE €219 million, €20 million of which the Minister is providing from Vote 38. Some €199 million is now sought to address deficits to bring the HSE to the end of this month. Bearing in mind the Minister's opening remark that this is a considerable achievement given that the figure is less than 1.6% of the health sector budget for 2013, it is not a matter of congratulating anybody in these circumstances. I have great sympathy for front-line staff and those entrusted with oversight and management across the HSE. They most certainly have had a very difficult task. I sympathise with the remark because the contraction in budgetary provision over recent years has made the task of the staff infinitely more difficult. I will not be opposing the request, nor did I oppose the €360 million sought this time last year to bring the HSE to the end of 2012. The wonder is that the amount is not even more. One cannot demonstrate on the balance sheet the real cost. This is only in terms of euro and cent. Despite the Minister's talk about demographic pressures, the prioritisation at all times of patient safety and challenging service delivery targets in respect of phenomena such as waiting times, and despite his natural focus on defending what he regards as his and his colleagues' achievements over 2013 and 2012, he ought to be equally aware that the position is far from what it ought to be. An inordinate number of people are waiting to get onto a waiting list to be seen for the first time. The number is in the tens of thousands, which is very distressing for people. When people enter the system, the experience is generally good. However, getting into the system is a huge part of the difficulty that is raised frequently with elected representatives.
I, too, I am interested in the detail on the Supplementary Estimate calculation. Deputy Kelleher referred to the pension lump sum payments. There is under-expenditure of €82 million. I, too, question this. With regard to the under-expenditure in the capital area, what capital works have not been undertaken?
I would like the Minister to elaborate on the services deficit of €111 million. The figure pertaining to the primary care reimbursement schemes is €104 million, yet, in the course of the Minister's contribution, he spoke of savings having been made. An additional €104 million is required to bring the schemes to the end of this month. An explanation on this is required.
Regarding the new integrated financial management system that the Minister referred to in his introductory remarks, and his reference to changing the financial management system, there is relevant legislation to be considered, the Health Service Executive (financial matters) Bill, which has not yet been published. I questioned the Taoiseach on this yesterday. It is to disestablish the HSE Vote and establish a statutory financial governance framework for the HSE. Can the Minister elaborate on that? What will be the impact of the presentation of that legislation and its processing in regard to the democratic engagement at this committee? With regard to disestablishment of the HSE Vote, we are dealing with the HSE Vote now in supplementary terms. Will the Minister advise us on the intent of the legislation and its impact on the process in which we are currently engaged?
On the deferral of the introduction of the charge for private patients using public beds, which is coming into effect as of 1 January, the targeted savings amounting to €60 million in 2013 were not realised. What is the savings target to be realised in 2014? I recall a figure of €30 million having been mentioned. Can the Minister clarify what is expected to be realised? Why would he put the brake on that? I can understand the impact on the private health insurance sector but no mistake should be made in acknowledging that if the commitment exists to move and motor this process, the slow-down is not excusable. It needs to be grappled with as part of the move towards universal entitlement to health care on the basis of need, and need alone.
The Minister talks about the Haddington Road agreement and the main drivers of savings under the agreement, as he sees it. He refers to the commitment of additional hours by staff that will lead to a reduction in overtime and agency staff. Can the Minister indicate what reductions in agency staff have been achieved in the course of 2013? What prospect is there for any genuine reduction in agency staff - primarily nursing staff but also administrative staff - when the Minister continues to operate under the embargo placed on recruitment? Will this matter be addressed in 2014, and will we see a move from agency staff to properly employed, full-time, permanent and pensionable nursing staff and other operators within the health services?
Last year, there was a supplementary estimate in the region of €300 million. This year, it amounts to €199 million. This immediately raises the question as to the adequacy of the initial budgets, whether these budgets were deliberately understated and whether the service was deliberately under-funded. Although we cannot speak about next year, we have very serious concerns about the 2014 budget.
We still have not seen the national service plan and it appears we will not see it until the new year. That is a very serious concern. The picture being painted here confirms that it is simply not possible to take over €3 billion out of the health budget and provide the same level of service while staying within the budgets that are set. There is no doubt that there are huge pressures on staff across the system from front-line staff to clerical staff and non-nursing staff to management.
Over the past several days we were informed that the HSE had dispensed with 804 front-line nursing staff. This puts pressure on front-line services. We are now looking for specialist nurses overseas, who will be coming at a premium. Is it possible to get the total cost of an agency nurse and junior doctor? I have been informed that the cost of an agency junior doctor is three times that of a normally appointed one. Will the Minister clarify this?
Has the extra allocation of €25 million for the development of mental health services and the recruitment of 440 extra specialists in this area been spent, or is it included in the savings of €20 million as not spent, as it was in 2012?
I thank the Minister and his officials for attending today.
On the projected €15 million in legal costs for child care services, is there a link with the paper published by the Department, Future Health, and the integrated financial management system? Is this another case of money going into a black hole? What is happening in terms of where budgets are being allocated? Community beds were closed in a community hospital because of legal bills in child care services. That is how these child care costs are reflected in people's lives. It is a reflection of how this pans out for us as public representatives and for constituents.
Long before the Minister’s tenure, there was a difficulty in the Department of Health and the HSE with moneys going awry, being sucked into acute centres and away from community-based services. How well has the integrated financial system come along? How are we ensuring that moneys allocated to mental health or child care services are spent on them? Has the Minister had any discussions with the Minister for Children and Youth Affairs or the Minister for Justice and Equality on legal costs? I understand the legal services Bill has still not been published. Fifteen million euro is quite a substantial amount of money.
Last year, due to the failure of consultants to complete forms for health insurance companies, there was more than €14 million outstanding for the HSE. How much of this money has been collected? We were told that those who failed to complete the forms would have their names published on a departmental website. Has that been done?
There is the famous saying that your health is your wealth. The Minister said the Department would be publishing the Health in Ireland: Key Trends report next week, which will provide an overview of health status and health services over the past ten years. He said it showed a real improvement in mortality and increased life expectancy. Better health care has increased life expectancy by four years since 2006, ahead of the EU average. Cancer rates are down 11% and diseases are down 35%. One cannot put a price on this and I congratulate the Minister on it.
He stated that an additional 20,000 people had been added to the number of those over 65. How much will this cost in next year’s budget?
In Wicklow some health services were cut back to make up for a budgetary shortfall. Was there an error in calculating the amount of funding the Haddington Road agreement would bring in which resulted in this shortfall?
I have had representations from some pharmacists about the cost of registering with the Pharmaceutical Society of Ireland. It comes to €2,250, while in Britain and Northern Ireland it is only €200. It was put to me that this is adding to the cost of medicines. Can this be reduced? I understand the society has €11 million in reserve. What is the purpose of this reserve and can it be used to fund aspects of the HSE?
With regard to the PCRS and the €104 million, the Minister produced the list of primary care centres some time ago. Some worked out okay but others did not. Is there any plan to revisit that list?
Maybe I am missing something, but when I look at the various subheads, it is €11 million for each area.
We will be going through the heads individually in a minute. I remind members that this is not a quarterly meeting, so the Minister does not have to come back and answer all the questions. We will take it subhead by subhead, unless the Minister wants to reply on specific points now.
The pension payment reduction was mentioned by Deputy Kelleher. Mr. Tom Byrne will be very happy to address that. The underspend in capital was also mentioned by Deputy Kelleher and Ms Bairbre Ni Aonghusa will address that. Can I take the opportunity to thank both the members of the Department and the HSE for being here?
The issue of longevity was raised by a number of people. I would be the first person to put my hand up and say that is not all down to health. They say about 50% of that is down to social conditions - living conditions. Nonetheless, health has a very large influence on it.
We were talking about praising the HSE. I am praising the people who work at the top of it who have brought in new financial reforms, put in a reformed board and got much greater control and command over the finances, which is something we did not have in the past to the extent that we should have. This issue has been raised by a number of people in terms of being able to follow money and where it goes.
The Deputy asked about the costs involved in restructuring. I believe it is saving rather than costing money. Of course, there is always some initial cost. The Deputy also mentioned the effect of the Supplementary Estimate on next year. The Supplementary Estimate cannot be carried to the next year so moneys and debts that crystallise during this year are dealt with this year. If any money is left over, we would have to hand it back to the Exchequer. In respect of the key retirements at specialist grades and the fact that we must look abroad for key specialist grades of nursing, that is not down to any directive from us per se but rather a public service agreement that allowed people a grace period to February to go if they felt it was more beneficial to them. We had no hand in it and could not direct who could stay or go. It was down to the individual's choice. In respect of the incentivised career break scheme, it is very much in our gift to decide who goes and who stays and that is why out of the 2,700 who applied, so few have been let go because they were front-line staff who were key to our service delivery requirements and we could not let them go.
I believe this Supplementary Estimate, which is less than last year's Supplementary Estimate despite the hugely challenging year we have had, compares very favourably with the last Supplementary Estimate of the previous Administration, which was €595 million. Deputy Ó Caoláin asked about the health service being far from what it must be. We all accept that it is far from what it must be and we aspire to make it a much better and fairer service. However, I would like to put on the record of this committee that it is far from what it used to be. It is an awful lot better. It was only January two years ago when we had 569 people on trolleys. Since we came into Government, we have seen a reduction of 34% in the number of people who must endure long trolley waits. I will return to that issue.
Deputy Ó Caoláin spoke about the savings relating to the charge for private patients using public beds. It is €30 million. That is what we hope to realise next year with the new charge regime. I have very strong feelings on this and have it made very clear to the VHI and other insurers that they have not done anything remotely like what they should be doing in terms of controlling private health care costs in this country. The audit was very weak in respect of ensuring that things that were charged for were actually done. There was no clinical audit, which still astonishes me. In other words, there was nobody to challenge the doctor as to when the tests were done in the first place. There is no point in sending a surgeon to challenge a cardiologist. You need a cardiologist to challenge a cardiologist. In respect of benchmarking, the question arises as to why we are still paying several hundred euro for procedures that used to take two hours but now only take 20 minutes. Benchmarking and auditing in the private hospital sector are issues.
Deputy Ó Caoláin mentioned savings relating to agency staff. I will ask Mr. Byrne to address that. Deputy Healy spoke about the budget being deliberately under-funded. This is absolutely not the case but one must understand that health is unique in this regard. It is demand-led and unpredictable. An area like social protection gets the benefit straight away if there is a drop in unemployment but that is not the case in health. We have an ageing population and it is great that we are all living longer but as we live longer, our demands on the health service increase. Consequently, we have seen an increase in activity in the region of something like 2% this year. We sought €190 million for a 1% increase and got €90 million. It turns out to be 2%. We are not in the position that we can decline to give service to people who are acutely ill. People who turn up have to be treated and treated quickly and we are seeking to improve that from the point of view of the initiatives we took around the waiting times. In the first year, over 95% of people were treated within the year. Last year, over 95% of people were treated within nine months. This year, we aim to do it in eight months. On top of that, one must note the astonishing fact that no previous Government ever bothered to count the outpatient waiting list or quantify what it was. We have done that. It was 386,000. As I said before, the real disgrace is not that number but the fact that so many people waited longer than four years. We have already seen a 75% reduction in that since March 2013 and that has declined further since I received the latest figures although I do not have them. We want everyone seen or treated within a year having been referred by their GP. That is an enormous challenge given the constraints we face with a 20% reduction in budget and a 10% reduction in staff yet the men and women of our health service have not just maintained a safe service, they have made it better, as I have outlined. I want to put on record my gratitude and thanks to them for the hard work and the great work they do on a daily basis. What we are trying to do is create a system that allows them to do that rather than frustrating them in trying to do that.
Deputy Healy also spoke about how you cannot maintain a service having taken €3 billion out of it. I think we have proved that you can and can improve as well. As for taking any more out-----
The facts speak for themselves. Deputy Healy can have his views but if he looks at the facts and statistics that are verified not just by me but by the Irish Nurses and Midwives Organisation in respect of the quality counts and the ESRI in respect of our public hospitals and what they have achieved in the past few-----
I am interested in real outcomes for patients. It is very hard when someone over on the left here wants to live in cloud cuckoo land. I will leave Deputy Healy to his prism, whatever that might be.
I do not have the actual cost of agency nurses and doctors. If we do not have it here, I will certainly undertake to come back to the Deputy because that is a very reasonable question to ask.
Deputy Neville asked about the €35 million for mental health and recruitment. Recruitment is ongoing. The €20 million to which he alluded is actually Department of Health money rather than HSE money. There are some time-related savings because some of this staff, not just nurses but also psychologists and other therapists we need, are quite hard to recruit. There is quite a long lead-in time between recruitment-----
In respect of the point made by Deputies Kelleher and Neville, is it not opportune to have a recruitment campaign for nurses to keep them here as the Minister does with the non-consultant hospital doctors? Surely the Minister would agree with that?
We are doing that through the postgraduate training programme. What we are looking at here and what the Deputies were alluding to are specialist grades of nurses. If a paediatric intensive care unit nurse decides to leave the service, we cannot just replace them with a graduate nurse. We have to get a nurse who is trained in that area.
That is the difficulty we face, which is why I think they are seeking to recruit in the region of 80 nurses. I want to investigate that further. I probably said that the Department and the HSE are not overlooking the opportunity to help people come into the service now and to move people who might surplus in one area to another to allow younger nurses to come into the system.
I agree 100%. That is certainly what we are trying to do in respect of the non-consultant hospital doctors.
I will have Brian McGrath's interim report tomorrow. The report will contain interim recommendations and timelines for their implementation. I will make an announcement in this regard tomorrow because it is important that we keep our doctors and nurses here. They are sought after the world over and when they leave this country they work in the finest institutions in the world and they rise to the top of them. We are not deluding ourselves when we say we have some of the brightest and the best in the world. That is why we should have the best health service but the reason we do not have the health service we should have is because it was allowed to evolve in a chaotic fashion. We are addressing that in a steady, considered and methodical manner.
Deputy Conway asked about the integrated approach and a black hole. She may have been alluding to the new directorates, which will give much greater clarity on the flow of money into different areas. Mr. Tom Byrne can address that issue in more detail.
The Minister for Justice and Equality will be introducing new legislation on legal costs at the beginning of next year. I have had discussions with him and the Minister for Children and Youth Affairs on the issue.
Has the Minister discussed with the HSE the practice of going to the steps of the court before deciding suddenly to compromise and agree a settlement? In the last couple of months we have seen a number of high profile cases in which people were pushed along because the HSE was reluctant to agree a settlement. This practice costs a huge amount of money.
That practice can be considered more historical but the outcomes are only now being realised. Families should not have to endure that sort of process to get the services they need for their children. The State Claims Agency has taken over many of the cases, which is possibly why we are seeing settlements. Furthermore, the legislation has yet to come through on periodic payments, which would make judges feel comfortable about making that type of award. It is not appropriate that a sum of several million euro is awarded straight away when the needs of the person concerned may evolve over a period of time. The principle of periodic payments will address both the initial needs and make funds available for the future.
Mr. Tom Byrne will deal with the issue of private health insurance forms. He has done a considerable amount of work on the issue of consultants not signing forms. I do not think the problem is nearly as big as it used to be. The bigger problem now is getting the insurers to pay on time. They are delaying.
Deputy Peter Fitzpatrick asked about the costs associated with an aging population. Ms Bairbre Nic Aongusa and Mr. Tom Byrne would like to address that issue. Mr. Tom Byrne can also deal with Deputy Timmins's question on the Haddington Road agreement. In regard to pharmacy registration costs and the reserve of €11 million, I am unaware of the issue and will have to find out more about it. However, I advise the Deputy that Denmark, with a population of 5.6 million, has 350 pharmacy outlets. Ireland, with a population of 4.6 million, has 1,750 pharmacy outlets. An investigation is needed into margins, etc.
In regard to the PCRS and primary care centres, I am happy to report that since the Government took office we have opened an average of one new primary care centre per month. We are exploring more ways of doing this, including PPPs, direct bills and leasing arrangements. The need to get the GPs on board is a limiting factor because there is no point investing in an expensive building if they are going to sit outside and ask us how much we are going to pay them to enter it. We need to address all those areas. The negotiation of a new GP contract early next year will expedite this process and give more certainty to GPs who are concerned that there has not been clear engagement to date. The Minister of State at the Department of Health, Deputy White, and I are committed to engaging on this in the first quarter of 2014.
In regard to Deputy Neville's comments on mental health, I assure him that the Minister of State at the Department of Health, Deputy Kathleen Lynch, is a strong voice for ensuring the moneys are spent in the right areas.
Mr. Tom Byrne:
In regard to the figure of €82 million for pensions, under the employment control framework the HSE estimated that 3,500 people were going to retire over the year. Unfortunately, this did not happen. The number of retirements fell to fewer than 100 per month and, as those who retired had shorter periods of service, it was not necessary to spend the amount provided. Similarly, as no notice period is required for retirement it becomes difficult to estimate when people will decide to retire. People can retire on pre-Haddington Road agreement rates until August 2014. The remaining funds allocated for pensions may be requested to be written back because people were not retiring.
In regard to the Haddington Road agreement and the decrease in agency payments, I do not have the exact figure but the monthly reviews of accounts indicate a decrease in agency hours. On foot of discussions with our colleagues in the Departments of Health and Public Expenditure and Reform, we have established a team comprising front line people under my colleague, Mr. Colum Maddox, who are experts in hospitals and rostering, along with a representative from the human resources department and each of the service areas. The team's sole function over the next several months will be to visit hospitals to review individual rosters to ensure we are getting the maximum from Haddington Road in a safe and secure manner.
With regard to the question on integrated financial services, I commenced this role six months ago. I brought in people with experience in this area and we are currently commencing the roll-out of the programme. Over the next 12 weeks we will be preparing our business case for submission. We intend to reduce the number of direct reporters in finance to a core team in order to deliver on our aims. We have 12 weeks to prepare an integrated plan which will incorporate the new role of CFO across the HSE.
With regard to the sensible question on debt collection and debt at risk, this is something I took on personally several months ago. As the Minister indicated, there has been a substantial fall-off. I began by specifically examining at risk income. At that stage income at risk with two of the health care providers amounted to €6 million. That figure is now down to €3,000 because we visited the hospitals and set up an internal team to address the issue. As the Minister noted, however, while the proportion of claims awaiting consultant action dropped from 36% to 29% by August 2013, and continues to drop because we are having the required impact internally in the HSE, the proportion of claims awaiting payment from insurers has increased from 33% to 37% and claims pending have increased from 18% to 21%. The reasons for this increase relate to issues that have arisen with health care providers. The HSE does not have a service level agreement with private insurers because they deal directly with clients. Hospitals have identified significant problems in that they do not have a direct point of contact with insurance companies.
Mr. Tom Byrne:
We have formed an internal team to deal with the health care providers. The issue is expanding.
I will go through individual points. The claims pending have increased from €40 million in December 2012 to €49.5 million in September 2013. This is a more up to date one. Submitted claims awaiting payment have increased from €57 million to €86 million. There is a significant lack of detail provided by insurers to hospitals on the reasons claims are pending and not paid. VHI delay in recognising new consultant appointees means hospital claims related to these consultants are delayed. Insurers are requesting more medical information on low-value claims, resulting in a delay in payment. Some of these claims are not routed through the patient account department, which causes problems. Claims have been returned because consultants used incorrect codes for procedures such as endoscopes and consultants have been notified but the hospitals have not. Insurers will not pay for an orthopaedic procedure unless there is an accompanying medical report and will also contact the patients to ensure it has been done.
We have noticed this slow down in payment back to us. I raise this specifically because of comments that the HSE is not chasing this cash. There is a relatively new request whereby health insurers are seeking patient validation before they will process a claim. Doctors in a certain hospital have told me they must take a photograph of a patient on a bed, even though they might treat that patient in a chair, because the health insurer will not deal with this.
I raised the question of outstanding amounts from health insurance companies. Mr. Byrne said he has noticed a slow down in payments back. We had the health insurance companies in here and they would say the exact opposite. I apologise for having had to leave the room earlier.
Mr. Tom Byrne:
Internally last month we have established a team of representatives of the hospital groups, chaired by me. My priority in the first six months was to ensure our surgeons were signing off on at-risk claims to get them in. The figures speak for themselves. There is a slow down in what is coming back to us. We are addressing that through the new legislation and this focus group to address these specific issue so we can come to an agreement to get prompt payment and not a slip in debtor days.
I put down a series of parliamentary questions over the last 12 months on consultants and their completion of forms and there seems to be a cohort of approximately seven to ten people who are not completing forms properly. I will not name names. I was told that repeat offenders would be chased. I know it has been changed, but it has been put to me that consultants did not have to pay PRSI on unearned income in the past but they do now. I wonder if that has something to do with it.
Mr. Tom Byrne:
No. First, a comment was made to the Minister that we should publish names. Legally we cannot do that. There was some unfortunate correspondence that I have visited hospitals and have had surgeons on arrival sign off claims for €500,000. Those at-risk claims have been dealt with and we have a very good relationship developed with our surgeons. We must take this in the context of the fact that a surgeon has a job to do. The surgeon responsible for a patient must sign off on everything for that claim, be it endoscopes or wards. That is being addressed. The issue is more about getting back the money due and having claims sent back for minor points. At August 2013, debtor days have increased from 46 to 60 days for claims awaiting payment and from 26 days to 34 days for pended claims. Claims awaiting consultant and other actions have dropped by €10 million.
Mr. Tom Byrne:
On the Haddington Road agreement and the initial €150 million we were targeted to despatch, there was no facility not to issue the €150 million across the whole health service at the time but on review and discussion with our colleagues in the Department it was felt appropriate that €50 million should be taken back centrally, which we did. The issues that arose regarding the disability sector where we had to issue that were taken back on a time-related basis while we do the review. It is still being held centrally. It was not a case of an error but that we were demanded to issue €150 million by the Haddington Road agreement. It was not appropriate at the time and we did the right thing by taking back €50 million to make it more fair. They were all withdrawn from the areas at that time.
Ms Baibre Nic Aongusa:
The reason for the underspend in the capital programme is that our capital programme includes several major capital projects which are all going to come to fruition at the same time and all of them are at the early stage in their lifecycles. These include the children's hospital, the Central Mental Hospital, the move of the National Maternity Hospital to St. Vincent's and the national plan for radiation oncology. For various reasons those big projects have not proceeded as quickly as expected and that gives rise to the money not being spent.
The procurement of design teams and contractors is taking longer than it used to because of the particular challenges in the industry at the time. For example in one capital project in the Department's Vote a number of companies went into liquidation and the contracts had to be re-tendered. Those are the challenges we face. When it became clear during the year that we would have a surplus the HSE has tendered for minor capital works and equipment which could be realistically completed by year end and we did a big push for an equipment replacement programme and a flexible scope replacement programme and expenditure in October and November was increased significantly. Despite that we had a surplus. It will not continue in other years because these large projects are expected to use up all the capital programme funding in future years.
Agency workers invariably want to be employed full-time in the health service. They would cost less if they were employed. In the context of the recruitment embargo, is there any intent to relieve that point of pressure and open up the potential to move people from agency employment into full-time employment under the aegis of the HSE? Has the Minister any idea, or would he inquire, as to the number of positions in the HSE that are being advertised under JobBridge?
It has everything to do with how we provide staff, not only front line staff but administrative. They all are paid from this budget. I am highlighting the fact that there is now what I regard as an abuse of JobBridge by the HSE to get cheap labour in these critical positions. That includes, as advertised, gaining experience and skills working in emergency departments, inpatient, outpatient and day-care settings, and various other departments including wards, radiology, laboratory, physiotherapy and administration. It is most important that we get an answer to that.
On subhead B3, this is an issue that is arising in all the regions but I will raise it in the context of HSE south of which I have a greater intimate knowledge. We have a difficulty where there are organisations, such as COPE Foundation and St. Joseph's Foundation in Charleville, which provide care and services to persons in the community and which at the same time are obligated to honour all the wage agreements, for which there is no provision ever made in terms of funding from the HSE through the Department for such wage increases. All that ever happens is the wage increase is taken from the services side. Every time a wage increase comes about, rather than the HSE making funding provision for it, the organisations are asked to absorb that wage increase through service cuts. That is effectively what is happening. I assume that the HSE is aware of that as well. I wonder is there some way of addressing this issue in future Estimates where, if there is a national pay agreement, it would not be at the expense of service and there should be some other way of addressing that issue.
As Deputy Kelleher will be well aware, I have been strong in my belief and determination that the cost of service, not the service itself, be reduce. There have not been any wage increases in the recent past of which I am aware. In fact, it is quite the reverse. It is that the Haddington Road agreement savings, which relate to pay, must be applied across all sections. In fact, it is reductions in pay, not the reverse, that is the direction of travel.
Perhaps Deputy Kelleher's point was that COPE Foundation, for example, has in its service level agreement taken a reduction and yet the issue of pay, that proportion of the funding allocated, cannot be touched because the Haddington Road agreement protected certain funding. My argument to the Minister has always been that organisations, such as COPE Foundation, which have lived by the service level agreement, should not be penalised in the way others who go over their budgets are. There is funding allocated for staffing only that comes in the lump sum these organisations get that cannot be touched, yet at the same time there is an element of the funding that is touched which has implications for the delivery of services. I fully agree with the Minister in terms of shared services and reducing the cost of services, but in my opinion, many organisations, such as COPE Foundation, which are compliant and which work within the system, are being unfairly penalised. Perhaps that is the point Deputy Kelleher is trying to make.
I do not expect the Minister to be familiar with that. The point Deputy Kelleher makes, with which I agree, is that the service delivery should be conditional on the organisations living up to their side of the bargain in terms of living within the means they are given by the HSE.
In terms of the Estimate with regard to HSE south region, organisations, such as COPE Foundation and St. Joseph's Foundation, will be penalised because they efficiently provide service. They are obligated to honour the pay agreements. Whether such are pay increases or decreases is not the point. They are obliged to pay.
Section 39 organisations are not subject to public pay policy but we have written to them stating that at management level they should certainly be observing it in terms of additional top-ups, pay-ups and other matters. However, they are not like section 38 organisations. They do not enjoy the same rights and privileges as public servants and they are not obliged to adhere to the public pay policy either, and the terms and conditions of section 39 organisations are different to the section 38 organisations, which are the same as the public service generally.
As Deputy Ó Caoláin knows full well, I have always protected all members of the committee. I have always been impartial in the Chair. I resent and reject that remark. I ask Deputy Ó Caoláin to note that.
In regard to the west, if the Minister is here to talk about subhead B4, I am asking about the spirit of the collective approach across all parties and Independent voices yesterday. Will the Minister revisit arrangements in regard to special top-ups for a CEO in a group of hospitals under the HSE in the west region? Will the same spirit of pursuit in relation to top-up payments in the context of HSE employees be adopted in that case as is being sought in section 38 entities?
The answer is that the gentleman Deputy Ó Caoláin alludes to is in position with his salary, terms and conditions approved by the Department of Health and the Department of Public Expenditure and Reform. That is the reality of the situation.
In answer to Deputy Ó Caoláin's question, everyone will be treated the same way. I made it clear, yesterday and at the outset of this. For the record, it is important to say that I initiated this investigation, through the then chair of the HSE who also happened to be the Secretary General, Dr. Ambrose McLoughlin, arising from issues in the HIQA report on Tallaght Hospital. They followed due process and they continue to do so.
As time has passed the Committee of Public Accounts has brought people before it and more revelations have emerged. That process will continue to its conclusion in a due process fashion and I will make my full and final comments around that when all the facts are before me and not before then because people are entitled to due process. That is all I wish to say on that matter.
We have strayed into subhead B5 on that matter. Under that subhead, members of the committee are very concerned and disappointed about what happened regarding the section 38 and 39 agencies, about which we have spoken already. In my view the positions of the board members of the Central Remedial Clinical, based on yesterday's proceedings and the remarks made by Deputy Ó Caoláin, and by Deputy Kelleher previously, are untenable. I hope the Minister and the HSE will take action. I have made the point here and on the national airwaves that the service level agreement, which is not part of what we are considering today, should be used to make sure that they are complaint. That does not mean cutting the service but making sure that the organisation is accountable for the consequences of what it is doing.
Yes, I am on record as having said that. We will use all available powers to us to ensure that the pubic pay policy is adhered to. One of the avenues open to us is the service level agreement but I want to make sure this is done in a way that affects those who are in breach and not those whom they are supposed to served. I do not want patients or clients of any of these institutions or bodies affected in any way negatively as a consequence of behaviours of others because this is not their fault and they have no implication in it. It is the people at the top who need to sort it out and be sorted out in respect of the manner in which the arrangements that were in place under the previous administration have panned out. I take this opportunity to again appeal to people at this time of the year not to allow what is currently before us at this committee and before the Committee of Public Accounts to impede them in respect of their normal sense of charity and justice towards those who are less fortunate than themselves.
I also concur with the Minister's last sentence. I have expressed that sentiment on a number of occasions in media interviews. It is hugely important and we need to take on board concerns expressed by a number of charitable organisations, including by a spokesperson for Bothar on the national airwaves during the week, which indicates the extent of the problem at this point in time.
Regarding the engagement at the Committee of Public Accounts yesterday, the situation exposed by Mr. Kiely, formerly the chief executive officer of the Central Remedial Clinic, and an arrangement with the Mater Hospital in regard to a payment to facilitate pension arrangements, is the Minister in a position to comment on the transfer of funds of the order of €660,000 per annum from the Central Remedial Clinic to the Mater Hospital to facilitate an arrangement? I understand that a contradictory position is taken by the Mater Hospital in today's media but I am not privy to the facts and full truth of this. Can the Minister or his officials shed light on this arrangement?
I am not going to pick a fight with the Deputy but I am advised that because the Committee of Public Accounts is dealing with this issue that, under Standing Orders, neither we nor the Minister are allowed to discuss it until the Committee of Public Accounts has concluded its investigation. I cannot ask the Minister to answer that question because, under Standing Orders, the Committee of Public Accounts has jurisdiction in terms of the matter the Deputy is discussing. Therefore, we cannot go down that road.
I reiterate what I said, namely, that I await the full outcome of the HSE investigation into all these matters, not only the Central Remedial Clinic but all the section 38 agencies. That report will come to me at which point the Department may have to do some research into arrangements that were entered into by it many years ago and to examine the files and make sure that there is accuracy in this respect before I can draw any conclusions. It would be wrong and unjust of me to do so beforehand.
Under C1, there is an increased allocation of €104 million in respect of the primary care reimbursement service, PCRS, to the year end, yet, the signalled intent in the Budget Statement in October regarding the service plan for 2014 is that there is to be a significant reduction in funding to the PCRS. How is it expected that the PCRS will function in 2014 in ever more straitened economic circumstances than has been the case in 2013, yet an additional €104 million is to be provided to get it across the board? I am aware it is not only in regard to the medical card area but it also covers the cost of drugs etc.
Yes, I appreciate it is in respect of the other schemes. It is an impossible task. What is being expected of them is untenable and even from the last time when we engaged in discussion on the impact of the change in attitude towards discretionary medical cards, from my experience there is growing evidence of people who are in very serious circumstances whose medical cards are not being renewed. It is a very serious matter for these people. Not only are they trying to cope with very difficult health challenges but they now have that situation compounded by the loss of the certainty and support their medical card gave them on a daily basis.
On the increased allocation of €104 million for the PCRS and community demand-led schemes, by their nature they are demand-led and therefore it is difficult to assess the final budgetary outturn. The difficulty I have with this is that we seem to be of the view that discretionary medical cards are being reduced even though that is stringently denied by the Minister, the HSE, the Department and everybody else on that side, but from our interpretation of everything that is being said to us by our constituents, debates in the Dáil and replies to parliamentary questions by the Department and the HSE, there is no doubt in my mind, and that of many organisations that advocate for people with long-term illnesses and disabilities, that there is a reduction in the number of discretionary medical cards being granted. I would safely say there is an aggressive campaign by the HSE to rein in the number of discretionary medical cards being granted and I am concerned about that.
As Deputy Ó Caoláin pointed out, a proposal in the budget for 2014 outlines a probity charge or savings of €113 million. I am beginning to wonder does anybody know what is happening any more in terms of medical cards, particularly discretionary medical cards. The continued denials by the HSE, the Minister and the Department versus what I would say everybody in this committee views to be the contrary in terms of an aggressive approach to reduce the number of discretionary medical cards leads me to believe that this particular figure was targeted. It was clear from early on that with the increase in the number of people qualifying because of income eligibility, there was going to be an overspend but, on top of that, the Minister reined in quite aggressively the overspend by targeting discretionary medical card holders. That is clear when one notes this figure.
I will deal with Deputy Kelleher's latter point and let Mr. Byrne deal with the more technical aspects that were raised by Deputy Ó Caoláin. The bottom line here is very clear. There has not been any targeting of discretionary medical cards; a probity exercise has been ongoing.
We mentioned the Committee of Public Accounts and its members would be the very first to haul us before them and ask why we are giving medical cards to people who should not have them or why we are paying doctors or pharmacists when we should not be. That process has been ongoing throughout the year. Members will recall that earlier last year we had a terrible problem with people not being able to get medical cards, with a backlog of 53,000 people. That was cleared and the focus moved to ensuring that people registered with doctors were still in the country or alive, etc.
I will debunk one argument. There is an agreement between the Irish Medical Organisation and the Primary Care Reimbursement Service, PCRS, that allows a GP the facility to put a newborn baby on the list without having to wait months for the HSE to do it. The quid pro quois that the doctor must remove anybody who has passed away. We have already considered the "high risk" cards; in other words, these are cards that have seen no activity for a year and where no prescriptions have been written. We would examine them to see if the people are still here or if they have moved, etc.
The bottom line is the highest number of people in the history of the State have medical or a GP care card. There are 1.865 million people in the medical card scheme and another couple of hundred thousand people with a GP care cards. To say there has been a drive to target any particular group, especially with regard to discretionary medical cards, is wrong. Part of the debate about discretionary medical cards indicates that a significant number of affected people have been converted to full medical cards. Nevertheless, people had cards to which they were no longer entitled. That came from the disparity in the system. The Chairman has argued that we should call it what it was, which was a system of nod and wink. Depending on who a person knew, they may have got a card. As a result, certain parts of the country have a low level of discretionary medical cards but in others the level was very high. That did not bear examination. I know everybody in the room would like to see a position where everybody could have a medical card but we want to ensure that everybody has free GP care.
There has never been a time when a particular condition or illness entitled a person to a medical card. Discretion was shown where a particular medical condition created financial hardship.
There is compassion in the system, which is why I asked for a panel of doctors to be put in to help in the area. They go to great lengths to ensure that people get a medical card but it does not always work out that way. We have had people with very serious illnesses, and as Deputy Kelleher noted, on a compassionate basis one might say they should get a medical card, but their income could be a couple of thousand euro per week. We must bear that in mind when there are other people out there who do not have a medical card and whose income is only a couple of hundred euro per week. That is the difficulty.
The initial goal was to give all those people with specific conditions on the long-term illness card a medical card but the technicalities around trying to achieve that were proving so onerous, it would have taken a couple of years to complete the task, and this was only a temporary phase on the way to free GP care. We would have needed panels of doctors to verify conditions and continuously required monitoring to see if people's positions had changed. It seemed to be such an onerous administrative nightmare that it seemed easier to progress the matter through age cohorts.
We are still fully committed to free GP care in the Government and it remains our ambition. I hope the position of the country will improve in the next couple of years, making that possible. There is no campaign in the HSE to go after people with discretionary medical cards. I have issued an instruction that there should not be, and the Minister of State, Deputy White, is very much in the same space as me. There will always be hard cases and examples where on the surface one might want to issue a medical card. Either we run the system on a transparent set of rules - which was not the case in the past - or we do not. In that case, people in much less difficult circumstances in one part of the country will get medical cards but in other areas, people in much more grave difficulty will not get a card. That would be unfair.
Mr. Tom Byrne:
With regard to the PCRS figure, the target for savings at the start of the year was over €383 million. The shortfall is in the region of €70 million, of which €41 million came from delayed implementation of the Financial Emergency Measures in the Public Interest Act. Another €30 million comes from the shortfall in local schemes delivery, which are mainly demand-driven. There is a low level of discretion with regard to aids and appliances issued across the system. In his opening address the Minister covered the actions we are taking to address the matter.
I thank the officials and the Minister for coming to outline a Supplementary Estimate from the Department of Health. We do not want to rewrite history but a Supplementary Estimate for health without a change in policy is new, and the HSE did not have Supplementary Estimates for a long number of years. There may have been Supplementary Estimates because of a change in policy but the figures debated in these Chambers for many years were outlined as fact. For people to come in to rewrite history in order to make this better does not mean it is fact. There are people sitting next to the Minister who could verify that fact but because of political reasons, they are unable to do so.
Every year there are Supplementary Estimates for health in December. That has happened for the past two years and we will have one again next year no doubt. It is a recurring theme. We cannot continuously pass an Estimate in the budget knowing in our heart and soul - with all the statistics and data in front of us confirming it - that there will be a Supplementary Estimate next year. The Government should be up-front and honest at the start of the year as opposed to being disingenuous and cute at the end of the year. For example, we know the €113 million in the probity cannot be realised and there are many other aspects of the Estimate for next year that we are taking on a wing and prayer. In good times or bad, the Estimate should be based on fact as opposed to a novel of fiction, which is what we will face again next year.
In the opening set of questions to the Minister, I asked about the impact of the introduction and passage of the Health Service Executive (financial matters) Bill. The purpose of the Bill is to disestablish the HSE Vote. I want to know if the Minister is in a position to tell us when the Bill will be introduced and if it will do away with this democratic engagement. It is stated that the Bill will establish a statutory financial governance framework for the HSE. As members of the committee and democratically elected voices, we are anxious to know about these matters. If the Minister is not in a position to give us the detail here, perhaps he would be good enough to furnish us with a briefing note that could be shared at this point, given that the heads of the Bill have not been published and we have no further insight into it. I am concerned that the intent is to do away with the HSE Vote, which would undermine our democratic responsibility of oversight and scrutiny.
On the charge for private patients in public beds, I am not happy at all that the €60 million that was expected in 2013 was done away with and that in 2014 only €30 million is to be sought. Conscious of the potential impact of that, I believe the decision needs to be revisited. There is more potential there; it should be done and it should be pursued.
On the cost of drugs, has the Minister given any further consideration to the case I have made consistently, that we should go for the lowest cost? Currently, we access drugs on a cost basis that is based on the median of nine member states of the European Union when my strong view, which I have put to the Minister time after time, is that we should go for the lowest cost. We are being trapped into a situation where like is not being compared with like. Going for the median figure leaves us carrying a cost factor way in excess of other closely related and comparable democracies. I urge the Minister to seriously pursue that approach in the interest of arriving at the lowest possible cost for this State in the provision of drugs and other related medicines.
I apologise, Chairman, as I had to leave after my initial contribution. I asked for figures on agency costs for non-consultant hospital doctors and nurses. I know the Minister does not have the figures with him but I ask him to send them on.
Okay. I hope I will get those figures. I have been told that the agency cost of non-consultant hospital doctors in particular is significant. The Minister tells a good story about medical cards. Unfortunately, I do not believe him because what he has said conflicts with what I see on a daily basis in my clinics around Tipperary and what I am told by other Deputies on what they hear in their clinics around the country. In one case a child with hydrocephalus, cerebral palsy and epilepsy, who is wheelchair bound, was refused a medical card. I also seek clarification on how the medical assessment is done by the PCRS. I am aware of two cases where the applications have been with doctors since 7 October and have not been finalised. I heard what the Minister said but, unfortunately, I do not believe him. I am certain there has been a policy change on discretionary medical cards on medical grounds.
First, let us get the record straight for Deputy Kelleher who believes there were no Supplementary Estimates in health previously, unless there was a policy change. Perhaps he would like to tell the committee what policy change took place in 2010 when the Supplementary Estimate of a Minister of a Government of which he was also a Minister was €595 million.
No, the Deputy will not because my Department has checked it out and there was not any policy change. When people like to revisit history the extraordinary thing is that between 1997 and 2009-----
This is important. To take things in isolation does not allow the context. Health spending quadrupled from 1997 to 2010 and still in 2002 there was a Supplementary Estimate of €210 million, in 2003 it was €62 million, in 2006 it was €240 million, in 2008 it was €345 million, in 2009 it was €254 million and a whopper in 2010 of €595 million. In January 2011, despite a quadrupling of health spending and the voting of massive Supplementary Estimates, we still ended up with 569 people on trolleys on a given day. That is noteworthy.
Deputy Ó Caoláin was concerned about the new Act and whether it would mean that we would have less transparency. In fact, we will have even more transparency because both the Secretary General as the Vote holder and the director general of the replacement agency will still be in before the committee to face questions. There will be no diminution of accountability.
Deputy Ó Caoláin also referred to the cost of drugs and wanting the lowest price. Such matters have to be decided by way of negotiation. We did seek to go for the lowest price but as we could not get agreement through negotiation we went for the median. We have still reduced the cost of drugs this year by €120 million, which is a considerable amount of money. We need to do more. The serious cross-border threats directive will allow us to join with much bigger countries such as the UK, Germany and France to purchase vaccines in particular and that will reduce costs even further. I will push the notion in Europe that the directive should extend to drugs in a more general sense. We have a problem in that if we go too low even the drug companies that produce drugs in this country will release so much for our market and wholesalers will snap them up and sell them in other countries where they can make a profit. There is a balance to be struck.
This has been an extremely busy year. We launched Future Health - A Strategic Framework for Reform of the Health Service 2012-2015. In May we had two reports - on the establishment of hospital groups as a transition to independent hospital trusts and on securing the future of small hospitals. They were both published and we now have the chairperson of each group in place and the advertisements are in the newspapers for the new CEOs of the groups. We launched the Healthy Ireland policy initiative on health and well-being. That was published in March and is now being implemented. That is a critical point for me. As Minister for Health and as a doctor I believe we must to stop paying lip service to prevention and pay for it. That applies to tobacco in particular. I am very pleased that the committee was able to start the hearings on the heads of the standard packaging Bill.
The Health Service Executive (Governance) Act came into operation on 25 July, which abolished the board of the HSE and provided for a directorate which is now in place. The work on the national children’s hospital is progressing. The two boards are in place. Timelines are being put in place and we look forward to expediting that. Only last week St. James’s Hospital secured planning permission in an eight-week period for a seven-storey building to help with the decant of existing services off the site to make more room for the hospital. The draft paper on universal health insurance, UHI, which I know Deputy Ó Caoláin has been anxious about, has been presented to me. We are studying that. We hope to expedite it and, if possible, to get it published before Christmas.
Shadow funding for selected hospitals under the "money follows the patient" policy is in full progress. That will be implemented on a phased basis from 1 January 2014. All that progress was made while hosting an extremely successful European Presidency where we got the directive on tobacco through against the odds, as many people saw it. We have engaged in significant cross-Border initiatives with the Minister of Health, Social Services and Public Safety, Mr. Poots, on alcohol, tobacco, paediatric cardiac care and a range of other initiatives. We made a major contribution to the Haddington Road agreement, and successfully concluded negotiations with consultants which now reduces their starting pay by one third, allows for the appointment of directors of clinical care and allows consultants to work any five days out of seven, which is making a big impact on services.
The health reform board, a programme management office in the Department and a systems reform group in the HSE have all been established. We have a communications strategy. The Health (Pricing and Supply of Medical Goods) Bill was enacted by the Houses. A national positive ageing strategy was published in April and is now being implemented. A review of the emergency aeronautical support service pilot project has been completed and found that significant reduced transport times for seriously ill patients were achieved and made a recommendation that it would be continued.
The finance reform board is in place and the chief financial officer, who is present, has been appointed. A new financial and cost management system has been identified and is being costed. We will introduce free GP care next year. The special delivery unit, SDU, work continues. The e-health strategy was approved by Government in October and will be shortly launched and implemented.
The publication of the Health Identifiers Bill, as agreed by the Government, will take place tomorrow. All of us, including committee members, did considerable work on the Protection of Life During Pregnancy Bill. It was another achievement during the year. The public health (sunbeds) Bill has now been stamped by the Attorney General and will be published either this side of the new year or early in the new year. The relocation of the National Maternity Hospital, Holles Street, to St. Vincent's campus in Elm Park was announced in May and, as members know, the report of the tobacco policy review group, Tobacco Free Ireland, was published and launched in October. These are only some of the developments during the year, which has been extremely busy.
I thank the members for all their assistance. They hold us to account and we expect to be held to account. I thank the Department and HSE representatives for attending today. I thank them and all the officials for their courtesy. I wish everyone present and all the staff in the health service and Department a happy Christmas.
I thank the Minister, Ms Fiona Prendergast, Ms Bairbre Nic Aongusa, Mr. Tom Byrne and Mr. Colum Maddox for attending. I congratulate Mr. Tom Byrne on his appointment. I thank the officials for their courtesy to committee members and wish them and all the staff in the Department and HSE a very happy and peaceful Christmas and a prosperous 2014. We will see the Minister for our quarterly meeting on 16 January.