Mr. Paul Reid:

In terms of delivering against budget at the start of the year versus the end of the year, there are three forces that managers in the HSE and I must manage. The first is obviously improving the services that we are delivering, which Deputies are quite rightly challenging us on in terms of where we are today; the second is providing a safe environment for all users of our services; and the third is doing all of that within the budget allocation that we have been given by the Oireachtas and Government. They can be competing forces on a daily basis but we must make judgments throughout the year to keep those forces in balance together. How are we doing that? If one takes my opening statement on where we are this year in comparison to last year, one can seen a strengthened financial performance which I put down to a few factors. We are now operating at a level where each hospital group CEO and each community officer attends a monthly meeting with the chief operations officer and the national director. We go through slides, hospital by hospital, group by group, CHO by CHO, on service performance and financial performance. They all have allocated budgets, month on month, to report back against. That may sound like basic financial governance but it is really important and it is having an impact. We have hospital group managers owning their budgets and CHO group managers owning theirs. They are committing to actions for the following month and next Tuesday we will go through the whole process again. The basic discipline of strengthening our financial management processes across the organisation is proving beneficial. I can demonstrate that by pointing members to the current position on our budget this year compared to the same time last year. Apart from the fact of being down on the same position last year in terms of the overrun, the mix is also important.

If one looks at the €16 billion budget that the HSE was allocated for the delivery of services, €12 billion of that is for operational services, where we can hold individual managers, hospitals and CHOs to account. On that funding, we have challenged the CHOs and everyone else not to go above €100 million, which is accounted for by our acute and disability pressures. The other €4 billion of the €16 billion budget relates to pensions and demand-led services. We can get our arms around some aspects of that, like drugs reimbursement by using more biosimilar products, for example. We are now challenging every clinician in this area and we now have data telling us which consultants in what hospitals and hospital groups are using biosimilars. This is a much more cost-effective use of our drugs budget. We have put a gain-sharing agreement in place with some hospitals and clinicians, whereby they are rewarded for the use of biosimilar products which makes a significant saving for us. We can do a lot in some areas. In summary, if one looks at our budget for this year, the largest part of the €281 million overrun, at 53%, is in the demand-led areas where we are under pressure. In fairness to the operations systems, they have a stronger control over and grip on the finances.

Regarding data, Members will be well familiar with the lack of a robust financial management data system across the health service. There are remnants of the various health boards and the different systems that were in place in various areas. I will not go back over the past but at the next board meeting on 18 October we will discuss and seek approval for an investment plan for a new integrated financial management system.

This system will be integrated across hospitals, including acute hospitals, community healthcare organisations, CHOs, and our section 38 organisations. One of the pressures we have to deal with as part of this process is the management of finances within section 38 hospitals. In summary, we will have improved financial controls and management processes, we are investing in a new financial management system, we will have greater clarity on what individual hospital groups and CHOs can control and will be able to hold them to account for those matters, and we will have to balance service pressures with patient safety pressures to mitigate risks, an issue which many members have raised.