Mr. Robert Watt:

I wish a good morning to the Chair and members and thank the Chair very much. I am happy to be here before the committee this morning to consider the Appropriation Accounts for 2022. I am joined by colleagues who the Chair has already listed: Louise, Derek, Kevin, Patrick and Sarah. I am also joined by the CEO of the HSE and colleagues from the HSE. I will endeavour to address the specific issues the committee members have raised in their letters to the Department, with a particular focus on the priorities of the Department and the HSE to maximise the provision of safe and efficient health services for our citizens.

In the face of growing healthcare demand each year, there is a need to deliver services both safely and efficiently. Investment in healthcare has not always resulted in improved activity or performance, representing the so-called "productivity puzzle". While we have succeeded in increasing activity in our hospitals, and with increasingly better outcomes for our citizens, this has come at an increasingly high cost to the taxpayer and the Exchequer.

To give some numbers, investment in the acute care system has increased by more than 80% over the last seven years, from €4.4 billion in 2016 to €8.1 billion in 2023, with acute care expenditure now making up over a third of overall spending. The hospital workforce, the numbers of employees, has grown by 36% over the same period. This indicates, allowing for inflation, a real increase of circa 50% - a very significant increase - in the resources of the acute system. The number of patients treated has not kept up with this large increase in resources and a major challenge for us is obviously to increase the levels of activity commensurate with the resources that are allocated by the Exchequer.

As members will be aware, the Minister for Health announced the establishment of a productivity and savings task force, jointly chaired by me and the CEO of the HSE. There are many aspects of this work, but key areas of focus are: the use of new technology to provide services with data and insight to support better performance; adding to the new ways of working that are an increasing feature of our health system, including streamlining operational processes and clinical pathways - there is a very significant reform of clinical pathways led by Dr. Colm Henry - and these are intended to drive productivity across the health sector; and delivering savings across a range of areas including medicines, procurement and standard utilisation of goods and services. Ultimately, the aims of the task force are to maximise value for money and improve patient outcome. That is what we have been tasked by the Government to undertake as part of our efforts this year in terms of improving the services within the allocation made by Government and the Oireachtas.

One of the areas the task force identified as having potential for savings is the use and cost of agency staff. Alongside our workforce, which has increased by over 26,000 since 2020, the spend on agency staff has continued to increase year on year in the same period. The CEO of the HSE has already announced several cost control measures over recent months, including a targeted reduction on expenditure on the use of agency staff within the health service of over 10% and further reductions are being targeted in 2024.

There are levers to safely reduce agency costs and many of these are now under way across the HSE. Actions to reduce agency costs will continue and are intended to deliver a higher level of savings throughout 2024.

A key lever for reducing reliance on nursing agency is through the implementation of the framework for safe nurse staffing and skill mix. This framework is an evidence-based way to determine or seek to determine workforce requirements to meet sustainable high-quality safe care delivery and is being implemented across all acute hospital sites. To date, there have been 1,200 whole-time equivalents recruited and plans for 2024 include agency conversion to continue to progress the roll-out of safe staffing.

Strong controls around sign-off and procurement of agency staff also help to ensure value for money and appropriate use of agency. The HSE has worked with services last year to strengthen these controls and will continue to do so this year.

Finally, I will mention a very important change introduced in the introduction of the public-only consultant contract in March of last year. This enables a work plan with extended and flexible working attendances over longer hours and weekends. We might discuss, with the CEO, the impact this has had over the last six or seven weeks as we have tried to deal with the winter surge in the ED departments and how we tried to use flexible and extended working arrangements to try to contain the very large increase in demand. I am happy to say that over 1,700 consultants, 41% of the total number of consultants, are now employed on this contract. This represents a great opportunity for the health system to significantly increase the contact hours of senior decision-makers in our hospital system. It is probably one of the biggest potential changes that we have seen in recent years.

Alongside a focus on making the health budget go further, the HSE and the Department will have a focus on tighter budgetary control and accountability in conjunction with our colleagues from the Department of Public Expenditure, NDP Delivery and Reform. There is currently extensive oversight and reporting to relevant stakeholders on the HSE financial performance through the year.

Once the annual allocation is made to the HSE, it is, via the national service plan, distributed to services across the HSE for provision of health care. The plan, which is submitted by the board and agreed by the Minister, sets out how the HSE plans to use its resources and the services it will deliver in that year.

The HSE monitors spend and performance across all services, and I am sure the CEO of the HSE will be happy to talk in more detail about those particular processes. The Department provides a further layer of governance and monitors and reports to stakeholders regularly on the spend of the HSE and on all health agencies. High-level governance between the Department and the HSE is exercised through monthly performance meetings between me and Mr. Gloster, as well as quarterly meetings held between the Minister and the chair of the HSE board.

Additional scrutiny is provided through the health budget oversight group, which is chaired by the Department of Public Expenditure, NDP Delivery and Reform, attended by Department of Health and HSE officials. This group meets monthly to discuss financial performance and any other issues that relate to the management and monitoring of spending throughout the year as issues arise.

The financial performance of the HSE is also reported to Government on a regular basis through the Cabinet subcommittee on health and quarterly memorandums to Government. Like other large-spend Departments, the Department submits a quarterly memorandum to Government on how spending is progressing relative to profile.

Notwithstanding the extensive monitoring and oversight processes there remain challenges in managing overruns and balancing the needs of patients and the costs of delivering health services.

I will touch now on some issues the Chair specially asked us to discuss this morning. A key area of investment that can help to improve both patient experience and productivity in the sector is the provision of safe, high-quality infrastructure. It is fair to say that, historically, this is an area where we have not invested enough in modern facilities and infrastructure, and this is evident when one travels around and visits facilities around the country. The overarching objective for the HSE in the annual capital plan is to prioritise contractually committed projects that address known compliance and patient safety risks associated with healthcare infrastructure, equipment and fleet replacement and then continuing initiatives to support patient access to services taking account of available funding.

The committee also referenced the regional health areas. Members will be aware that from the first quarter of this year, the HSE will be reorganised into six regions. Each region will be led by a regional executive officer, all of whom have been appointed and the announcements made, who will be responsible for the delivery of timely, integrated care for their residents. Key milestones in the period ahead include the appointment of the regional executive officers, which has been announced, the roll-out of a new integrated service delivery model, which is the key objective of the new regions, on the front line and standing down hospital groups and CHOs by the end of this year. This is a significant programme of reform and change, led by our colleagues in the HSE. The overall governance arrangements will continue to be progressed through 2024, together with the new regional officers and their teams. These new arrangements should support both clear financial control and accountability and integrated regional care close to patients. The establishment of the regions in the context of changing the structure of the Vote, to add to what the Comptroller and Auditor General mentioned earlier, mean the new regional structures will provide an opportunity to look at how funding is allocated, both on the basis of a functional area and on a geographical area. This is something we are working on in collaboration with the Comptroller and Auditor General during the year.

Lastly, I assure members there is a shared focus between the Department and the HSE on the fact that we need stronger budgetary controls. We need to deliver more efficiencies and savings in the short run while continuing to improve delivery of services to the public. As the Chair knows, demand for these services is increasing significantly year on year. We must utilise new ways of working, better patient pathways and new digital innovations and see more care delivered in the community as part of the enhanced community care programme. As I have said before, we cannot continue to meet the ever-growing demands on our health system and treat satisfactorily the numbers of people turning up, whether for outpatient consultations, to our accident and emergency departments or for elective surgery. Whatever source of care people may be looking for, we cannot continue to meet this demand, and the prospective demand, based on the legacy structures we have. The process of reform, which I think has been significant, needs to accelerate and be embedded if we are going to have a health service we can all be proud of.