Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

The Health Service Executive (Financial Matters) Bill 2013 fulfils a commitment made in the programme for Government on future health. The Bill is designed to disestablish the HSE Vote, have HSE funding come under the Department of Health's Vote and establish a statutory financial governance framework for the HSE.

The health reform agenda set out in the programme for Government includes a commitment to dissolve the HSE and transfer its functions to other bodies as part of a wider move towards the establishment of universal health insurance.

The Bill provides for the disestablishment of the Vote of the HSE and the funding of the HSE through the Vote of the office of the Minister for Health from 1 January 2015. It also establishes a new financial governance structure for the HSE. It gives the Minister power to set a net budget for the HSE and approve as part of the service plan the executive's gross income and expenditure plan. It also reintroduces the first-charge principle whereby if the HSE exceeds its budget in one year, it must discharge the liabilities arising as a first charge the following year. It imposes certain legal obligations on the director general of the HSE to ensure the executive operates within the financial limits imposed by the Minister. It provides for a new procedure for the approval of capital plans. This provision will come into effect on 1 January 2015.

The HSE was established in January 2005 under the Health Act 2004, and it was given statutory responsibility for the management and delivery of health and personal social services. The Act emerged from the long-standing perception that the then system of health boards was problematic from a governance perspective. The HSE replaced ten regional health boards, the Eastern Regional Health Authority and a number of other agencies and bodies. It was the first body in the history of the State to manage the health services as a unified body. In a sense, the establishment of the HSE marked the culmination of an inevitable revolutionary process of rationalisation over several decades that resulted in the number of administrative units being reduced from over 90 to one, a national agency.

A key intention behind the legislation was that the executive’s establishment would mark a clear division between responsibility for policy, which would rest with the Department of Health, and the responsibility for management of services, which would rest with the HSE. An additional outcome was that power was effectively removed from local elected representatives, although the Act did provide for regional health forums comprising elected representatives. These forums have representative rather than executive functions.

Since its establishment, the HSE has been subject to controversy and criticism of a high level. There was not a decline in personnel numbers on its creation. There was a continuation of separate financial and other structures from the health board era within the HSE. There was insufficient openness and transparency and a general lack of integration and coherence across the organisation.

There have also been criticisms of the specifics of the relationship with the Department of Health. The programme for Government committed to a health reform programme to achieve a universal, single-tier health service based on universal health insurance. As part of the reform process, the programme stated the HSE would cease to exist over time, and that its functions would return to the Minister for Health or be taken over by the universal health insurance system. The Minister for Health and his Department will be responsible for policy and expenditure. The HSE will cease to exist as its functions are given to other bodies during the process of reform.

The HSE hospital purchasing arm will merge with the National Treatment Purchase Fund to become a new purchaser of public patient care during the period of transition. HSE hospitals will become autonomous providers of care. With universal health insurance, public hospitals will no longer be managed by the HSE. They will be independent, not-for-profit trusts with managers accountable to their boards. The Patient Safety Authority will introduce a national licensing system for hospitals and will oversee the transition of hospitals from the HSE to independent local control.

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