Finian McGrath (Dublin Bay North, Independent) | Oireachtas source

I thank the Deputy for her important question. I hope we can get to the bottom of the issue.

The HSE national service plan set out in 2018 funding for health services totalling €14.556 billion. A sum of €14.411 billion was originally allocated to the HSE by the Department, with €145.9 million held back for new developments, most of which sum has since been released. The national service plan for 2018 included the establishment of a value improvement programme, VIP, which considered how to reduce the costs of delivering services without impacting negatively on either the level or quality of such services. The HSE prepares its annual service plan on the basis of a set of estimates and assumptions. In calculating the VIP target of €346 million in the 2018 plan, the HSE went through a process that considered the level of service it could currently provide with the available funding, the level of activity that could be tailored to fit the funding and what level of activity was almost entirely driven by demand.

The health service is very complex, as the Deputy knows. It is the provider of last resort, the provider of 24-7 services and a place of safety. There are a number of areas, including emergency departments in hospitals, disability, residential placements and similar areas, in which a activity of a certain level will happen even if there is not specific funding for it. I know this from disability crises. The HSE, through its planning process, determined a need for savings of about €346 million. A core national team was established to support the system in delivering the VIP, working as part of the performance improvement management unit. Despite an initial promising start, progress in identifying and advancing proposals, and actually securing the targeted savings, was slower than anticipated. Contributing factors to this were the significant operational management pressure due to the winter surge, an extensive flu season and storm emergencies, in addition to particular calls on the VIP senior team to support GDPR implementation.

The HSE is now putting in place appropriate resources across the system to ensure delivery of progress on the programme. There were three distinct themes within the overall programme. The HSE led on two themes, namely, focusing on a cost-reduction programme at service level and focusing on a corporate value programme. The service-level programme focused on cash-releasing initiatives in 2018, such as reductions in the use of agency services and conversion to full-time permanent posts, where the latter two are local and not linked to corporate-level initiatives, such as the nursing task force, and renegotiated supplies and utilities contracts. The HSE identified a €77 million savings target in this area.

In the corporate value programme, the HSE was tasked with identifying savings and cost reductions across its entire corporate operation. This might include better control of central administrative costs such as travel and better management of supplies. It was envisaged that this programme would identify savings of €119 million. A number of savings initiatives are in progress. Work is ongoing with respect to a number of corporate-level initiatives identified earlier in the year.

Additionally, within the overall VIP, the Department of Health was to work with the HSE within a shared governance and oversight framework on a strategic value programme. This would be a multi-year strategic initiative with the intention of achieving savings of €150 million in 2018 through identifying and implementing savings from productivity, improved models of care, policy implementation and delivery of service reform. To date, the most progress has occurred in VIP theme 1, which had an overall savings target of €77 million. The targeted savings were allocated over acute hospitals and community healthcare organisations, CHOs, and the HSE has indicated that the expected realisation in 2018 will be approximately €60 million, with the acute hospitals largely achieving their targets but the CHOs falling somewhat short.

VIP theme 2 savings are being assessed across all parts of the system, and this review will be reported at the end of the year. There was no progress made on VIP theme 3 in 2018, and this has contributed €150 million to the deficit in the HSE, which amount will be funded via the Supplementary Estimate. It is envisaged, however, that the groundwork undertaken during the year will support and promote the establishment of value-improvement measures in the context of 2019. I hope that goes some way towards answering the Deputy's question.

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