Dáil debates

Wednesday, 25 June 2014

Ceisteanna - Questions - Priority Questions

HSE Expenditure

10:30 am

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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1. To ask the Minister for Health if he will provide an update on the Health Service Executive's financial situation; if he expects the HSE to require a Supplementary Estimate this year; and if he will make a statement on the matter. [27413/14]

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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This will be the Minister's last health questions before the summer recess. It would be appropriate for him to outline in detail the precarious financial position in which the HSE finds itself again where we are talking about a potential budget deficit of over €500 million, the warnings by officials from the HSE, and the concerns and the impact of this on front-line delivery of services. The Minister might outline in detail the actions he intends to take to address this spiralling problem for the HSE and the provision of funding.

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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There has been significant focus recently on the challenging resource constraints within which the HSE is operating. While the budgetary targets this year are particularly constrained, it is important to recognise that similar financial and resource constraints have applied in each of the past number of years as a direct consequence of the emergency financial situation the State has had to address since 2008.

The cumulative impact of this unprecedented period of financial and resource restraint has resulted in reductions in the health service budget of the order of €3.3 billion, that is, over 20%, with the numbers employed reduced by over 14,000 in the same period. On a comparative basis the OECD report, Health at a Glance 2013, shows that recent reductions in public health expenditure per capitain Ireland are the highest experienced in any OECD country with the exception of Greece.

These challenges come at a time when the demand for health services is increasing each year which, in turn, is driving costs upwards. However, despite these resource reductions and increasing service demands, the HSE has managed to support growing demand for its services arising from such factors as population growth, increased levels of chronic disease, increased demand for prescription drugs, and new cost intensive medical technologies and treatments. The HSE is to be commended on meeting these increased demands on its services.

That said, 2014 is proving to be a particularly challenging year for the health services. Cumulative net expenditure to the end of March is €114 million lower than in the same period last year, but given the extent and the phasing of the targeted budget reductions, the cumulative deficit of €80 million is higher than last year's €27 million. The Vote for the HSE is reporting a net deficit of €158 million at the end of May.

As the Deputy will be aware, the expenditure ceiling for the HSE is decided by Government, among other things, against a backdrop of national budgetary objectives and the prevailing macroeconomic conditions.

Additional information not given on the floor of the House

Very difficult decisions were taken by Government in the context of the overall budgetary arithmetic. Certain savings targets required of the HSE at the time of the budget were considered so challenging that it was agreed that a separate validation exercise to assess their achievability would be undertaken by the Departments of Health, Public Expenditure and Reform, and the Taoiseach. While work continues on the maximisation of the savings achievable under the Haddington Road agreement, the initial savings targets under medical card probity were reduced by €110 million in the context of the Revised Estimates Volume, REV. Along with pay savings targets, and taking account of the reliance on agency workers which is further compounded by the European Working Time Directive, it is clear that the challenges facing the HSE in 2014 were extraordinary from the outset.

There is ongoing and intensive engagement each month between officials of my Department, Department of Public Expenditure and Reform, DPER, and the HSE in the context of regular monitoring of expenditure. The HSE is proactively engaged in internal efforts to maximise savings and cost containment plans and to ensure that additional measures are identified and safely implemented to mitigate any projected deficits which are within HSE direct control, while engaging on an ongoing basis with my Department. I assure the Deputy that the national director for acute hospitals has written to all hospital groups-hospitals setting out clear key messages around the need to reduce costs safely and to submit additional cost containment plans. Additionally, a full round of high level performance assurance meetings has been completed and another round is starting. The Director General has met the board chairs, CEOs and clinical directors of the ten hospital groups-hospitals with the greatest financial challenges to ensure the messaging is explicit right up to board level in terms of the hierarchy of performance management priorities, that is, service safety and quality first, financial management next and then all other priorities, including elective access for non-clinically urgent cases.

Work is ongoing between the HSE and my Department on finalising projections to year end based on data for the first four months of 2014, in tandem with assessment of performance in the same period and risk to year end within its cost containment plans. It would be premature for me to comment further at this stage, pending the outcome of this work, but as the HSE has indicated, the scale of the risk and challenge in achieving financial break-even by year end remains extremely significant as predicted in the National Service Plan 2014.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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Year on year, our difficulty is that we highlight time and again the inadequacies in terms of the Estimate that is brought to this House. The Government will be well aware of it as well. Even the language the Minister uses in terms of the HSE service plan, for example, in the context of unspecified savings, is an indication that he is grasping for or pretending that he has the funding to run the health services for the year ahead. That is what is happening year in, year out.

The Minister states consistently that there has always been a Supplementary Estimate from the Department of Health to the HSE. That has been because of a change in policy, but everybody knows that one addresses the Estimate from a no-change policy perspective first and if there are changes in policy, one either adjusts the budget forward or up or down in that context.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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What if the economy collapses?

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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A question, please. This is Question Time.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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In 2008, even in that context, the HSE came in on budget and there was not a Supplementary Estimate. We must try deal with facts here.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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We have to deal with time as well.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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The difficulty is every year the Minister, Deputy Reilly, presents a fatally flawed budget.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Did Deputy Kelleher hear me? We are over time.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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My apologies.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I remind Members there are two minutes for the Minister to answer and a minute for each supplementary.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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I thought it was two minutes. My apologies.

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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It will not take me two minutes to respond to Deputy Kelleher.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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One minute.

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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As they say, one can avoid the facts but they will not avoid you. Deputy Kelleher alludes to 2008. Would he tell us what the Supplementary Estimate was in 2009? Would he like to tell us what it was in 2010? In his party's last year in government, it was nearly €600 million in health. Let us deal with the facts. In 14 of the past 17 years there have been Supplementary Estimates in health. For 12 of those 14 years, the budget was increasing, and was quadrupled, and still they failed to keep it within budget.

At a time when we have had to take €3.3 billion out because of the mess the Government of which his party was a member left this country in, we have had to take serious decisions about how the health service is run. The good men and women who work in the health service have managed to achieve a reduction in the number of patients who have to lie on trolleys for long periods of time and a reduction in the number of patients who have to wait long periods for inpatient treatment and, for the first time ever, and have quantified the number of outpatients and treated 95% of them within a year. The health service is improving, despite the serious challenges that it has to face.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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We consistently get the history lesson but the Minister does not live in the real world when it comes the budgetary estimate process. Year on year, as I stated, we face a situation where the Minister presents a flawed budget to the House. That has happened over the past three years. I see no reason this year's budget was presented in any different way because it includes unspecified savings of €108 million.

In October last, the Minister went to the Minister for Public Expenditure and Reform and the Minister for Finance to look for €1 billion extra and he walked out of the room with €666 million less.

That is what happened last year. It is not that I have a difficulty with credibility. The issue is the Minister's credibility with his Cabinet colleagues in the delivery of sufficient funding to provide a budget that will sustain health services. That is what we are talking about. In terms of a history lesson of what happened in the past ten or 12 years, people want to know what is happening this year in the health service.

10:40 am

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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We have made it very clear what is happening this year. We have a national service plan for the HSE, in regard to which patient safety is a clear priority. There are other things in it, including an expansion of the transplantation service. Last year was a very successful year one, with more transplants carried out than ever before. We have also put in place diabetic retinopathy screening and colon cancer screening services. Many good things have been done, as well as maintaining the services. If it had been all about money, as the Deputy seemed to think when his party was rolling in it, it would have been able to fix the health service. Instead of reforming it, it just continued to throw money at it. As we all know, the Deputy's party leader was the creator of the HSE, which has become an absolutely devalued brand and which the Government is committed to replacing.