Thursday, 16 April 2015
Ceisteanna - Questions - Priority Questions
5. To ask the Minister for Health if he will confirm from where the minimum 2% to 2.5% reduction in hospital budgets this year is envisaged to come; if he will address the deficit in acute services, as outlined in the Health Service Executive's most recent performance review; and if he will make a statement on the matter. [14938/15]
I seek to establish from the Minister how the acute hospital network is to function with what is described in the health service performance report for January as a minimum of a 2% to 2.5% reduction in the financial provision for the current year.
For the first time in seven years, the overall budget for health services has increased. The HSE will have €635 million more available in 2015 than was provided in the original Estimate for 2014. In addition, a minimum savings target of €130 million has been set in areas such as procurement, drugs and agency costs in 2015 and, in a welcome new development, further savings that can be achieved over and above the minimum savings target will go back into the delivery of health and social care services. In the past three weeks additional funding has been sanctioned for primary care, the fair deal scheme and the opening of community and district hospital beds.
Approximately €4 billion is being made available to acute hospital services in 2015. A further €900 million comes from insurers and charges paid by patients to hospitals. This represents a very significant increase in hospital budgets compared to the original provision last year. When compared with the 2014 expenditure outturn, taking account of overruns which should not have happened in the first place, there is a modest reduction of approximately 2%. These savings are to be achieved in the manner set out in the HSE service plan and include savings in procurement, reductions in drug costs and the reduction of agency and overtime expenditure through more appropriate staffing and workforce planning, including taking on additional staff.
The HSE national service plan includes a robust accountability framework and the HSE is in ongoing engagement with the hospital groups to ensure a comprehensive and robust assessment of emerging financial pressures and appropriate measures to deal with same. The service plan recognises that the allocation of more realistic budgets brings with it a requirement for greater accountability to ensure services are delivered within the budget provided. The commitment of the management and staff of hospitals will be key in ensuring the best possible outcomes are secured from the €4 billion budget within which hospitals must operate in 2015.
After saying so much the Minister finally acknowledged that the acute hospital network was expected to function within a reduction of the order of what he stated was 2%, but it was stated in the health service performance report for January that at a minimum the reduction would be 2% to 2.5%. We already know that the acute hospital network is facing severe resource difficulties. Last year there was a Supplementary Estimate and we know that legislation has been passed whereby, allegedly, there will be no more Supplementary Estimates and that so-called overspend figures will be carried forward. This is only laying the foundations for a future crisis. There can be no other way to describe it. The report indicates that acute hospitals reported a €10.6 million deficit for January alone. I do not yet have the figures for February and March, but perhaps the Minister might. If he does, do they mirror the January figure? If that is the case, does it not tell him that we are simply not able to deliver even on the same level, let alone more with less? The heroic efforts of those working at the coal face on hospital sites face ever greater difficulties.
Budgets vary from hospital group to hospital group and from individual hospital to individual hospital. All hospital groups and hospitals have had an increase in their budget allocation in 2015 over 2014. What we have not done is allow them to incorporate their entire overrun last year into their base for this year. This is very different. We cannot have a situation where hospitals overrun by 15% or 16% and receive a further 2% on top of this for the next year. We will not allow this. The Deputy has clearly read the performance assurance report, PAR, but he has been quite selective in the sections he mentioned. What is very interesting and of concern about the figures for January and February - the figures for both months are similar - is that hospitals are spending more money and have more staff but fewer patients. The numbers attending emergency departments decreased in January. The number of elective admissions also decreased. What happened in January and February was that hospitals hired more staff and spent more money but saw fewer patients. That is not acceptable. It is very important that hospital managers and chief financial officers understand this and get to grips with it in the coming months.
When it comes to selectivity, the Minister is the ace player, about which there can be no question. He spoke about fewer people presenting, but we have not forgotten what January was like. As I understand it, it was a crisis time with the numbers presenting.
The fact of the matter is that there was a crisis period through January, February and into early March. The report to which I referred states very clearly that while a more realistic budget for acute services was provided in 2015, it was not possible to provide a budget at the full level of the 2014 spend. The Minister is very happy to speak in terms of what was allocated at the outset of 2014, but he is completely ignoring the reality in terms of the additionality which had to be provided to meet the real cost o the provision of acute hospital services through 2014. The report clearly states final expenditure levels for 2014 mean that costs in acute hospitals need to be reduced by approximately 1.2% to 1.4% below 2014 expenditure levels and pay and that other cost pressures must also be dealt with. These will result in a likely cost reduction in 2015 of approximately 2% to 2.5%.
If he had read it, he would know that attendances at emergency departments were down in January compared to January in the previous year.
The numbers of emergency and elective admissions were down. Despite this, there were problems with overcrowding. There were additional staff and an additional spend. That is not acceptable.
That cannot continue for the next couple of months. It seems that one of the major factors was the fact that there were so many delayed discharges, which was reducing bed capacity. That is why the additional money is being provided for community beds under the fair deal scheme, to free hospitals of the current level of delayed discharges in order that they can operate more effectively. That is under way. It will happen in the next couple of weeks and should allow them to employ their resources more effectively. Savings are supposed to come from turning very expensive agency staff into staff with proper contracts, whether fixed-term or permanent, from savings in procurement and from any reduction in drug costs we can achieve during negotiations with the industry. Reference pricing will also help to bring down bills for hospitals.