Paddy Burke (Fine Gael)
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I welcome the Minister for Health to the House.

David Cullinane (Sinn Fein)
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I welcome the Minister, Deputy Reilly, to the House. The last time he was in the House when we had a discussion about a Bill to reform the HSE, I mentioned a working group that was established to look at hospital networks. The Minister will also be aware of a south-east hospital working group, which also sent a submission to him and which is headed up by Professor Fred Jackson. The submission was about a regional structure for the south east, that works and that is based on maintaining services in the south-east region, and obviously wanting to protect the status of Waterford Regional Hospital.

Professor Fred Jackson, a spokesperson for the south east hospitals working group, has said that a key reform being proposed by the Department of Health involves the establishment of hospital groups in Ireland. His group believes that this proposal is consistent with the programme for Government and that it recognises the clinical networks which have already been established within the region. He went on to say that if implemented, the proposal would ensure that patients of the south-east region can access high-quality care on a timely, local and cost-effective basis and that is what the people of Waterford want.

There is certainly a need to realign some services, cardiac services being one example, across the south east. We do not have 24-7 cardiac care in Waterford Regional Hospital, for example. Some of the services are fragmented. There is an appetite within the region to build up capacity in the regional hospital but to do so in the best interests of all patients across the region. Obviously the hospital, like all others in the State, has suffered from cutbacks in recent years but I must put on record my appreciation of the staff and management of the hospital, who are doing their very best in difficult circumstances and are providing very good services to the people of the south east.

There is a genuine fear that there might be a proposal to create a new network which would link Waterford to Cork, with the possibility of services in Waterford Regional Hospital drifting away to Cork, which would not be in the best interests of the people of Waterford or the south east generally. It would also fly in the face of the logic of the Minister's attempts to ensure that people have access to world-class health services as close as possible to their communities, but also on a regional basis, where practical and appropriate. That is what we are seeking here.

The Minister is already aware of this issue and he received a copy of the submission. I appreciate that a review is being carried out across the country regarding hospital networks but I just wanted to put on the record the fear that many consultants, not just in Waterford, but across the south east have, of not maintaining a regional entity within the south east and of a drift of services towards Cork, under a new hospital network set-up. I look forward to the Minister's response and hope he will outline what he feels is the most appropriate way forward for the region.

James Reilly (Dublin North, Fine Gael)
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I thank the Senator for raising this matter and for the opportunity to clarify the position. Senator Maurice Cummins has also made several representations to me on this issue.

Under the programme for Government 2011-2016, the Government committed to developing a universal, single-tier health service which guarantees access to medical care based on need, not income. On foot of this commitment, the Government will introduce a system of universal health insurance. A key stepping stone to the new system will be to develop independent, not-for-profit hospital trusts, in which all hospitals will function as part of integrated groups. As a first step on that journey, these groups will be formed on an administrative basis. It is envisaged that this will take place from early 2013 onwards, with groups being constituted and becoming operational as soon as is feasible, depending on their readiness and capacity to do so. Groups will be established on the clear understanding that the groupings and their governance arrangements will be reviewed prior to 2015, to ensure an appropriate environment for the introduction of universal health insurance.

The rationale behind the establishment of hospital groups and trusts is to support increased operational autonomy and accountability for hospital services in a way that will drive service reforms and provide the maximum possible benefit to patients. Each group will have a single consolidated management team with responsibility for performance and outcomes. It is intended that non-executive boards, consisting of representative experts, will oversee each hospital group management team and will have responsibility for decisions in relation to services in all hospitals in the group.

In June this year I appointed Professor John Higgins to chair a strategic board on the establishment of hospital groups. Professor Higgins is head of the college of medicine and health at University College Cork. He has a deep interest in organisational reform and change management. He was the director of the reconfiguration of the health system in Cork and Kerry from 2009 to 2011 and he remains chair of the reconfiguration forum there. The strategic board has representatives with both national and international expertise in health service delivery, governance and linkages with academic institutions. On the advice of Professor Higgins, a project team was established to support the strategic board, consisting of Professor Higgins and the team who were previously engaged in the reconfiguration process in the south, as well as members of the special delivery unit and acute hospitals section of my own Department.

The project team is tasked with making recommendations to the strategic board on the composition of hospital groups, governance arrangements, current management frameworks and linkages to academic institutions. In order to be in a position to do this they carried out a comprehensive consultation process with all acute hospitals and other health service agencies. In carrying out this work, use has been made of video conferencing and meetings have been scheduled to coincide with the presence of international representatives in Ireland, in order to minimise costs.

The consultation process included two days of meetings with the hospitals in the south east, on 9 July and again in October. A significant number of submissions, including one from representatives of the south east, have also been received by the team. Work is ongoing on finalising a draft report on the recommendations for submission to the strategic board for consideration when it meets at the end of this month. When the board has signed off on this report it will be submitted to me and I will then bring it to Cabinet.

I assure Senators that in many areas the hospital groups can be described as marriages made in heaven, but in other areas, they are more difficult. I am aware that the issue of a hospital group in the south east is causing great concern to people in Waterford, Wexford, south Tipperary and Kilkenny. The rationale behind these groups is that we do not have the management expertise to cover the 49 hospitals individually but by having hospital groups, we will be able to get the expertise necessary to turn our hospitals around, as has been done in Galway and is being done in Limerick. We can certainly do it with between eight and ten managers and we can grow new management beneath them. The group system will also give local autonomy.

Recommendations will be made and a discussion will be had at Cabinet but the hospital groups will not necessarily be permanent. If it transpires that a group which looked like it would work at the outset does not work, there will be another opportunity to realign hospitals before the actual hospital trusts are formed. I hope that gives reassurance to people who might be concerned about this. We are still listening to and consulting with people and the draft report has not been presented to me yet.

David Cullinane (Sinn Fein)
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I have no difficulty whatsoever with hospital networks and agree they are necessary, based on the rationale outlined by the Minister, in terms of getting managerial expertise across a network of hospitals. The point is that in the south east, we already have a highly-effective regional network of hospitals, which provides a whole range of services, from cancer care, cardiology, acute trauma and orthopaedics and in many of those areas it is working well. In that context, if it is not broken, why fix it? What we need to do is develop capacity in the region and not see a situation where there is a realignment, even if it is on a temporary basis, of Waterford with Cork rather than the more natural regional alignment which prevails at present, with the existing clinical network teams. That is the argument of the consultants from Waterford and across the south east. I ask the Minister to be conscious of that when recommendations are made. Ultimately the Minister will have to make the decisions, based obviously on the information he receives but also on his own view of what is in the best interests of patients in the south east region.

James Reilly (Dublin North, Fine Gael)
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I am afraid I must say to the Senator that it is broken and that is why it must be fixed. The Senator's party might say that the budget is broken, but it is not, but I am not trying to score points here. The bottom line is that the health service is not delivering the level of care it should and could do with the resources at its disposal. It has always been a mystery to me that this is the case, given that we have some of the best doctors, nurses and managers in the world in our health service. Clearly, what is needed is a reorganisation of the system to make it a service for patients, which is the core of this. That is the outcome we seek. We want to see better outcomes for patients. As I have said on the record a number of times, we must look at outcomes, not inputs. If we do not improve the journey or the outcome for the patient then we are not doing anything that is worthwhile. The setting up of hospital groups will seriously improve things and I accept and acknowledge the Senator's support for the concept. It will address a whole raft of issues concerning recruitment, retention of expertise, sharing of expertise and particularly, having patients at the lowest levels of complexity treated as close to home as possible.

I hope I have clarified the position. I will continue to listen to what those who work in hospitals and, most importantly, use hospitals have to say.

John Kelly (Labour)
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Before I was elected to the Seanad, apart from being a county councillor, I was a community welfare officer for 28 years, during which time I dealt with medical card assessments. I predicted that problems would arise with the centralisation of the medical card system to the primary care reimbursement service, PCRS, in Finglas. I cannot blame the Government for the centralisation decision because it was made by its predecessor.

The medical card guidelines are often interpreted differently by the PCRS than under the old, locally based system. For example, car loans were allowed to be considered under the previous medical card guidelines where a certificate could be produced to show a medical need to have a car. The guidelines state the HSE must have regard to a person's overall financial position. They do not refer to car loans, but the practice was to take them into account in cases of medical hardship. They permit home improvement loans to be considered, but there could be a situation where a woman decides to upgrade to a modern kitchen that she may not need because it looks nicer. Such a loan would be allowed to be considered, but people need their cars to get to work. A car is not a luxury in such circumstances. Many double income families own two cars and most of them have car loans. Furthermore, where a family relies on two cars to travel to work in different directions, an allowance of ¤50 per car should be taken into account. In most cases, however, the PCRS is only allowing for one car.

The PCRS is also interpreting child care costs differently. The guidelines state outgoings on child care are allowable, provided they are necessarily incurred in taking up or continuing in employment or education and training, or in providing family supports. Appropriate documentary evidence is required to ensure the costs claimed are reasonable and being incurred. The medical card application form asks for the name and address of the child's creche or childminder. Previously, if a neighbour or friend looked after the children, it was acceptable for him or her to state in a letter how much he or she was being paid. However, the PCRS will only accept such letters from registered childminders, even though the guidelines are silent on this issue.

As a Senator, I am doing as much work on medical cards as I did during my 28 years as a community welfare officer because of all the problems that have arisen. An individual who was refused a medical card was recently referred to me for advice. He brought his income calculation sheet to our meeting, but he had only studied the first page, which stated he was not entitled to a medical card because he was over the limit. I asked him to show me his P60 which indicated that he had earned ¤19,500. His wife was in receipt of maternity benefit and they had a mortgage, which meant they were under the limit for the receipt of a medical card. He was told that he was over the limit. Understandably, the PCRS has since reversed its decision.

I ask the Minister to address the issues of child care costs and car loans, which are necessary and were allowed to be considered in the past. Somebody needs to tell the PCRS that while it may want to do business its own way, it is dealing with people for whom these costs were previously allowed to be considered when deciding on medical card applications.

James Reilly (Dublin North, Fine Gael)
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More than 1.8 million medical cards have been issued to individuals, the highest number in the history of the State. It represents an increase of approximately 500,000 since the end of 2008. It is expected that the provision of GP services and prescription drugs under the general medical services scheme will cost almost ¤2 billion in 2012. We have already issued a further 35,000 medical cards this year than we had budgeted for.

Under the provisions of the Health Act 1970, medical cards are provided for persons who, in the opinion of the Health Service Executive, are unable without undue hardship to arrange GP services for themselves and their dependants. Under the legislation, determination of eligibility for a medical card is the responsibility of the HSE. The assessment for a medical card is determined primarily by reference to the means, including income and reasonable expenditure, of the applicant and his or her partner and dependants. The HSE has produced national assessment guidelines to provide a clear framework to assist in the making of reasonable, consistent and equitable decisions when assessing an applicant under the general medical services scheme. The guidelines are publicly available and can be downloaded from the HSE's medical card website.

There is no automatic entitlement under the 1970 Act to a medical card on the basis of a specific illness. However, there is provision for discretion for the HSE to grant a medical card in cases of undue hardship where the income guidelines are exceeded. The HSE has set up a clinical panel to assist in the processing of applications for discretionary medical cards where there are difficult personal circumstances. It has also established a specific system for the provision of emergency medical cards for patients who are terminally or seriously ill and in urgent need of medical care which they cannot afford. These emergency medical cards are issued within 24 hours of receipt of the required patient details and a letter of confirmation of the condition from a doctor or medical consultant. This system is initiated through the local health office by the office manager.

Every year the HSE processes in excess of 500,000 applications for medical cards and GP visit cards. It centralised the processing of all medical card applications and renewals at the its primary care reimbursement service with effect from 1 July 2011. This established a single uniform system of assessment for all applicants to replace the various systems which previously operated through more than 100 local offices across the country. I am aware that difficulties with the centralisation project gave rise to a large backlog and long delays for both new applicants and those seeking medical card renewals earlier this year. However, the HSE has taken a range of actions which completely eliminated the backlog of almost 58,000 applications from earlier this year and confirmed that over 95% of complete medical card applications and renewal forms are now being processed within 15 working days. It has also implemented a range of changes to the application procedures which have improved the process for applicants.

John Kelly (Labour)
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I do not doubt that the person who wrote the Minister's response has five years of experience in dealing with health related matters, but I have 28. I take the Minister's point that 1.8 million people have medical cards, but that does not mean someone should be refused a medical card if he or she is entitled to receive it. I do not want to see a repeat of the response often given to those who apply for carer's and invalidity benefit in kicking the can down the road for one year or more before the applicant eventually receives his or her entitlements.

The Minister failed to mention child care costs or car loans. The guidelines are as clear as crystal. Child care costs and car loans are specifically mentioned as allowable, but the PCRS is refusing to take them into account. I ask the Minister to follow up with the PCRS to ensure clarity on how it is reading the guidelines.

James Reilly (Dublin North, Fine Gael)
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I acknowledge that the Senator has raised issues in this regard.

Significant latitude was shown over the years, in the case of car loans and other loans, when the country was awash with money. We do not have the money now. We have 1.8 million people on medical cards and another 120,000 or more on GP cards. We want everybody in this country to have free GP care and we are moving towards that. However, there was no consistency across the country with regard to all the allowances allowed in the past. I will revisit the issue with the Senator, but as things stand the GMS is a demand-led scheme and the latitude shown in previous years is no longer open to us because we do not have the money.