Mary Upton (Dublin South Central, Labour)
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Question 97: To ask the Tánaiste and Minister for Health and Children if her attention has been drawn to the fact that St. Columcille's Hospital, Loughlinstown, County Dublin, has been penalised €1 million of its 2005 budget; her views on the fact that a hospital that provides for a large number of elderly patients is losing out; if she will review the casemix system to ensure fairness; and if she will make a statement on the matter. [4241/05]

Mary Harney (Dublin Mid West, Progressive Democrats)
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Casemix is an internationally accepted management system for the monitoring and evaluation of health services. It allows for the collection, categorisation and interpretation of hospital patient data about the types of cases treated. It assists hospitals in defining their products, measuring their productivity and assessing quality. It is used as part of the budgetary process to base funding on measured costs and activity, rather than on less objective systems of resource allocation, and to fund hospitals based on their mix of cases. It is used in a broad way when considering investment options with the acute hospital sector, bed capacity and the national treatment purchase fund.

The programme operates in 37 hospitals in Ireland. It involves over €3 billion of expenditure and 1.6 million patient encounters each year. Ireland operates a budget neutral policy, which rewards efficiency by retargeting funds from less efficient hospitals to those which have demonstrated that additional funding will result in real benefits. The negative adjustment of €1,055,679 in the case in question was a reflection of the hospital's performance vis-À-vis its peers, following full compensation for its unique local circumstances and mix of cases.

The casemix system allows hospitals to take full account of their unique patients and unique issues, including elderly or other patients with a long length of stay. Hospitals are not penalised for excessive length of stay. Credit is given for all long stay patients, regardless of reason. Hospitals are not given a profile of patients whom they must treat. They are judged on their efficiency in treating cases, relative to their peers. The entire process takes place in consultation with each hospital. Patient centred information is at the centre of the process. The Department reviews performance across the public hospitals. It discusses the results with hospital management to encourage performance and value for money improvements.

The national programme will be significantly enhanced and expanded on foot of a recent review of the casemix system. That will allow it to be applied to all acute hospital encounters and all acute and sub-acute hospitals by the end of the decade. At least 50% of acute hospital funding will be based on peer group related casemix performance for the 2008 financial allocations.

This development in the system will greatly enhance resource allocation, evaluation of investment and value for money aspects in the health sector. I am committed to performance related targets. Casemix is the most internationally accepted performance related acute hospital activity programme. It will be used as a central pillar in all acute hospital funding policy.