Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

698. To ask the Minister for Health his views on whether the introduction of a prospective case based payment system for hospital services using the existing diagnostic related grouping system would result in savings arising from increased efficiency/productivity of 5%; if he will provide details of the pilot project carried out in 2013; and if he will make a statement on the matter. [36423/13]

James Reilly (Dublin North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Money Follows the Patient Policy Paper, which I published for consultation on 15 February last, outlines the Government’s plans for the introduction of a prospective case based payment system for hospital services using Diagnosis Related Groups (DRGs). This new funding model will mean that hospitals will be funded on the basis of the quantity and quality of the services they deliver to patients and not the size of last year’s budget. Encouraging hospitals to use the resources at their disposal more efficiently is one of the central objectives of the MFTP system.

A pilot prospective funding programme has been in place for certain elective orthopaedic work (four DRGs covering primary hip and knee replacements) since July 2011. Seven hospitals initially participated with a further five hospitals joining from January 2012. The pilot operates by reducing current budgets by an amount of money that relates to the four DRGs. This portion of the budget is then “earned” back based on work carried out in the hospital. There is no change to any other portion of the hospital budget.

The project has been reviewed twice, with the most recent report completed in December 2012. This report highlighted a number of efficiency related benefits including significantly reduced average lengths of stay, increased numbers of day of surgery admissions, and an increase in the number of discharges at the weekend. While the level of improvement varied across the different hospitals and the different DRGs, all showed significant improvements in these key determinants of hospital efficiency and productivity.

This pilot is the first example of Money Follows the Patient in operation in Irish hospitals and is a useful exercise in highlighting the benefits that can accrue as a result of these types of funding arrangements. It also provides useful lessons in terms of systems and process requirements as well as the need for stakeholder buy-in ahead of roll-out to the wider hospital system. It is intended that the orthopaedic project will continue until the end of the year at which time the aim is to commence full phased implementation of MFTP.

While it is not possible to specify a percentage increase in efficiency that will result when MFTP is rolled out across all public hospitals, I am confident that its introduction will drive efficiencies in similar areas to those evident in the orthopaedic project. This will help to deliver a more efficient and productive hospital system.