Written answers
Thursday, 19 December 2013
Department of Health
Health Services Reports
Billy Kelleher (Cork North Central, Fianna Fail)
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329. To ask the Minister for Health if he will detail in tabular form the recommendations contained in the 2012 reviews of financial management systems in the Irish health service; the progress made in implementing these recommendations; and if he will make a statement on the matter. [54774/13]
James Reilly (Dublin North, Fine Gael)
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A Review of Financial Management Systems in the Irish Health Service, commonly known as the Ogden Report, was undertaken in 2012.
The review was commissioned by the Secretary General of the Department of Health. Its overall intention was to review the state of the financial management system in place in the health sector in Ireland at the time in the context of the serious overruns projected to occur in 2012, the continuation of a challenging financial environment for the foreseeable future and the radical reforms envisioned in the Programme for Government.
The report made a number of recommendations to improve the financial management process within the HSE, with particular reference to managing the transition phase that the health sector was undergoing. The recommendations were grouped into 3 distinct areas: Improving Financial Performance; Policy Considerations; and Effective Transitioning (Managing the Change). These are set out in the attached table.
As part of the process of further strengthening the financial management of the HSE, additional independent expertise was engaged to evaluate the financial performance management system and a Finance Reform Board has been established comprising the HSE Director General (Chair), senior HSE management and representatives from my Department and the Department of Public Expenditure and Reform.
Proposals regarding the development and roll out of an integrated financial management system have been endorsed by the Board, with my full support and approval, and the HSE is now finalising a business case for submission to the Department of Public Expenditure and Reform.
A REVIEW OF FINANCIAL MANAGEMENT SYSTEMS IN THE IRISH HEALTH SERVICE
Main Recommendations
| 1. Improving Financial Performance | - |
|---|---|
| 1.1 | Review and clarify the National financial accountability arrangements. |
| 1.2 | Enhance the core financial management capability of the system, through Building on the capacity and capability in the Department of Health; Developing a clear organisational strategy to prepare the financial system for hospital groups; and Designing a programme to upgrade financial capability. |
| 1.3 | Provide immediate clarity to the system for 2012 on what will be funded nationally and what is a local responsibility for resolution. |
| 1.4 | Agree financial control target ranges for each region for 2012 consistent with national agreements. |
| 1.5 | Develop a strategy as a priority to establish the technical ICT infrastructure and management capacity required to support a single financial information system. |
| 1.6 | Develop systems for measuring cost containment, avoidance, and reduction within the non-hospital sector. |
| 1.7 | Review the process and transparency of forecasting, with best practice methodologies researched and adopted. |
| 1.8 | Develop a supply chain excellence programme to underpin the full establishment of shared procurement services within the health system. |
| 1.9 | Accelerate plans to develop a system wide procurement ICT system and shared service. |
| - | 2. Policy Considerations |
| 2.1 | Review the process of managing deficits and surpluses urgently and establish a new concordat between the centre, regions and organisations to enshrine the principle that deficits and surpluses will ‘lie where they fall’, with the appropriate consequences for local leaders in terms of autonomy and control. |
| 2.2 | Review the allocations process and policy for 2013 – 2015 |
| 2.3 | Develop a strategy of stabilisation for hospitals |
| 2.4 | Develop a suite of metrics to manage the financial and operational performance in community and primary care services. |
| - | 3. Effective Transitioning (Managing the Change) |
| 3.1 | The present period of transition is a period of maximum risk and clarity is required urgently on the leadership arrangements that will obtain through the transition period. |
| 3.2 | Create a formal accountability framework based on the new incentives and governance arrangements at every level, and re-affirm accountability within the immediate system, through the transition phase into the future system. |
| 3.3 | Create a single quality assurance process to ensure savings both now and in future are delivered safely, with full involvement of the clinical community. |
| 3.4 | Model the impact of the clinical programmes in a more sophisticated way. This needs to be factored in to the service planning and budget allocation process for 2013 – 2015. |
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