Jack Chambers (Dublin West, Fianna Fail)
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224. To ask the Minister for Health if he will clarify comments he made in a speech on 22 March 2017 to the Select Committee on the Future of Healthcare in which he indicated he wanted to strengthen incentives for providers to effectively respond to unmet health care needs; the providers he had in mind; the incentives in place that he was referring to; the future incentives he is planning and the detail of same; the meaning of ramping up activity-based funding; the activity-based funding measures currently in place; and if he will make a statement on the matter. [17170/17]

Simon Harris (Wicklow, Fine Gael)
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At a meeting with the Committee on the Future of Healthcare on 22 March 2017, I outlined my views on the future direction of the health service and a number of key priorities that I believe should underpin that direction. One of the priorities that I highlighted was the need to strengthen incentives for providers to effectively respond to unmet health care needs by ramping up Activity Based Funding (ABF).

An ABF system is currently being introduced in public acute hospitals on a phased basis. The introduction of ABF represents a fundamental change in how healthcare is funded in Ireland. Implementation of the funding model involves moving away from inefficient block grant budgets to a new system where hospitals are paid for the actual level of activity undertaken, subject to budgetary limits. As such, there will be a fundamental shift from funding facilities and settings to instead funding episodes of care. Other key benefits from the introduction of ABF include increased fairness in resource allocation, improved efficiency and increased transparency.

January 2016 represented a major milestone in the implementation process because the ABF system was introduced for inpatient and daycase activity in the 38 largest public hospitals. This means that hospitals are now being incentivised to pursue the most cost-effective means of achieving their performance targets while remaining within their overall budgetary ceilings. By operating more efficiently, hospitals will have the opportunity to maximise the delivery of activity within their overall budgetary ceilings, thereby helping to tackle waiting lists and address unmet need.

While the implementation of ABF is currently focused on inpatient and daycase activity, the Government is clear that journey must not end there. Instead, it is vital that the funding model continually evolves so as to create the correct incentives for the delivery of optimal care for the Irish population while avoiding the introduction of perverse incentives. For this reason, the ABF model will continue to evolve on a phased basis over the coming years to encompass other aspects of hospital services, such as outpatient activity, before extending into community services. This is being done in order to incentivise the delivery of care in the most appropriate settings. As part of the process of achieving this objective, my Department is engaging with the HSE in relation to the development of a framework for costing community care services.

I am also committed to using the ABF model to incentivise other health system objectives such as improving the quality of care and integration of care across different settings. During the implementation process, my Department and the HSE will continue to learn from the experiences both of our own system and other jurisdictions in order to ensure the effective implementation of this important reform.