Service will struggle to meet demands-HSE

Health Minister James Reilly has said the HSE's budget restrictions for 2014 represented an unprecedented challenge for the Irish health system.

He told the Oireachtas Health Committee this evening that significant improvements had taken place in productivity and services in health against a background of a 20% cut in health spending in recent years.

At the Committee hearing, HSE Director General Tony O'Brien denied that there was provision for €1 billion in health cuts this year, even though the two deficit and savings figures stated amount to well over this amount.

He admitted that some service priorities and demographic pressures may not be met, and it would not be possible this year to meet fully all of the growing demands on our health services.

Mr O'Brien said the planned €108 million in unspecified pay savings would be brought about through flexibility measures under the Haddington Road pay agreement, and there would be no additional measures other than those already agreed under Haddington Road.

The Committee was told there there was a savings target of €619 million identified for the HSE this year, in addition to an underlying projected deficit of €419 million. 

The original savings target for the medical card scheme had been reduced from €133 million to €23 million, the Minister said.

He said following a review he had initiated, it was found that the original probity target had not taken into account the extent of savings that already had been achieved or could be achieved through medical card applications scheme centralisation and probity measures without changing the current guidelines for medical cards.

He said the previously quoted probity savings figure of 113 million had been based on an estimate in a PWC consultants' report of €65 million to €210 million in possible savings, but this figure had been 'indicative and speculative'.

Minister Reilly denied that medical cards were being indiscriminately withdrawn.

He admitted the wording of the draft HSE service plan had been changed prior to its publication before Christmas, but this was because it had been possible to agree additional funding of €47 million at cabinet committee level.

Mr O'Brien also admitted the version of the introduction of the draft service plan that existed prior to it going to the cabinet committee had been changed. He said the reference he had made in the draft plan to critical service pressures had been deleted after it emerged that this risk no longer existed following decisions made on the health budget at cabinet committee.

Minister Reilly said a number of reform measures would be progressed this year, including 'money follows the patient', where hospitals would be funded based on activity levels, the interim establishment of a patient safety agency, and the reorganisation of hospitals into groups.

Mr O'Brien said there was an underlying projected deficit of €419 million for the HSE in 2014, in addition to the €619 million savings target for this year. The key message is that patient safety is paramount, he said.

Fianna Fail Health spokesperson Billy Kelleher told the Committee that the health service was facing an overall reduction of over €1 billion this year. However, Mr O'Brien denied there were cuts of €1 billion, but there would be a 'swing' of this amount.

"The health service is facing a very significant financial challenge in 2014. This challenge comes at a time when the demand for health services is increasing every year, which in turn is driving up costs," Mr O'Brien told the Committee.

He told the Committee hearing on the HSE's 2014 service plan that said savings measures to be implemented included:

* A reduction in the lump sum provision for pensions which will be used to offset, in part, the incoming deficits from 2013.

* Making use of savings which will accrue from the phased implementation of new developments during 2014.

* Additional savings targets of €12million in areas such as procurement (€30 million), shared services (€10 million), value for money initiatives (€1million), hospital reconfiguration (€7.million), energy efficiency savings (€15 million) and 'full delivery of cost containment plans of €56.million for hospitals'. Hospitals also have to deal with a 'run-over' deficit of €190 million from last year.

Mr O'Brien said other measures would include pay and flexibility reductions totaling €268 million, of which Haddington Road would facilitate up to €140 million - €108 million of this related to 'unspecified savings'.

He said if the unspecified savings figure was not achieved, there was no mechanism in Haddington Roadd to seek cuts elsewhere. If the pay savings were not acheived, there was a process within Government to have those issues addressed.

Sinn Fein Health spokesperson Caoimhghin O 'Caolain said there had been no additional funding made available this year for nursing home places.

Mr O'Brien said the reduction in the health service budget between 2008 and 2013 amounted to €3.3 billion and when coupled with reductions in 2014, the total budget reduction over six years amounted to almost €4 billion.

He said among the initiatives that had been postponed for cost reasons this year were the BreastCheck scheme and a restructuring of the dental treatment scheme.

HSE plans for a grim future



[Posted: Tue 14/01/2014]


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