Annual Financial Statements 1994-1998: Mid-Western Health Board.

Mr. S. de Burca (Chief Executive Officer, Mid-Western Health Board) called and examined.

Acting Chairman

We are about to examine the annual financial statements 1994-98 of the Mid-Western Health Board. I must advise witnesses that they do not enjoy absolute privilege. Their attention is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunity of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. I welcome Mr. Stiofán de Burca, chief executive officer, and ask him to introduce his staff.

Mr. de Burca

I am accompanied by Ms Angela Enright, finance manager in the finance department; Mr. Mike Truelove, director of finance; Mr. John O'Brien, assistant chief executive officer; Mr. Ger Crowley, assistant chief executive officer; Mr. Tom Hourigan, assistant chief executive officer, and Mr. Duncan Lewington, our internal auditor.

Acting Chairman

You are all most welcome. As you are aware, we have already heard from the officials from the Department of Health and Children. I ask the Comptroller and Auditor General to introduce the accounts.

Mr. Purcell

Five years' accounts are before the committee for its consideration. As you clarified earlier, that is more down to the operation of the committee and the difficulties it has had in scheduling its work, rather than to problems with the health board supplying and furnishing the accounts on time.

By and large, the board has been given a clean bill of health, from an auditing point of view, over the years, other than for some of the general problems experienced by all health boards in the mid-1990s, and certainly since I took over responsibility for its audit. I am referring to matters such as the recording and accounting for fixed assets, where there were initial teething problems in all boards. There were also initially problems with control over pharmacy stocks. There was also, as we mentioned in the case of the Midland Health Board, a general problem relating to the administration of patients' property accounts.

The board has been diligent in addressing these and other problems that have been raised over the years. I am happy to report I was in a position to give a clear audit certificate on the 1998 accounts. That is a testament to the efforts of the board on the financial administration side.

Acting Chairman

I invite Mr. de Burca to make an opening statement.

Mr. de Burca

I had the privilege at the end of 1997, during a time of very significant change in the health sector and particularly given the terms of the 1996 Act, of having the opportunity to make accountability a real issue in the health sector. Over the past two years, our primacy of action has been developing a new organisation structure which focuses on local units of accountability. We had a certain amount of success in the past with changing from institutional to community services in the mental health sector.

At this point, we have devolved human resources, finance, IT and technical services. The importance of this is that at the corporate level, given the complexity of our organisation, accountability has to go through the whole system. It is not sufficient for a chief executive officer to feel that he alone can be the accountable person. Accountability has to be shared. Hence we have brought accountants and HR specialists into hospitals to support general managers and nursing managers, in terms of developing their skills in finance, human resources and so on. The accountability issue is a very important one for us. It also links with the national health strategy, which has the underpinning principles of equity, equality and accountability.

The other strategy we feel very strongly about and try to support very significantly is the raising of standards of care. We have taken a number of initiatives in that area over the years. We run the national database and the Irish clearing house, which derives from the European clearing house. We also have major involvement nationally and internationally in quality. We are not saying we are perfect. However, we make statements about what we believe the health sector must become - a highly accountable, transparent service, proving its performance. That is a long haul because it involves a new culture which must engage clinicians.

That is one of the major tasks we have, in terms of accountability. These are the people who make major determinants on spend in the first instance and not managers. Managers can contain the overall budget parameters and policy. However, the clinician makes the decision to spend. It is important that we engage them as managers, as well as clinicians, within the system.

I acknowledge Mr. Purcell's very kind remarks. A lot of effort has gone into improving our fixed assets and keeping the register up to date. Our debtors are now much better managed than they were in the past. We learned a lot from theC&AG's office and we appreciate their work with us.

I welcome Mr. de Burca and his staff. It appears there is some dissatisfaction with the recording of fixed assets. Will Mr. de Burca comment on that?

Mr. de Burca

Our fixed asset register of equipment has been remarkably updated due to the opportunity that arose with Y2K. In regard to land and buildings, we operate current accounting standards, as prescribed by the Department of Health and Children. I am not quite sure what difficulty the Deputy is alluding to. Our concern, at one stage, was to ensure we had a current fixed assets register. That required us to look at our valuations and make sure the depreciation rules for buildings and equipment were applied. What problem is the Deputy referring to?

I understand from the Comptroller and Auditor General that there was some problem with it and on that basis——

Mr. de Burca

There was a problem early on, which I readily accept. In 1995 we were chastised for not having a fixed asset register. However, we have taken steps over time to deal with that.

Do you have any problems with control of pharmacy stocks at present?

Mr. de Burca

Not at present. I am very happy to say that, while we had a delay in getting our cliniscript - which is a modern system in use in most of our hospitals - fully installed, it is now fully installed. All of the instant on-line data required to check our levels on issues, buy ins and so on are now in place.

You mentioned that you have raised your standards. Could you give us a brief outline of how the raising of your standards has impacted on the waiting lists and waiting times for patients?

Mr. de Burca

The waiting list initiative is a very significant investment in meeting what is a continuous and cyclical flow of patient referrals. During 1998-99 we reduced our waiting lists in our adult group by 25%. Part of that was due to our compliance with the Department of Health and Children's working group on the waiting lists initiative, which required us to take a much more holistic approach to the problem of waiting lists and times.

There is no single solution available to us. We must look at this in terms of the whole system of care, such as what is happening in the primary care area, that is, general practitioners and whether they manage effectively. General practices which are multi-stakeholders, with more than one GP supported by practice nurses, must have access to good diagnostic systems in hospitals. In other words, the primary care system must be highly effective. Otherwise, people are dependent on acute care. There is a very good experience in England where, using GP fund holding, prioritisation of access for orthopaedics - hips, knees and so on - is determined by the GPs' purchasing according to their priorities, rather than having priorities determined by the consultants in hospitals. This is the critical issue of control which we have in this country, that is, is the decision to admit a decision for the consultant, a clinical decision?

In regard to our waiting times - these are all specialties - both within specialty and between specialities, you will see a variance in performance. For instance in ENT, one ENT surgeon may have a waiting list of 15 and another may have a waiting list of 227. You may see waiting times varying within the specialty itself. That really demonstrates that all these decisions are individual decisions by clinicians. It may relate to their age, productivity, clinical skills capacity, time of life or a whole variety of things. These are areas in which we are becoming more invasive, although that may be a strong word. We are certainly becoming more aware of them and are challenging them.

A particular venture in which we engaged to demonstrate how a much more proactive assessment can make a difference was in the area of orthopaedics. We engaged a nurse with special interest in orthopaedics using a particular type of protocol for assessment which effectively reduced by half the waiting list. In other words, people make assumptions about what is a waiting list opportunity or person. The reality is that unless you know clinically the conditions and maybe the social circumstances of the person, you are simply loading numbers in. This has been very well demonstrated by this protocol which we successfully operate in orthopaedics. We will be using a similar type protocol in all the other specialties.

You will find in most of the international literature that people see solutions more in terms of being focused on one's specialty, but also by looking at what happens before and after the treatment regime - for instance, in elderly care where people go with problems with their eyes like cataracts and so on. How soon that intervention is made and how soon that treatment is effected affects the quality of life of a person very significantly.

Our issue is and our focus is on how we can encourage clinicians to look at their practices critically which means, in essence, that they have to audit their practice. We have to create a culture and a climate in which audits can take place. That is why we attempt, in our own corporate interest, to try to merge - it is early days yet - the interest as normally and traditionally presented by the Comptroller and Auditor General, which may be a traditional perspective which is changing so that we get more systemic and more total in our view of what we say about audit in relation to clinical practice, the cost of clinical practice and whether it is clinical cost effectiveness that we want get to.

Information systems have to become more mature. People have to get much more involved with us in recording and monitoring. We have daily print outs for each consultant in relation to bed utilisation and activity. They are now getting that information in relation to their performance and waiting lists. With the current initiative by the Minister and his Department we hope we will be able to meet the challenge of maybe reducing further - 25% - our waiting lists in the current year. Maybe it is a noble aim but we will have a go at it.

I thank Mr. deBurca for a very comprehensive reply to my question. I would like to ask a final question about a general problem across the health boards - patients accounts, that is, those with no next of kin. What is your position on that?

Mr. de Burca

Our position on that is our compliance with the Department of Health and Children's instruction to us and the advice of the State solicitor to make payable to him dormant accounts, the value of which is under £8,000, which was made in 1998. Obviously, there is a difficulty in relation to higher sums because they have to be dealt with on an individual basis, as I understand it.

On the general problem, which is a recurring issue which I know from the auditor's reports, we are in, let us say, astatus quo position. We are in constant discussion with the Department because £2 million has been invested. We renewed and renegotiated our interest rate recently at 3.75%. It is money that is simply accumulating.

In regard to individuals, we have a very definite policy, that is, to trace the next of kin. When you have an admission to hospital, you make an entry and trace all the possible known family or kinship. When that person dies, you will look for practical clues about what is happening. The undertaker will normally, if he has been commissioned, so to speak, to deal with the bereavement, be an immediate contact or information point. We use our community welfare officers. These people are usually well dispersed in areas and are very much community people. They know the parish and all the connections. One does this exhaustive run and, at the end of the day, we deal with the people who have traditionally been managing, as trustees, their accounts for them. We are talking about people in long stay institutions, both mental hospitals and geriatric hospitals. In the case of psychiatric hospitals, as we all understand, people have long lost track of kinship for a lot of unfortunate social reasons.

We are in a frozen state on this issue. We invest the money and make our administation charge based on the administration or the processing and management of that account. There is little more we can do with it. We wish we could hand over money to people who can establish a claim but I am sure the State will address this in due course.

Acting Chairman

I would like to ask the officials from the Department about the up to date position on the question which has been just raised. I appreciate we had papers from you on 8 and 15 January 1998 and on 26 February 1998 but I would like to hear the up to date position.

As the Comptroller and Auditor General said earlier, considerable work has been done on addressing the patient private property area. The situation is that a report was agreed by a working party containing a set of recommendations which were to be implemented nationally and those recommendations have been given to the directors of finance in the health boards and they have been putting them in place. The new protocol, the new arrangements in place, involve the Chief State Solicitor's office because there are matters of legal substance in relation to people who die intestate under the succession Act and so on. It is up to the Chief State Solicitor's office to make the determinations and to make decisions in individual cases.

We have very detailed protocols in place with the safeguard of having the Chief State Solicitor's office involved in the overall administration of the situation. You mentioned the two previous papers which have been given to the committee on this matter. If you wish, we could prepare another paper updating the position.

Acting Chairman

I would appreciate that Mr. O'Toole. As you may recall, it was pointed out in the first paper that the introduction of a uniform system throughout the eight boards was being considered and it was hoped those deliberations would conclude before the end of that year and that the policy would be introduced in early 1999. I would appreciate an update on that for Members.

We will do that.

Acting Chairman

I hope it will not put too much pressure on you but we usually impose a deadline for the supply of papers because in the past, people understood the request to be open ended. Maybe we could have that paper within the coming month.

We will do that.

What is the total population in your catchment area?

Mr. de Burca

It is 315,000.

Have you worked out whether you have an adequate staff complement relative to the population to meet modern health requirements?

Mr. de Burca

I would not measure it in that regard in that our sense of how we relate to our population is very much based on our mission, which is health and social gain. We look at population in terms of ourper capita investment in terms of acute beds, specialties, whether community or regional specialties and so on. Could I give you some information?

When I hear about information, I always get worried, especially if I did not ask for it. There are international norms laid down in regard to the population and demographic trends, etc., whereby X, Y and Z are determined to be the optimum, or as close as possible to that in terms of delivery of the major services. I am worried about digressing into the area I suspect you are going into——

Mr. de Burca

No, I will keep myself grounded today. Some 330 acute beds per 1,000 of the population would be an Irish norm. In Europe it would be 400 beds, in the UK it is as low as 200. We are more like the UK in the mid-west region at 244 beds or thereabouts. That gives us a rather crude indicator, assuming that variables such as populations and mortality are similar.

We would say that in the mid-west region there is an under provision of acute beds. Part of that is attributed to the fact that in the period from 1986 onwards, during the hard times, we lost 170 acute beds. We see that in terms of pressure on our waiting lists and current interest by the private sector wishing to invest in a private hospital in the area.

In mental health there are norms, international and otherwise, on provision. The model must then be considered because we are no longer working on an institutional model. We talk about community models. One consultant per 25,000 of population is the Irish norm since 1984, but since that time we have broken away into some specialties, including child psychiatry, old age psychiatry and so on. Part of our way of looking at things is in terms of specialty per population. In the case of the elderly we look at the number of geriatricians. Beds for the elderly is very topical and is a cause of concern for political representatives and the elderly community. In 1988 a working party gave a norm of ten beds per 1,000 elderly for continuing care, but in our region we have 38.4 beds per 1,000 elderly.

So much for the norm that was established at that time.

Mr. de Burca

It is a good point in terms of illustrating how things change and how it is necessary to localise things.

With regard to the various disciplines, such as the medical, surgical and general, to what extent have you now identified the requirement, and can you do so? From my time as a member of a health board one difficulty was the ability to form a plan accurately and to recognise a thing before it happens, because there is no use in planning for the day after it happens because it is too late.

Mr. de Burca

For the last ten years we have been working within the parameters of a medical manpower plan, which was determined by Comhairle na n-Ospidéal. We are very clear, therefore, in our tracking of the nature and number of specialties required to develop our service. A Galway base is a super-regional service in terms of many of its services, likewise Cork. We are not a super regional provider. We look to Cork for dermatology, neurology, rheumatology and so on, but we would see that our population norms would require fully manned services around those specialties.

Are all your consultancy posts filled at present?

Mr. de Burca

Yes.

Have you any difficulty recruiting?

Mr. de Burca

Not in my experience. We recently recruited three new consultant anaesthetists. We have also recruited consultant psychiatrists and in old age psychiatry.

What about nursing?

Mr. de Burca

There are not real problems in my area.

Are any wards or units closed due to lack of facilities? The general public criticism of the system centres on the waiting lists. There are a variety of causes of waiting lists, most of which you have referred to. Lack or utilisation of existing facilities is another cause. To what extent, if any, do you have facilities that are not being utilised at present?

Mr. de Burca

None at present, but, unfortunately, we have seasonal closures on an annual basis. That goes back to the hard times and has continued up to now, but I am happy to say that the Minister has given us an opportunity to try and rectify that. He has indicated that one of his priorities is to deal with the issue of seasonal closures. One of our proposals we put to the Department was to deal with a continuing sore in the system and at the same time use this opportunity to improve on our waiting lists.

How are you in relation to orthodontics?

Mr. de Burca

We share that problem with every health board. We were the initiator of the consultant orthodontic service in the mid-western region. Our service provided training for all of the other area services. Unfortunately, issues arose around accreditation, training and the private sector. I would not wish to comment too much on that. There is a waiting list of 1,341 for orthodontic treatment, while it is 2,388 for assessment. These are based on a protocol for assessment. It is an issue that is being addressed by the Department. There is the Moran report. The Deputy will be familiar with Billy Moran, who produced a report on orthodontics.

In 20 years orthodontics have been the bane of my life. I have not seen anything that goes even remotely close to tackling the problem. That is not a criticism of anybody involved, but by comparison with other countries, we do not seem to be able to hack it. For example, in the US, while it may be a private system, people have access to orthodontic services to a far greater extent than youngsters here.

Mr. de Burca

That is a major problem. Issues around training, levels of training and at consultant level are involved. There is also a salary issue. Our consultant orthodontists are not rated equal to other consultants. There is also the issue of the private sector. Again, I must be careful about commenting too much on this, but they can determine their own rates. We hold the view that the training of our public dental orthodontists is higher and in many instances is of a far higher quality. This issue is currently being addressed by the Department in its response to the Moran report, which we expect to be published shortly.

There is a waiting list of 2,300 for assessment. Is that correct?

Mr. de Burca

Yes.

It is 1,300 for treatment. Is that correct?

Mr. de Burca

Yes.

They have been determined and categorised, etc.

Mr. de Burca

Yes.

Are any of them getting treatment already?

Mr. de Burca

We have continuing services. A good consultant orthodontist will do 300 to 400 procedures in a year.

Of the waiting list of 1,300, are any in receipt of treatment now, or are they waiting?

Mr. de Burca

They are waiting.

How does your board operate in terms of group procurement? Have you central purchasing?

Mr. de Burca

Yes. We have a regional materials management, which deals with 40% of our contractible non-pay items. It has been in existence since April 1998 and is a very valuable resource to us relative to savings initiatives and efficiencies. Every year we are required by the Department to achieve an indicative saving, for instance, this year it is £771,000. Having competent professionals who can track that in terms of the indices they are creating within their own practice and identifying specific value for money items means that we at least beginning to account for what we have spoken about in qualitative terms in the past. Most of our procurement is now at that level.

Are you drawing from a national or a regional grid?

Mr. de Burca

There is a national materials management board and each region has a regional materials manager. They connect and there are opportunities - this is the intention - for major savings through national bulk purchasing.

Has it been the policy not to include any areas in that group?

Mr. de Burca

Certain clinical products.

Mr. de Burca

It may be that they have not reached it. The more significant one would be pharmacy and drugs.

Is that covered?

Mr. de Burca

That is not covered.

That is peculiar. I would have thought it would be the first to be covered.

Mr. de Burca

We spoke earlier to Deputy Gildea about pharmacy stock, which is within the province of the pharmacists' profession, who are skilled in procurement in that area. The Deputy's point, in fact, is well taken because it is nothing more than an industrial relations issue which prevents us from moving into that area to take advantage of the skills of the regional materials management.

Surely this does not fall within the remit of the pharmacists. This falls within the remit of the board. The board should determine the policy.

Mr. de Burca

With respect, often things we want to do, like changing doctors or changing ourselves, do not happen by wanting them. I think the Deputy would appreciate that. Our issue here is this, that pharmacists see their province in terms of the purchase, the control, the management, advising therapeutic committees and looking at the cost effectiveness from the point of view of feedback from clinicians, so they see another profession called "regional materials manager" as an invasion of territory.

I want to be very careful about the language I use for the obvious reason that these are issues which have been tested and maybe we will be successful some day.

From my experience on a board, one of the areas which generated the greatest heat in terms of attention was drugs purchasing and central purchasing. It was also one of the areas in which we achieved the greatest economic benefits. I would ask that some further reference be made to that particular aspect of the report at a later stage. A report on the degree to which central purchasing is availed of in the administration of drugs in the board's area should be made available to the committee.

Mr. de Burca

I think we can help on this one in the sense that if we bring the pharmacists into the broader purchasing team and use those skills in the sense in an integrated team, we would probably move in the direction to which the Deputy refers.

Acting Chairman

Mr. O'Toole might like to comment on that or send the committee a note on how it is progressing. It is obviously changing and improving.

Yes, Chairman. We will provide a note in a similar timescale to the one related to the patients' private property accounts, that is, in a month.

We are talking to the regional materials manager group in the context of the forthcoming introduction of the euro as to what potential exists nationally for bulk purchasing. The other challenge the health boards are facing is the relative strength of sterling, making the goods purchased through the UK much more expensive. We have been suggesting that other euro based countries might be looked at in the context of forthcoming contracts.

Acting Chairman

At least we are anticipating the problems. There is also an enforced saving within the purchasing area as well as in general. You might send us a note on how the eight boards are fairing in that regard also.

Mr. de Burca, I appreciate that when the concept of a ledger for fixed assets was first introduced there were huge difficulties about valuing properties and allowing for age, etc., but I gather you have sorted that out. Is the trend heading in the other direction now with the rise in the value of properties? With the general increase in the value of property, will that need to be reflected in the ledger?

Mr. de Burca

Obviously we have complied with the accounting standards, which means that every five years we are advised currently to revalue. That may have to be done more frequently if the current bullish market continues.

Acting Chairman

Personally I think it is something of an exercise which does not mean a great deal. Does the Comptroller and Auditor General have a view on this matter? Mr. Purcell, will that need to be reflected in the fixed assets register?

Mr. Purcell

The most important thing about a fixed assets register is to record the existence of the assets so that you can exercise some control over their custody. You can get very technical regarding the valuation of both premises and equipment, and all you can hope for is to get a reasonable policy and to review that policy every now and then.

Property is particularly difficult because you have to decide whether you look at the current commercial disposal value of that asset or whether you take its value to the ongoing business of the health board in this case. I think the latter is the more appropriate policy. There may be a case that perhaps there should be a note of the current market value without getting property valuers in every year and spending money like that. The Department of Health and Children could issue guidance. That is a reasonable approach rather than a didactic approach.

Acting Chairman

On your own structures, Mr. de Burca, I note that you have an internal auditor. No doubt that played a significant role in getting you a clean bill of health. How big is the internal audit team? Will the Comptroller and Auditor General state whether this is standard practice throughout the eight boards? I would welcome the provision of an internal audit process in each board.

Mr. de Burca

As the Comptroller and Auditor General will be aware, there is a review going on currently regarding the structure and the strategic statements, etc. It is due to be published shortly.

We have a very small team. We have one internal auditor supported by two middle management level staff. Having an auditor who is a qualified accountant and qualified in the professional area of audit, and who has had experience in the UK, such as my colleague, is a major advantage to us. Since Duncan came to us, we were perhaps one of the first to initiate the audit charter and the strategic plan. We have an internal audit committee in which the Comptroller and Auditor General and his staff are very interested. In effect, we connected with our clinical interests in that our director of public health is a member of the internal audit committee, as is our external auditor who is familiar with public service audit.

On particular actions we try to spread the message that everybody must be a self-auditor or self-assessor at the end of the day to bring that culture into the system. In fact, the approach has been moving away from a traditional approach to a systematic, continuous but very open extended audit because we want our clinicians to become aware that they are in the audit business not only from the point of view of clinical practice but also the spends which they generate and all the propriety issues around that.

Acting Chairman

Thank you. Would the Comptroller and Auditor General comment on that aspect?

Mr. Purcell

As Mr. de Burca stated, I am finalising a report on internal audit across the health boards. This is in response to a concern of the committee expressed in previous years not, in particular, regarding the health boards but I felt that might be a good pilot study of organisations basically delivering the same kind of services. These comparative exercises are usually very useful because they show what can be done as well as what is not being done and how it can be done better. I see it as a positive initiative. I have scrutinised the draft and made some changes. The report will contain some criticism but that is not the purpose of the exercise which is to bring everybody up to an acceptable standard. I would expect to sign that report within the next few weeks.

Acting Chairman

Is it agreed that we note the accounts and the annual financial statements, 1994, 1995, 1996, 1997 and 1998? Agreed. I thank Mr. de Burca and his staff for their attendance and for the responses to our questions.

The witnesses withdrew.

Sitting suspended at 11.58 a.m. and resumed at 12 noon.