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COMMITTEE of PUBLIC ACCOUNTS debate -
Tuesday, 22 Jan 2002

Vol. 4 No. 3

Nursing Home Subventions - Special Report No. 3 (Resumed).

Witnesses should be aware that they do not enjoy absolute privilege. Members' 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 Immunities of Witnesses) Act, 1997, grants certain rights to persons identified in the course of the committee's business. Notwithstanding this provision in the legislation, I remind Members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in Standing Order 149 that the committee should also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits or objectives of such policy.

Mr. Seán Hurley (Chief Executive Office, Southern Health Board), Mr. John A. Cooney (Chief Executive Officer, South-Eastern Health Board), Dr. Sheelah Ryan (Chief Executive Officer, Western Health Board), called and examined.

Mr. Hurley

I am accompanied today by Ms Louise Curtin, executive officer in our continuing care unit, Ms Geraldine Rigney, business manager of community care services and by Mr. Tom O'Dwyer, programme manager of community care services.

Mr. Cooney

I am accompanied by Mr. Eugene Halley, director of finance, Mr. Greg Price, superintendent community welfare officer, Mr. John Magner, regional manager and Mr. Peter Finnegan, regional manager.

Dr. Ryan

I am accompanied by Mr. Liam Minihan, director of finance, Mr. Noel Brett, regional manager for older people in mental health services, Mr. Martin Greaney, superintendent community welfare officer, Dr. Mary Hynes, regional manager for acute services and Mr. Seamus Mannion, deputy chief executive officer.

Will Mr. Purcell introduce the financial statements please?

Mr. Purcell

Thank you Chairman. With the financial statements there are three years of accounts for the Southern and Western Health Boards, 1997, 1998 and 1999. They all come with clear audit reports reflecting that, on the basis of the work undertaken, there was nothing of sufficient substance to warrant public accountability. That can be noted by the committee.

In the case of the South-Eastern Health Board, there were clear audit reports for 1997 and 1999. However, the 1994 report drew attention to a number of issues. With the passage of time all of these issues have been attended to satisfactorily. On the other hand, a matter referred to in the 1998 audit report has not been entirely resolved. This involves the recovery from private health insurers by Waterford Regional Hospital of accommodation costs of insured patients treated privately by hospital consultants. The problem was that the necessary documentation to support the recovery claim was not being completed by a small number of consultants. The result was that at any one time, anything up to £800,000 could be unclaimed for discharged patients. Some of that would relate to charges for previous years. To address part of Deputy Bell's comment, that is one issue that is still current although it arises in the 1998 audit.

I will move on to the performance of the three boards present in relation to the payment of nursing home subvention arrears. The Southern Health Board started applying the regulations correctly for new applicants from August 1995, earlier than the other five "errant" boards, on foot of its own legal advice. It did not follow suit in relation to existing cases until between late 1999 and September 2000. It was also slow in paying arrears and did not commence doing so until September 2000. Total arrears came to £267,000 and the majority of this has now been paid. The amount understated in the accounts in this particular case was small because the board had accrued the estimated cost in each of the years 1998 and 1999.

The South-Eastern Health Board applied the correct rates to new cases from July 1998 and was the quickest to start paying arrears. In late 1998, it paid arrears of £188,000 to existing cases. At the time of my report it expected to pay arrears in respect of former and deceased cases totalling £268,000 by the end of 2001. Expenditure in the accounts for 1998 and 1999 was understated by that amount.

The Western Health Board applied the correct rates to existing cases at different times depending on the location. The board was responsible for the largest chunk of arrears, £622,000. It only started paying out in July 2000 and then only in respect of current cases. It was not until May 2001 that it started paying arrears for discharged or deceased cases. This category accounts for about £525,000. The accounts for 1998 and 1999 were understated by a significant amount - in the region of between £400,000 or £500,000. It would be wise for me to leave it to the chief executive officers to explain the particular circumstances in which boards were slow to pay arrears.

I presume it is acceptable to the committee to publish all the opening statements. Will Mr. Hurley read his opening statement on nursing home subvention?

Mr. Hurley

I would like to comment on the findings of the Comptroller and Auditor General in respect of the Southern Health Board. There were four substantive issues in his report. The first was the question of the purposes for which additional funding was provided. In 1997, the Southern Health Board requested additional funding of £549,096. The breakdown of this figure was provided to the Department of Health and Children. The board received additional funding of £560,000 in response to this request. This was included in our letter of determination for 1998.

The second issue I want to address is the application of these additional funds. On the basis of independent legal advice, we had, from August 1995, applied section 8.2 of the regulations correctly. This was 15 months before the Department had written to the board outlining its legal advice. Any subvention applications received by us from August 1995 were calculated correctly. The estimated arrears of £197,369 were due in respect of subvention applications approved between September 1993 and August 1995. The review of these cases on a case-by-case basis did not commence until late 1999 and was completed by September 2000. The cost of the arrears amounted to £267,543, whereas the estimated figure calculated in 1997 was £197,369. The third issue I wish to comment on is the payment of the arrears. As of September 2000 the existing cases where payment of subvention was ongoing amounted to 38 cases, totalling £65,860. These 38 cases were paid in full in September 2000.

The second category of arrears was cases where subventions had ceased. There were 199 such cases, amounting to £201,683. As of today, we have dealt with 183 of those cases, amounting to £185,999. Some 16 cases still remain to be finalised, amounting to £15,684. We are pursuing every possible avenue to track down those remaining people.

The next issue is the question of accountability and regularity of expenditure in relation to the 1998 and 1999 annual financial statements. We received £197,369 to cover the arrears under article 8.2. We paid out nil in 1998 and in 1999. Included as an accrual in the annual financial statements for 1998 was £197, 369 because we put in an accrual for the money we had received from the Department of Health and Children. At the end of 1999 the accrual in our financial statements was £250,000. Based on our review of the cases, we were satisfied that an additional accrual was necessary. Based on the best information available to us at 31 December 1999, the board correctly accounted for the moneys it had received from the Department of Health and Children. The additional funding was provided for as an accrual and, therefore, the funding was not used for any other purposes by the board in either 1998 or 1999.

The original estimate of arrears was calculated at £197,369. However, it was only when each of the 247 cases had been reviewed in detail by us by September 2000 that the precise cost of the arrears was calculated at £267,543. This was £70,174 more than the estimate. This, in turn, disclosed that we had an undercharge in our 1998 accounts of £70,174. In the context of the expenditure on the nursing homes subventions, this would not be regarded as material and would not render the accounts of the board showing an inaccurate statement of its financial position. The accrual at 31 December 1999 was understated by £17,543.

In conclusion, following an appeal to our own appeals officer, we sought legal advice in August 1995 in relation to our interpretation at that time of article 8.2. Based on the legal advice we received we interpreted the regulations correctly from that time and we applied the new interpretation to all applications from August 1995. Subsequently, in December 1996, we received the revised interpretation which was in accordance with the legal advice we had received in August 1995. The additional funding received from the Department of Health and Children was accounted for properly and was not used for any other purpose by the board. With the benefit of hindsight the cost of the arrears was underestimated. However, the amount was not material in the context of expenditure on nursing homes subventions.

The one area where the Southern Health Board fell down was in the speed of paying out of arrears in respect of those applications received prior to August 1995. We received the additional funding in January 1998. The detailed review of the 247 cases did not commence until late 1999. I wish to apologise unreservedly for this delay. I should have made additional staff available to calculate and pay the arrears much earlier. This delay constituted an unacceptable standard of performance. All efforts are continuing in order to finalise the remaining 16 cases.

Mr. Cooney

In December 1996 and January 1997 the South-Eastern Health Board received new instructions from the Department of Health and Children concerning the allowance of pocket money to applicants for nursing home subventions under article 8.2 of the regulations and these instructions were put in hand immediately. There were approximately 4,500 files involved in relation to these calculations of current and arrears amounts. No extra staff were available and there were some 180,000 other accounts to be paid in that year. I am most unhappy about the delay in payments and offer a full apology to the families whose payments were delayed.

In fairness to our staff, however, I point out to the committee that the payments function generally performed spectacularly well in ensuring that 99.8% of 180,000 accounts were paid within the terms of the Prompt Payments Acts. In practice, nursing homes are normally paid within 30 days. In the period 1993 to 2000 the board's overall spending doubled and its spending on nursing homes quadrupled.

In relation to the nursing home accounts, it was decided to pay the current and new cases initially and this was addressed during the early months of 1997. These sums were paid directly to the nursing homes in accordance with the regulations. Additional funding was needed to meet the cost of arrears. The Department of Health and Children allocated an additional £610,000 in the 1998 letter of allocation. The payment of arrears for existing patients was carried through by July 1998. These arrears were paid directly to the nursing homes.

The remaining group of arrears consisted of persons who had died, numbering 358 cases. A number of difficulties presented in relation to these cases. It was considered that it would not be feasible to pay the nursing homes until an agreed payee was identified to whom payment could be routed. The identification of the correct payees so that all risks of illegal payments could be avoided was expected to be a prolonged process. In view of the probable elapse of time before payments could be made to the next of kin, the money allocated was used to fund the growing demand for subventions from new clients. The board would otherwise have had to radically amend the nursing homes scheme.

The Health (Amendment) Act, 1996, was brought into force in 1998. This Act changed the constitution of the health boards and laid down more stringent and time consuming financial management requirements. As a result, much of the board's senior management time was pre-empted at both a regional and local level by the need to keep services intact and within budget. A significant deficit emerged in the acute hospitals sector in mid-1998. At that time a regional manager left the board's employment and it became necessary to transfer the senior manager who had responsibility for nursing homes from that duty into the acute hospitals sector.

As a result of these factors and of rising demand for subventions, there was a further increase of pressure on staff. In retrospect, it is now my view that as a result of these changes there was a loss of focus on the residual nursing home arrears process, which resulted in it remaining in abeyance until our attention was redirected by the Ombudsman in 2000. The matter was attended to immediately in 2001. It is now well advanced and there remains only 58 cases where a payee cannot be identified. All other cases have been paid. Efforts are continuing to finalise the remaining cases and the families have been contacted at least twice by letter. Local officers of the board are also making local inquiries to try to identify the next of kin. The amount involved for each family is typically £700 to £800.

The money allocated to the board in 1998 for arrears amounted to £610,000. It was used to pay arrears for current cases and growing numbers of claims for new or enhanced subventions. The Department of Health and Children was so advised during the year. All this money was used to fund the nursing home service and money was not diverted to other services.

The unpaid element of the arrears was not accrued in 1998. A note should have been included in the accounts to identify that this potential liability would arise later in relation to the period 1993 to 1998. This was not done until 2000. I believe that the legal uncertainty around the arrears element for these delayed cases which developed in late 1998 and the loss of focus which I referred to earlier caused the system to miss out on this as then unquantified liability. The absence of any invoice which would alert the system to the need for an accrual contributed to this, as did the absence of funded accountant posts in our local system. Such accountants would be more alert to, in this case, the unusual accounting requirements to be met to give a fully accurate picture of nursing home spending.

In the light of this rising standard of accountability and more demanding standards of accounting and administration, I have since taken action to strengthen the board's ability to deliver a high performance in financial management generally. This includes the creation of local finance units led by professionally qualified accountants who will monitor local financial performance, including the accounting systems and information flows needed to inform this; investment in a new suite of financial systems which will more fully automate the accounting process, thereby releasing staff time into its interpretation and monitoring; a review of the accrual process will be undertaken for local offices in order that guidance will be available on procedures, especially where a liability arises from transactions not related to normal invoiced services. These steps will create a more developed finance function, especially at local level, and result in a more balanced performance across the organisation. As a result, any residual weakness in the system will be better addressed and brought to a more satisfactory conclusion.

I again refer to the consistently good performance of the staff in the payment of accounts generally which must reassure the committee that the delay in some nursing home payments does not reflect a general culture of slow payment in the South-Eastern Health Board. The board's staff deeply regret that the delay in arrears payments to families was so unsatisfactory in this particular case. However, 88.5% of all cases have now been paid.

Dr. Ryan

With regard to nursing homes, the report of the Comptroller and Auditor General is welcomed both by my board and by me as chief executive officer. It is accurate, fair and correct in its conclusions as it applied to the Western Health Board. It raises some fundamental issues for health care funding and budgetary management in the health service. It illustrates the complexity of the legislative and regulatory arena in which we deliver services. It also highlights the tensions for health boards between the Health (Amendment) (No. 3) Act, 1996, and the sustained increases in service demand. The difficulties of protecting funding for individual services within the overarching accountability requirements are clearly illustrated.

The committee will be aware that the subvention scheme commenced in September 1993 in line with the Health (Nursing Homes) Act, 1990, and Nursing Homes (Subvention) Regulations, 1993. As with any new legislation, there was initial debate on interpretation and application of the associated regulations. Officers from my board attended training sessions provided by the Department of Health and Children and implemented the regulations as advised at that point. After some months of operation, staff in my board began to raise queries about the interpretation of Article 8.2 in particular. There were a number of requests to the Department to clarify these issues, both verbally and in writing, including the legal advice we had received. The board continued to act in accordance with the clarification and specific guidance issued. In effect, while one fifth of the non-contributory old age pension was disregarded in calculating means and assessing eligibility, it was subsequently not taken into account in making the subvention payment.

In December 1996 correspondence was received from the Department revising the guidance on Article 8.2. My board applied this guidance to all current and new cases in 1997. Additional funding made available by the Department in 1998 included a provision for arrears, but this proved inadequate because of the overall demand for new subventions, outlined on page 6 of my submission to the committee.

The board's continuing priority was to meet the demands of new subvention clients in the first instance. The intention at all times was to discharge our liability to pay arrears due to all 1,269 individuals under Article 8.2 as soon as the nursing home budget allowed. In 1998 the board only had £180,000 left in the nursing home budget by the end of the year without paying the arrears. At the same time there was a serious corporate budget deficit. Notwithstanding this, the £180,000 from the nursing home budget was retained within elderly services rather than pay the arrears and used for the most urgent cases requiring incontinence wear and home help services. The year 1999 proved to be extremely challenging for the subvention scheme with further pressures arising from increased demand, increased dependency levels and increases in hardship cases. While the easing of the sons and daughters provision was welcome, it compounded the financial challenges. In 1999 there was an overrun of £978,000 in the nursing home budget without paying the arrears.

In the year 2000 the board commenced payment of arrears and the bulk of payments were complete in 2001 as outlined on page 7. The remaining cases involve difficulties in identifying next of kin. Every effort is being made to conclude them. It is likely that a proportion will be referred to the State solicitor as intestate.

Assessment of family circumstances ceased in January 1999 in response to the statutory instrument. All arrears were calculated and the board commenced payment that year.

We paid an amount of £200,000 up until advice issued from the Department to await the issue of a national indemnity letter for each case. Payments recommenced when it arrived in October 2001. We expect to complete the process by March 2002, with the exception of cases where there is no next of kin.

In March 2001 my board debated all the issues relating to nursing home subvention, including arrears. Members recognised that there were still equity issues for clients who had income less than the non-contributory old age pension when Article 8.2 was applied in isolation. As a result, and notwithstanding the fact that there was no standardised approach nationally to the implementation of Article 10.6, our board used its discretionary powers to apply the article to all current clients with effect from last March. This cost of £900,000 was met from its own revenue. In the 2002 letter of allocation we have received an amount for implementing this on a current basis. Our board also now operates a formal policy on hardship where the cost of nursing home care exceeds the client's ability to pay having applied all these provisions. As prices increase, we envisage significant demands being made on an ongoing basis on the basis of hardship.

Our board would welcome greater clarity in the operation of the long-term care provision, including the following: the subvention should be a needs led entitlement which is fully funded; clients should have the option of having a subvented community choice or a residential based option; the contracting of residential care beds should be based on patient needs, with the minimum of financial administration for patients and maximum security for appropriate placement. The commitment in the new national health strategy to bring about this clarification in legislation and review the scheme is welcome.

I accept fully that the payment of arrears to clients and their families was delayed in the Western Health Board. I regret this and have apologised in public to all concerned. I want to reassure the committee that this matter will be rectified in full. I have taken actions to prevent a recurrence.

The three boards represented before us have the same story as the previous three. It appears a different approach was adopted. Only the Southern Health Board used the money for the purposes for which it was intended. The South-Eastern Health Board used some of it to make up the shortfall in its subvention budget. The Western Health Board used it in a similar manner. The amount due for refunds to patients was included in an allocation to the board in 1998, most of which was used by the board for new subventions while some was used for services for the elderly. Why was a different approach adopted by the various health boards? Was it not specified to the health boards, when this money was being refunded, that it was for the purpose of paying back to the patients the money due to them?

Dr. Ryan

There was no specific guidance issued centrally in relation to the payback to clients, as far as I am aware. In relation to the Western Health Board, apart from 1998, at all times we spent nursing home money on nursing home subventions. In fact, in every single year we had to draw on money from other services and delay developments to pay the increasing demand in relation to nursing home subventions. In that particular year, 1998, when we combined the arrears with the level of money we got for subvention we could not meet that from within the nursing home budget. If we had started to pay the arrears we would still have had a deficit of £500,000 in the nursing home budget. In that particular year, as Deputy McCormack may remember, a lot of new facilities came on board for the first time at University Hospital Galway and staff wanted to do more for patients. The board wanted to do more for patients but the commissioning of those units was such that we were not in a position to actually pay for all of the hospital activity and we were facing the end of 1998 with a very serious corporate deficit. The £180,000 should probably have gone into the corporate deficit to minimise it that year, but it was held within the programme because of the very urgent issues that were emerging in the community. Deputy McCormack will probably also remember that it was raised during that period at the board that we were actually rationing incontinence wear and nursing supplies in the community. That is the only reason a portion of the nursing home moneys arrears not expended was actually paid for a different purpose. It has not happened subsequently and it would not be our normal practice.

It would appear that, while the actions of the Western Health Board in that regard were laudable, because there was a shortage in the nursing home subvention and other budgets, some of this money was used to make up that. I was not a member of the board in 2001, when the board discussed this matter, although I had been a member previously. Would it not have been better for the board at that time to demand from the Department of Health and Children the necessary budget to run its affairs, without having to dip into a fund that was supposed to be refunded to patients?

Dr. Ryan

At all times we sought additional funds from the Department for this scheme but it was not funded on a demand led basis and that was the interpretation of the scheme under which we were operating. In fact, on the ground it was a demand led scheme and the only way we could actually meet our requirements was to take money from other areas.

Mr. Cooney

It was my understanding, and I think the Secretary General has confirmed it to the committee, that the money allocated in 1998 included arrears but was also provided for other purposes. That factor was taken into account by the South-Eastern Health Board. The reality was that managers were facing a situation of new applicants seeking financial support in the form of subventions. We had a choice, within a fixed sum of money, of whether to accept those applications and provide a subvention or to say that we could not touch that money as it was set aside for arrears. The intention was to try and keep the system going, to help people who needed help and to return to the arrears question and see it through fully. In all honesty, we have to accept that we did not carry through that final part of the arrears but we had to try to keep the nursing home system going. We had to care for the living as well as looking after the interests of the deceased.

I understood that, as a result of the Ombudsman's report and clarification of the situation by the Department of Health and Children, the pocket money issue was dealt with. Is it not true that, on 1 January 1998, you got a specific allocation for the pocket money scheme, as did other health boards around the country? You gave the impression that it was part of an overall allocation, but did you get a specific allocation to cover the pocket money issue?

Mr. Cooney

Yes, we did. We got £610,000.

That is my question. I am referring to the money you got for this specific purpose. Your analysis involved a long thesis of accountancy practice, changes at management level and neglect on this specific issue. You have apologised for the delay to very vulnerable members of society in many cases.

Mr. Cooney

Yes.

A great deal of hurt has been caused on this issue. We were presented with a thesis on why things went wrong. What the members of this committee find very difficult to reconcile is that, of the eight health boards in the country, only two of them implemented the guidelines effectively and properly from day one while six other health boards took their own interpretation as to when they would start to pay the arrears, having regard to their financial constraints. Mr. Hurley said he got legal clarification in August 1995 and decided he could go ahead. On 1 January 1996, I understand the Department of Health and Children authorised payment of the pocket money aspect to proceed and other aspects in relation to family circumstances were dealt with later on. Public representatives were being approached by people asking why they had to make a statement of their income in order to determine the nursing home subvention. According to the Ombudsman's report, many applications were rejected because of failure to supply that information. Yet, the North-Eastern Health Board and the Eastern Health Board - the biggest health board in the country - could implement the regulations effectively and that fact was never taken into consideration.

I assume that health board chief executives meet on an ongoing basis, as do county managers. Surely, this issue must have been discussed. I cannot understand why there was not a uniform policy and why that took so long. Even at this stage in 2002, arrears are still being paid. This matter should now be brought to a conclusion. I am aware of a case in which a person with a final payment of some £200 outstanding received a long letter from the Department seeking probate and letters of administration etc. That person could not understand the need for such an elaborate legal process. Fortunately, the health board officials listened to my representations and have clarified the guidelines with regard to the exercise of discretion as to requiring probate or letters of administration.

In fairness, all six of the health boards concerned have apologised to those who have been affected by this process. However, there seems to be a lack of definition as to when the payment of arrears should commence. Mr. Hurley said the legal situation was clarified in August 1995 but it still took a considerable length of time before payment of the arrears actually commenced. That delay is very difficult to understand. When the wrong was exposed by the Ombudsman, it should have been rectified quickly.

The Chairman spoke on my behalf. I am particularly interested in the situation in the Western Health Board. A total of £622,000 was obtained in 1998 and has been paid in 2000 and 2001. Is there any provision for paying interest to those who should rightfully have got that money when it was refunded to the health board?

Dr. Ryan

There is no legal basis at the moment for paying interest in relation to that type of payment. This issue was raised by the Ombudsman two to three years ago in a discussion about delayed allowances. Following that, the chief executive officers as a group set up an expert body to find how to deal with delayed payments of allowances, if such issues were to recur. We worked out a formula to achieve that and we recommended it as a policy to the Department of Health and Children. We are awaiting a reply on that. As I understand it, there is no legal basis for paying interest on arrears at the moment.

How much has now been paid of the total amount? What was the total amount in the Western Health Board area?

Mr. Magan

Dr. Ryan is correct. There is no arrangement at present in the legislation governing health to allow the payment of arrears, except as it affects the payment of bills under the prompt payments legislation. We have discussed such arrangements with the Western Health Board and the Department of Finance. These are along the lines governing the Department of Social, Community and Family Affairs but the discussions have not yet concluded.

Is that for a 30 days payment?

Mr. Magan

It is for a 45 days payment.

In this case we are talking about periods of two to two and a half years in many cases. Is this unjust?

Mr. Magan

It is, but I thought that the question was whether there were arrangements to pay. There are no legal arrangements to pay interest at the moment. We hope to bring that into play at the House services committee shortly.

Is that on this specific issue?

Mr. Magan

It relates to all issues arising when people are left with payments outstanding for any considerable time. It would not just be on this issue but on any issue where a person was, for argument's sake, due an allowance and there was an unreasonable delay in paying that allowance. That would be paid plus interest. That is the process within the Department of Social, Community and Family Affairs and we hope to bring that to the health service. However, it is not there at present. Dr. Ryan is correct in that.

Do you see it applying in this case?

Mr. Magan

I do. It is a question of bringing in regulations to allow it to apply. We have been discussing that with the Department of Finance.

I still need an answer on the amounts.

Dr. Ryan

I refer Deputy McCormack to page seven. In relation to article 2, the amount of arrears paid is £6,600. The amount yet to be paid is £98,000. That refers to deceased clients in a situation where we are having real difficulty identifying next of kin. The procedure that we have adopted in that situation is to not only go through all of the charts, but to visit nursing homes to see who arranged the funerals and to visit the local communities. Our understanding is that a significant portion of those cases will be intestate because we will not be able to identify any next of kin, either here or abroad. They will revert to the State Solicitor.

In relation to Mr. Magan's comments on interest accruing, we have calculated the interest that would amount in relation to the paying of arrears, should that arise. It averages about €40 per client.

Has Mr. Cooney's health board considered this approach?

Mr. Cooney

We would be sympathetic to that approach and would support it if it were put forward.

Mr. Hurley, do you hold a similar view?

Mr. Hurley

Yes.

On the assessment of people for qualification for nursing home subvention where there is a single person living in a house, is it the interpretation of the three health board representatives present that the notional value of the property, or its rent, is taken into account, even in a case where a person is retaining that property to come back to at some stage? Do any of the boards use the discretion that the Act allows them, whereby they may or may not take that into account?

Dr. Ryan

In the Western Health Board region, where a dependant or a spouse is occupying the house, that is not taken into consideration. Where the house is either vacant or occupied by others, we take 5% into account in determining the subvention. Even though it says that houses in excess of £75,000 may not be eligible, there is a discretionary element in refusing subvention on that basis. We have never used that but always used the word "may" to benefit the client.

That is interesting. On the exercise of discretion, one health board has said that it used the £75,000 limit when rejecting a person as it is such a demand-driven scheme. Another person on a previous panel said that they would never take it into consideration. Another said that they would not impute that value regarding the 5% calculation. In relation to the guidelines, the six health boards are not necessarily exercising uniform thinking in areas in which they have flexibility.

Dr. Ryan

That is correct. One of the lessons learned by our board in relation to this is the need to have corporate policies and very substantive manuals of all the procedures. That has now been revised for the administration of the nursing homes scheme and also for the accruals system. Under the new health boards' executive, the idea is to benchmark in a systematic way the type of performance in each of these of the major schemes. We have already looked at a number of priorities in that area.

The health boards should have been doing that in order that there would be a uniform policy. In the Mid-Western Health Board area, it is very difficult to get an enhanced level of subvention but it is possible to do that in the Western Health Board area. If a person was wise, and did not have the necessary income, they might be better off to transfer over the border from Limerick to Galway. Mr. Hurley might comment on this as his area has quite a long waiting list of people seeking enhanced subvention levels.

Mr. Hurley

Yes, we do pay an enhanced subvention. We have approximately 525 people currently in receipt of enhanced subvention of a total number of about 950 in receipt of subvention. In the Southern Health Board area, community services are very poorly developed. That arose from the development of Cork University Hospital and Tralee General Hospital at the time the health boards were established. All investment went into developing those hospitals at the expense of community services. A number of years ago, we drew up a strategic plan to develop services for older people because that is the biggest challenge facing our board. We want to invest significantly in community services but also in continuing care beds. We had identified a need for an additional 380 continuing care beds. To date, our investment in additional development has not allowed us to put any of those beds in place. We are therefore relying on the nursing homes.

Allied to that, we look at the entire system, in that a number of people who are now in receipt of enhanced subvention would have been inappropriately placed in acute hospitals. The issue we were facing was whether to leave such people in acute beds, which will block beds and drive up waiting lists, or to try to deal with the problem in a total system way. We have dealt with it in a total system way and that has enabled us to reduce and maintain waiting lists which are relatively low. The bubble appears somewhere in the overall system and in our case it emerged in dealing with continuing care. We have had to rely significantly on nursing homes and, particularly, on agreeing to pay people the enhanced subvention rate. There is an historical context, but we are also adopting a total system approach.

In relation to waiting lists, a number of people who are currently receiving the basic subvention rate have applied for the enhanced rate. Many people who already receive the enhanced rate are looking for a further top up. As my colleagues have said, it is not a scheme without demands and we have set aside a specific amount of money within our service plan for nursing homes. We have to manage our affairs within that total figure, so we cannot currently deal with all the people who are applying for the enhanced subvention rate.

I have a question for the three health boards. Is the penalising of a person who wishes to maintain their house, which is worth £100,000, so they can return to it in the summer or if they feel better a fair method of assessing means for subvention? I do not think it is. I do not have difficulties with assessing those with rented properties, but I have concerns about those who were living alone before moving to a nursing home and who are maintaining their house with the intention of moving into it again. Is it fair to assess such people as if they had an income of £5,000 when they have no such income? I am waiting for an answer.

Who will volunteer to answer? The question relates to Dr. Sheelah Ryan's area of interest.

Dr. Ryan

My answer is that I do not know. The Deputy asked about fairness, but there is a great deal of unfairness in the system. One such issue relates to finding a balance between stretching the budget for new clients coming on stream and stretching it because of increasing dependency and changing circumstances. I am not sure where fairness comes into it from the point of view of clients. Real fairness lies in the decisions made by clients who have to enter nursing homes as they are unable to avail of a community option. In the Western Health Board's experience, the real issue is that families and elderly people want to stay at home. If they cannot stay at home, they wish to stay in their own local environment but if this is not possible, they may have to travel a distance to the nearest home, run either by health boards or by nursing homes. There are many issues of fairness. I cannot answer the Deputy on the specific aspect of assessment.

Many things are unfair in our profession too as one would realise if one had spoken to Deputy John Gormley this morning. May I ask a question about the accounts?

I seek clarification about certain aspects of the Western Health Board's accounts for 1997. Page 7 of the report deals with medical and dental expenses, which totalled £21.834 million in that year. What items are covered by that sum? Elsewhere in the accounts, I noticed that dental services and other expenditure totalled £3.8 million. I wonder what is covered by this sum and whether it has anything to do with orthodontic services for which there is now a waiting list of four to five years in the Western Health Board area.

Dr. Ryan

The sum mentioned on page 7 is merely an analysis of payments to the doctors and dentists employed.

How can we separate the figure for medical payments from the figure from dental payments?

Dr. Ryan

We do not make such a separation. I would have to examine the matter if the Deputy requested a specific breakdown. The figure essentially refers to the salaries paid to doctors and dentists.

Is that also the case as regards the sum of £3.8 million provided for community health programmes under non-capital income and expenditure accounts referred to on page 14?

Dr. Ryan

The figure refers to the community dental scheme under which private dentists are paid to provide dental care.

Is there any explanation for the waiting list of four to five years for orthodontic treatment in the Western Health Board area and for the difficulties in receiving assessment?

Dr. Ryan

There is no explanation for the waiting list in the accounts, but I assure the committee that the Western Health Board takes orthodontic services very seriously and recognises that there has been huge growth in public demand as children wish to have straight teeth, perhaps as a result of peer pressure. We meet urgent cases on demand without a waiting list, but we acknowledge that there is hardship in waiting for assessment and treatment. Some years ago, the Western Health Board had three specialists and was able to reduce waiting lists but, unfortunately, the specialists were lost. At the same time, voluntary contributions had been received to aid the provision of orthodontic service, but we were advised by the Department that it was not the proper thing to do despite the fact that it would have enabled the scheme to go further. We have been trying to catch up for the last three years as we have had three vacancies at specialist level and we have not had the same amount of money.

Significant strides have been made in the last year, however, to reduce the waiting list for orthodontic services. An additional specialist came on stream in October 2001 and two specialists are to finish training this year. The Department of Health and Children has allocated additional funds to enable us to engage all the private practitioners in the Western Health Board area. Excess moneys remaining from corporate contingency have been allocated to improve services. A substantial improvement will be evident from 2002.

I welcome the efforts Dr. Ryan has mentioned. How long does one have to wait for orthodontic treatment in the Western Health Board area?

Dr. Ryan

There is still a waiting list of four years.

It was two years in 1996.

Dr. Ryan

That was when we had three specialists and we received voluntary contributions.

The time was reduced from to six years to two years between 1992 and 1996, so the standard has declined.

Dr. Ryan

We reduced the waiting list by 22% in 2000 when new staff came on stream. We are capable of making dramatic reductions within a year when there are enough specialists on board.

I do not know about all other health boards, but waiting lists are a huge issue in the Mid-Western Health Board. Those who are assessed in primary school may be 18 years old and attending third level college by the time they receive treatment. Orthodontists will say that it is not the ideal time to meet patients, who have to come home from college to be treated. Although they are seen in primary school, five or six years may pass before treatment is received. Parents may be advised to have the work done privately for £2,000 or £3,000 as they will have to wait otherwise. I do not know about the Southern Health Board or other health boards, but it is a huge issue.

Dr. Ryan

I accept that.

It could be said that the Chair has summed up the matter quite well as he reflected the views and frustrations of this committee. I have spoken in the Dáil and in this committee many times over the years on the subject of subvention. I am glad that my health board was listening, but it seems to have been the only one. Equally, it is no coincidence that the chief executive officer of the Eastern Regional Health Authority was the chief executive officer of the North-Eastern Health Board, Dr. McLoughlin. I am glad somebody was listening. Given the amount of time we spent trying to convince the health boards that they were operating illegally by charging money to people, it is rather amusing that it is only after the Ombudsman made his report, even though Deputies have regularly been making the case in the Dáil, that they then sought legal advice. Why did they not get legal advice when it was raised by Deputies and public representatives? That would have determined that they were operating contrary to the Acts. We have had enough of this and the message that should go out from this committee is that we have wasted too much time dealing with this subject.

The football game is over, let us blow the final whistle to get it off the agenda so that people can be paid the money they are due. People were put through enough heartache. I have seen young, married men with families having to pay subventions to keep their mothers in private nursing homes when the State should have been providing geriatric beds to keep them. They should not have had to go to private homes, but when they opted for alternative accommodation, which was cheaper than the public wards, they were crucified by individual health boards. I hope that in future the management of the health boards will listen to the public representatives who have to deal with the matter at the coal face and listen to the complaints of people every day of the week at clinics and offices. I felt very frustrated - that frustration is coming out now - writing to the health board over the years about hardship cases where people could not send their elderly parents and relatives to private homes because they could not afford to pay. They had to rear their own families. Several years after the case against the health boards has been proven the matter still has not been cleared up and the bulk of the patients that went into private nursing homes and geriatric units have to complete the statutory forms and say who their next of kin is. Having to pay substantial legal fees in order to retrieve a couple of hundred pounds or a couple of thousand pounds has meant that half of the money rebated has been spent on fees and probate. This has to be got off the agenda and the next time we meet our friends and colleagues from the health boards I hope that will have happened. We, as public representatives, have had enough of it.

I have said it before and say again that orthodontic treatment in health boards is almost non-existent. People in my health board area, as in others, can get such treatment, if they want to pay for it, in Northern Ireland at half the price it costs here. I cannot understand that as we are talking about the same job. Will the experts in the health board please tell us why you can go across the Border to Newry or Derry and get orthodontic treatment for half the price? It is obvious that the health boards are not getting the funding to deal with this, the most serious matter they face. How much money have the health boards received in this year's allocation?

That brings me back to the point I made when other health board representatives were here. We cannot get answers to questions because we are dealing with accounts from four years ago. How can we talk about the cost of dental treatment when we are talking about four year old accounts? Why are we not talking about costs and the allocation of funds for orthodontic and dental treatment for last year? We cannot make an intelligent assessment of these accounts when, as today, we get the accounts of six or seven health boards representing a pile of documents it would take the entire Civil Service to read, never mind digest. I want to find out why the cost of orthodontic treatment in the Republic of Ireland is, in many cases, double what it is in Northern Ireland.

Mr. Hurley

I cannot answer that, but the Joint Committee on Health and Children is looking at the matter and the health boards and the orthodontists have been making submissions to it. It is a concern to everyone and the committee wants to conduct a detailed examination to discover why there is such a disparity in the price of orthodontic treatment here and there.

We will talk to Deputy Batt O'Keeffe who is Chairman of that committee. It had two meetings before Christmas and is meeting the orthodontists shortly. It is a specific issue that I will ask him to take up.

Mr. Cooney, the Comptroller and Auditor General referred to £800,000 outstanding to you from VHI and BUPA in 1998 because consultants did not verify documentation. Is that money still outstanding and has it increased? What is wrong?

Mr. Cooney

This money is recouped directly to the boards by the VHI following the completion of a medical report by the consultant. In the south east in one particular hospital there were three consultants——

What hospital is that?

Mr. Cooney

At Waterford Regional Hospital three consultants had allowed the claim documents to accumulate. In two of the three cases it was because they were single-handed and extremely busy, working well beyond their normal contractual hours. In the other case the person concerned had an extremely large practice. We took two lines of action. We went to the VHI to ask if it would accept certification of the claim by the hospital manager in order to speed up the process and I was told that it could not accept that because a medical report is needed to ensure that the treatment offered was appropriate in character and duration.

The VHI suggested that if we were having difficulties with a particular consultant who was delaying matters unreasonably, it would assist us and co-operate. I accepted that and I went back to the consultants concerned and all three offered full co-operation. There has been a significant reduction in the arrears in the case of the consultant who was not single-handed. In the case of the other two an effort was made and there was some improvement, but they were still single-handed until very recently. In one case we got a second consultant in December and in the other we have retained a consultant this month. I expect that those two consultants will now address the issue - they have assured us that they will. Although the number of consultants has increased significantly since 1997, as has the amount of the debits, the amount of arrears represented by unclaimed sums has reduced from about 27% to 21%.

How much is that in money?

Mr. Cooney

That is about £750,000 to £800,000.

The Comptroller and Auditor General referred to £800,000 in 1998 and the sum is still at that level.

Mr. Cooney

It is, but of a much larger debit.

I accept that. What do you mean when you say two consultants were single-handed? Does that mean they do not have any secretarial back up?

Mr. Cooney

It means they are the only consultants in their specialties. It takes time to build up the establishment of consultants and in all specialties we need a minimum of two. It is not always possible to get the funding for two immediately so we start with one and then look for a second. We have done that in these two cases and it is only now that we have been successful in getting the money through the Local Appointments Commission.

To what degree will the VHI or BUPA entertain retrospective claims?

Mr. Cooney

They have not raised that as an issue with us, but they did state to us that if a particular consultant was allowing a large build-up of claims, they would approach him on our behalf or conjointly with us in order to bring about an improvement. We were reasonably happy with this.

Is that a unique feature of your hospital or does it happen with other health boards?

Mr. Cooney

It could arise with any particular case in any hospital. It just so happened that in this particular hospital we were creating new specialties in the late 1990s and taking on new kinds of work which hitherto had gone to Dublin.

Were there no specialties created in the Mid-Western Health Board, in the regional hospital? Perhaps the Comptroller and Auditor General should answer that question. Has he found another hospital?

Mr. Purcell

Yes, I have. From memory, I believe there was a significant problem in Our Lady of Lourdes Hospital, Drogheda, around 1997, which has since been addressed and the position is now satisfactory. There will always be an element of this in individual hospitals. It is only when it reaches what I would regard, in accounting speak, as material amounts that I really start getting worried about it and thinking that it perhaps needs a public airing to get some action.

Mr. Cooney, are you confident that the £800,000 or three quarters of a million as, I believe, you described it will be retrieved?

Mr. Cooney

Yes. Of the original £800,000 mentioned by the Comptroller and Auditor General, a large element was some years old, whereas nearly all the current £800,000 refers to 2001. This means the matter is being turned around much more quickly.

The historical £800,000 from 1998 has been recovered.

Mr. Cooney

Yes. A large element goes back to 1996-97.

The consultants are signing these medical certificates now.

Mr. Cooney

Yes, they have dealt with the arrears element of the problem.

You have the matter under control.

Mr. Cooney

I think it is moving in the right direction, yes.

I thank all three witnesses for their time. I ask them to set a deadline in their respective health boards to bring this matter to finality with regard to nursing home subvention. A small sum of money is still outstanding in all of them. We look forward to the Department of Health and Children's deliberations with regard to the interest aspect of the matter. This is a very interesting point because those who received compensation should also receive interest because of the delay. I note the Votes of the financial statements of the Southern Health Board, South-Eastern Health Board and Western Health Board.

The witnesses withdrew.

Sitting suspended at 4.03 p.m. and resumed at 4.09 p.m.
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