Vote Management and Budgetary Situation in 2012: Discussion with Department of Health and HSE

Dr. Ambrose McLoughlin(Secretary General, Department of Health) and Mr. Tony O'Brien (Deputy Chief Executive Officer, HSE) called and examined.

As today's meeting is a special meeting, we will deal solely with the agenda item Vote management in the HSE, particularly the situation relating to budgetary matters for 2012. I received correspondence relating to today's meeting from the HSE and there is correspondence that was received on 3 October 2012 from Mr. Ray Mitchell in the parliamentary and regulatory affairs division of the Health Service Executive reforwarding the HSE July 2012 performance report. Members have also been circulated with the replies received from the HSE following our meeting on 28 June 2012. When the proceedings commence I want to put a short statement on the record on the background to today's meeting and deal with an issue raised yesterday about the remit of the Committee of Public Accounts to review present day expenditure that has not yet been audited by the Comptroller and Auditor General.

We are now dealing with agenda item No. 3, Vote management in the HSE. Before we begin I remind members, witnesses and those in the Visitors' Gallery to turn off their mobile telephones.

The interference from mobile telephones affects the sound quality and transmission of the meeting.

I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give to the committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable.

I remind Members of the provision within Standing Order 158 that the committee shall 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 the objectives of such policies.

I welcome Dr. Ambrose McLoughlin, Secretary General, Department of Health, and invite him to introduce his officials.

Dr. Ambrose McLoughlin

I thank the Chairman for the invitation. I am accompanied by Mr. John O'Connell, assistant secretary, Department of Public Expenditure and Reform, Mr. David Smith, principal officer, and Ms Bairbre Nic Aongusa, Department of Health; and Mr. Tony O'Brien, deputy chief executive officer, Ms Laverne McGuinness, Mr. Liam Woods and Dr. Philip Crowley, Health Service Executive.

As this is the first appearance of Dr. Ambrose McLoughlin and Mr. Tony O'Brien before the committee, I welcome them and look forward to working with them in the context of our work. As this is a resumed session, the Comptroller and Auditor General will not make an opening statement. However, I wish to put today's meeting in context. In that regard, I shall read the following statement.

We are resuming our examination today of the management of the HSE Vote which was a subject matter of our meeting on 28 June 2012. The issue of Vote management and cost containment was dealt with by the Comptroller and Auditor General in chapter 47 of his 2010 report. In examining this, the committee sought details of how the cost containment and Vote management issues were working in the current year, given that the information coming into the public domain in respect of the HSE budget was that it faced a significant over-run and corrective measures were needed. The evidence given to the committee in June by the former Accounting Officer showed that, if unchecked, the over-run was likely to reach €500 million.

Arising from that meeting in June, the committee received further information in July from the HSE, by way of follow up letters, and this evidence formed the basis of a draft report which was first considered by the committee at our meeting on Thursday, 20 September 2012. In reviewing that report, it was clear to the committee that information published by the HSE in September needed to be incorporated in that committee report as the figures would be out of date and, as the key issue is budget management, the committee agreed to call the HSE and the Department of Health to bring our deliberations on this issue up to date. It is in this context that the meeting is being held today.

I wish to deal with an issue raised yesterday with the clerk to the committee. It relates to a concern that the committee, by reviewing the Vote management in the HSE in the current year, is somehow straying beyond its remit. I said on my appointment that I would not confine our activities to accounts and events, some of which are two years old, when they are discussed here and that I would bring current issues to the table in order that members of the Committee of Public Accounts can be more effective and can play a meaningful role in the way public expenditure is managed. One has only to look at the latest Comptroller and Auditor General report to see the waste that is endemic in our system of public administration. It would be very easy for the committee to stay within a narrower remit and deal solely with budget overruns in, for example, 2010, but that defeats the purpose when what the taxpayer wants is an explanation of how the current budget is being managed. The Committee of Public Accounts has to play a meaningful role in the control of public expenditure. It cannot wait until 2014 to review what has happened in 2012.

In the case of Vote management of the HSE, the Comptroller and Auditor General has raised concerns in the past, and devoted an entire chapter to it in his 2007 annual report when he voiced concern at allowing over-runs to develop in the expectation that budget holders would be bailed out in some way. At the same time, he questioned what he saw was the wait-and-see culture that had developed among budget holders. We are now in a situation where there is no surplus cash elsewhere in the system to bail out the HSE and, therefore, the meeting today provides an opportunity to the HSE and the Department to highlight how costs are being contained.

I am aware that serious efforts are being made by the HSE and the Department since it became evident earlier this year that an overrun on the budget was emerging from the trends. At today's meeting we want to test how effective those corrective measures have been. In the Comptroller and Auditor General's 2010 report, issues such as staff reduction measures, reorganisation and cost containment were raised. These are the issues we are going to follow up at today's session. What is not in our remit is to question policy decisions that are introduced to curtail costs. This position is referred to on a weekly basis in the context of what is read out by the Chairman. Therefore, I ask members to have particular regard for the constraints on the committee in so far as cuts to home help, home hours and so on are concerned, relative to policy only.

The Accounting Officer is responsible for ensuring that systems of control are in place to ensure that money is not wasted and that public bodies can remain within budget. That is where our focus and the focus of this meeting will be. I trust this clarifies the matter. I call on Mr. Tony O'Brien to make his opening statement.

Mr. Tony O'Brien

I am accompanied by my colleagues Ms Laverne McGuinness, national director of integrated services, Mr. Liam Woods, national director, finance, and Dr. Philip Crowley, national director, quality and patient safety.

The basis upon which I am being invited to appear before the Committee of Public Accounts today is stated to be the "Budgetary Situation in 2012." The Health Service Executive appeared before the Committee of Public Accounts in June and the Chapters under examination were disposed of and the account closed at that time. The Health Service Executive is clearly still operating in 2012. The year is not closed and there is no report of the Comptroller and Auditor General on 2012 under examination.

May we have a copy of Mr. O'Brien's script?

Mr. Tony O'Brien

Yes, Mr. Ray Mitchell will take care of that request in a moment.

Perhaps we could have it now.

Mr. Tony O'Brien

Shall we pause while that is being done?

Yes. Is Mr. O'Brien ready to resume?

Mr. Tony O'Brien

I will resume at the third paragraph where I stopped speaking.

The 2011 Appropriation Accounts have recently been published by the Comptroller and Auditor General. In this regard, I am concerned as to the appropriateness of attending the Committee of Public Accounts to discuss 2012 when the year is not closed and there are no accounts under examination. In addition, I am further concerned that as late as yesterday afternoon a substantial draft document prepared by the Committee of Public Accounts was received by the Health Service Executive, the existence of which I had not previously been aware. This is not a report of the Comptroller and Auditor General. This document, which was provided to us by the clerk to the committee, contains new information that raises questions that appear to be substantially policy related. As the committee is aware, the Health Service Executive cannot engage in dialogue on policy related matters pursuant to Part 4, section 21(9) of the Health Act 2004.

If requested the HSE can work with the committee to establish the factual accuracy of the draft report provided to it yesterday afternoon. We would require reasonable time for this input which would be normal practice in our work with the Comptroller and Auditor General, the Joint Committee on Health and Children and this committee.

The HSE will continue to work actively to support the Committee of Public Accounts in its accountability to the Oireachtas for the expenditure of public funds. We will also continue to work collaboratively with the Comptroller and Auditor General. The HSE since 2010 to date has attended ten meetings of the Committee of Public Accounts and 25 meetings of the Joint Committee on Health and Children.

As Accounting Officer I am happy to attend the committee and provide all relevant information in support of the committee in fulfilling its terms of reference.

I call Dr. McLoughlin.

By way of clarification, did we close the account?

Did we close both of the accounts?

We did close it but we can formally-----

We had a meeting, as the Chairman said, on 28 June at which the chief executive of the HSE engaged in extensive discussions on the 2012 financial situation. I believe that he was correct and proper, as a good public servant, to do that in the interests of the organisations that he serves, and as far as the taxpayer of Ireland was concerned, with reported overruns for the current year. He made specific comments on drug payments issues, charging patients for public beds, and why budgets had not been achieved to date and I believe that was in order. I address my next comment to Dr. Ambrose McLoughlin as he is the Secretary General. Is he chairman of the HSE?

Dr. Ambrose McLoughlin

That is correct.

I address my comment to him as chairman of the HSE, the largest publicly-funded body in the State. It is unacceptable for him, as chairman, to come here today and say that he will not resume the discussion on the matters that we discussed here, at length, with the HSE's chief executive on Thursday, 28 June. Mr. O'Brien has done the HSE a gross disservice today by what he has told the national Parliament and the people of Ireland, through the committee, and adopting what I would consider to be an unacceptable approach to discussing matters of public interest. The taxpayer that pays his and my wages expect the discussion to take place. I ask the chairman of the HSE to ensure that we have a proper discussion and a continuation of the discussion that we had here on 28 June with Mr. O'Brien's predecessor.

Dr. McLoughlin wants to make an opening statement. Will Deputy McDonald allow him to comment first?

I want to clarify one point in advance of Dr. McLoughlin's statement and I apologise to the lead speakers.

I heard Mr. O'Brien's statement and scanned Dr. McLoughlin's statement. I hope that they have not signalled that the committee will be faced with extensive stonewalling by both of them. I have a number of questions that I wish to raise with them and I am sure that is the same for my colleagues. In advance of making the statement, such as it is, I would like both of them to confirm that they will answer our questions. That is the least that we can expect. Both of them have listed the number of committees that their organisations have attended in the Oireachtas as though it was a chore. It is part and parcel of the democratic accountability and transparency that surrounds the very substantial amounts of public moneys that both are responsible for.

I call on Dr. McLoughlin to make his opening statement.

Dr. Ambrose McLoughlin

I thank the committee for the invitation to attend today's meeting and to make an opening statement. I am joined by Ms Bairbre Nic Aongusa, assistant secretary, who is responsible for finance and Mr. David Smith, principal officer, Department of Health.

At the outset I would like to refer to correspondence received from the clerk of the Committee of Public Accounts, dated 28 September 2012, and a further letter of clarification, dated 8 October 2012, regarding today's meeting of the committee. Enclosed with the letter of 8 October was a draft copy of a report by the Committee of Public Accounts on the HSE, dated September 2012.

Both I and my officials in the Department are fully aware of our responsibilities to assist the Committee of Public Accounts in carrying out its functions, as set out in Standing Order 163 of Dail Éireann, and to provide all appropriate information and co-operation in this regard. We are also aware of our responsibilities under the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 which expressly prohibits officials from commenting on Government policy. We are committed to complying with requirements to the best of our ability.

I am very conscious of the role of the Oireachtas in the oversight and governance of Departments and State agencies. Both the current and former Ministers for Health and myself and former Secretaries General have been fully committed to meeting our responsibilities in this regard. This is clearly evident from the record of attendances at Oireachtas committees by the Ministers for Health and-or Secretary Generals in recent years and I have outlined the details in my circulated statement.

I note that the subject matter for today's meeting is the budgetary situation in 2012 arising from meetings which the committee had with the HSE on 26 January and 28 June 2012 to discuss the 2010 Annual Report of the Comptroller and Auditor General. Members will be aware that the Department of Health was not required to attend either meeting and that the committee adopted the Comptroller and Auditor General's report at the meeting on 28 June.

The position is that the chief executive, and in this case Mr. O'Brien as the deputy chief executive, is the Accounting Officer and not the chairman of the HSE. I understand that the committee's draft report on the HSE September 2012 - which I only received yesterday evening - will also form the basis for today's meeting. The subject matter of the report is very much policy related and is outside the remit of the committee's Standing Order 163(1)(a). The fact that the committee is precluded from raising policy issues is acknowledged in its letter dated 8 October and I quote: "In order to be fully clear on the purpose of the meeting and to allay concerns about the PAC raising policy issues, which under its terms of reference it cannot, I am attaching a copy of a draft report." That means that the committee accepts that there is an issue. To address these issues, which are not yet the subject of the report, would not be appropriate and I regret that I am precluded from engaging with the committee on these matters.

The normal basis for engagement by the Secretary General of a Department with the Committee of Public Accounts is in respect of his or her role as Accounting Officer. The Accounting Officer is held to account regarding the appropriation accounts which have been examined by the Comptroller and Auditor General and any reports made by him in respect of those accounts. The Secretary General of the Department of Health would be accountable in respect of the accounts of the Office of the Minister for Health - Vote 38. The chief executive officer of the Health Service Executive is the Accounting Officer for the appropriation accounts of the HSE and is accountable to the Committee of Public Accounts for the HSE's appropriation accounts which have been examined by the Comptroller and Auditor General. On occasion, if it is deemed appropriate, the Department may be represented at meetings of the Committee of Public Accounts which are discussing the HSE's accounts, though this is not always the case.

I am happy to engage with the Comptroller and Auditor General and with the committee in a constructive, disciplined and structured manner in due course, and in accordance with the process as described above and in response to a draft report prepared by the Comptroller and Auditor General. I have attended today's meeting of the Committee of Public Accounts to explain my position in person to the Members. I look forward to engaging with both the committee and the Comptroller and Auditor General as set out in the relevant legislation and Standing Orders.

If Dr. McLoughlin heard what I read out at the beginning of the meeting - and which is read out at every meeting - he could have saved himself making an opening statement. We are just here to examine the accounts. I do not need a lecture on the role of the Committee of Public Accounts or on the legislation surrounding it. The draft report sent to him that arose from the committee's work to date is just that, a draft report. We intend to discuss the facts, figures and overruns and to get answers. I hope that he will co-operate with us on that task because that is what we do every Thursday. We arranged today's meeting at this time to suit him and the HSE. If some of the behind-the-scenes carry-on had been left to one side then we might have had a reasonable opening to the meeting. The Government Chief Whip and others were involved and it was not a good way to start today's process. If it makes people more comfortable I will say that we are legally entitled to re-open the accounts that are under review and the chapter. Perhaps we will formally do that. I formally re-open them and I hope that Dr. McLoughlin and Mr. O'Brien are comfortable with the move. I call on Deputy Michael McCarthy to commence.

I welcome Mr. O'Brien and Dr. McLoughlin and their colleagues in the Department and the HSE.

I wish to comment on a couple of different areas regarding overruns.

The first is the issue of generic drugs. It has been clear for some time that the intended savings in this area have not yet been achieved. I would welcome if the witnesses could provide information on the reason for the delay in securing a new pricing agreement for drugs. Currently, approximately 17% of our health budget goes on drugs as compared to the 9% spent by the NHS. This is a long running issue on which people would have expected some movement. Perhaps one of the witnesses would explain the reason for the delay in securing the new pricing agreement.

Dr. Ambrose McLoughlin

As I outlined in my opening statement, I regret I am precluded under section 15(1)(a) and (b) of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 from commenting on Government policy or engaging with the committee on particular matters, including the matter raised. I am happy to engage with the committee in due course in line with the relevant legislation and Standing Order and by way of a constructive, disciplined and structured response to the draft report prepared by the Comptroller and Auditor General.

I want to be helpful, however. These matters are being dealt with and I have nothing further to add.

You are a disgrace as a public official. That you, the chairman of the HSE-----

Deputy Fleming, please.

-----would treat the people of Ireland with such contempt-----

Deputy Fleming is not the lead speaker.

You are not fit for office, as chairman of the HSE and Secretary General of the Department of Health, you should resign. You are a disgrace.

Chairman, please. This is ridiculous carry on.

I have been a member of this committee for years and have never seen an attitude like this from a public official. As chairman of the HSE, if this is how you treat the public, how do you treat the patients------

Deputy Fleming.

-----that are under your remit?

Deputy Fleming is not the lead speaker.

I am saying that-----

The Deputy is not the lead speaker.

Deputy Fleming.

I will leave it at that. You are a disgrace.

Deputy McCarthy.

Perhaps Mr. O'Brien would answer my question in relation to-----

Chairman, I am leaving. I will not sit here any longer and listen to this charade of a meeting, which is a disgrace to the Oireachtas and the elected people of Ireland. Mr. O'Brien's predecessor, Mr. Cathal McGee, spoke about these issues.

As I was saying-----

We are resuming his discussion. I will not accept from you, Dr. McLoughlin, that you are not free to discuss anything-----

This is intolerable. The Deputy is doing a disservice to all of us.

-----because if other highly paid public officials acted like you it would be a disgrace to the country.

That is disgraceful.

I am leaving in protest-----

The Deputy should go then.

-----until you decide to answer the questions.

Go. That is outrageous behaviour.

Dr. Ambrose McLoughlin

Could I point out, with respect, that I said the matter was being dealt with. It is a matter of fact that there is legislation before the Houses on these matters. The relevant legislation is the reference pricing legislation. I want to be helpful in the context of what is already before the House.

I call Deputy McCarthy to continue.

There is no need for that outburst from Deputy Fleming, passionate and all as it might have been. It is a shabby reflection on us as parliamentarians. It was shameful behaviour.

Perhaps Mr. O'Brien would engage with the committee on the issue of price structuring.

Mr. Tony O'Brien

The issue of generic pricing forms part of the reference pricing legislation, the draft of which is currently before the Houses. As I understand it, under Part 4, section 21 of the Health Act 2004 it would not be appropriate for me to comment on a policy position currently being debated by the Houses of the Oireachtas.

Mr. O'Brien's predecessor, Mr. McGee, appeared before us earlier in the year and engaged fully with us on the issues of the pricing of generic drugs and agency staff, which is the next issue with which I will deal.

On agency staff, what type of formula is used in terms of costing the hiring of an agency nurse versus a nurse employed directly by the HSE?

Mr. Tony O'Brien

On the generic pricing issue, the legislation referred to would not have been before the House when Mr. McGee appeared before the committee. On the issue of agency staff, there is effectively a market price for agency staff, which includes the effect of recent directives which changed that pricing. Our objective at all times is to minimise the reliance on agency staff. As is known, in the course of the year there was a significant departure of staff from the HSE in light of the grace period scheme, which increased the reliance on agency staff at that time. There is not a set formula as such. We are working towards a minimisation. A number of measures, which have been in the public domain recently, are directed at this.

What is the target of the HSE in terms of reducing the number of agency staff? Mr. McGee made the point that 50% was an unrealistic target. What is the current target in terms of reducing the number of agency staff?

Mr. Tony O'Brien

At this point and for the remainder of the year it is to bring it down to the minimum that is safe in the context of providing safe services.

What was the impact of the departure of staff by way of retirement on February 29? Did this create a need for more agency staff?

Mr. Tony O'Brien

The difficulty related to the number of staff who left in relative close proximity to each other rather than to the total number leaving in the course of a full year. The fact that there was a predetermined date by which a large number of staff had to leave would have created a particular challenge. However, the number of staff leaving the health service in the course of any given year would not necessarily differ from the number which left during that period. It was the coming together of that number of staff leaving that created the difficulty.

How many former employees of the HSE are now working as agency staff in various hospitals?

Mr. Tony O'Brien

We do not have that information with us. I noted a reference to it in the draft report, which as I said, was only received yesterday afternoon. The position is that once people leave they are entitled to work for third party employers. We can, however, look into that matter. Perhaps Mr. Woods would like to comment.

Mr. Liam Woods

We do not have systems which identify that. We would have to work with our HR people to try to identify like names across different databases.

Perhaps the witnesses could make that information available to the committee at a future date.

Mr. Tony O'Brien

As I said in my opening statement, we are happy to work with the committee in the context of ensuring the accuracy of the draft report received. Having only received it yesterday, we are presented with a challenge. Given an appropriate period, we would be happy to work with the committee in that regard.

The next issue of concern is consultants not signing forms for insurers and the difficulty this is causing. In one case, the HSE had not received €500,000 because a consultant in Galway had not signed the form for the insurers. There is approximately €15 million outstanding owing to the failure of consultants to sign forms. Has this been addressed? If not, how does Mr. O'Brien intend to address it?

Mr. Tony O'Brien

In fairness to the majority of consultants working in the public service, this is not a problem general to all consultants but to some of them. However, it is a significant issue. I spoke of this at the most recent meeting of the Joint Committee on Health and Children I attended. This issue also formed part of the discussions at the Labour Relations Commission that involved the two bodies representing consultants. It is part of the consultations and processes under way in regard to that agreement. We are looking in greater detail at the information. As I said at the meeting of the Joint Committee on Health and Children, we are moving towards, subject to data protection issues, publication of granular information which would not identify patients but would clearly identify those persons who are not discharging their responsibilities in terms of the signing of forms. There is a significant amount of money at stake at any given time. It is primarily a cash flow issue. If the forms were signed quickly more cash would be brought forward and the position would, it is hoped, be kept up to date.

With regard to the agreement on consultants' contracts - I understand if Mr. O'Brien cannot venture into this as it might permeate into the area of Government policy - I understand the consultants have not yet subscribed to the Labour Court recommendation. There is a body of thought that they have and that savings of €30 million per annum would be achieved. At what stage is the arrangement with the consultants?

Mr. Tony O'Brien

The current position is that a Labour Relations Commission mediated deal was signed by the representative bodies some weeks ago. There has been engagement with those bodies and there is to be a further meeting in the coming days. We are moving towards implementation of the deal in early November. It is important I do not prejudice the discussions while they are ongoing.

In recent times, the insurance companies made available the information that 1,800 consultants shared €386 million in respect of the treatment of private patients up to end June this year. How much of this money was paid to consultants who did private work undertaken in public hospitals?

Mr. Tony O'Brien

The HSE would not have that information, I am afraid. That would have to be obtained from the insurers in question.

Would Mr. O'Brien know the extent of use of public facilities by consultants for their private patients? Is there any estimate?

Mr. Liam Woods

We do not have any information on the income of consultants. We know the income of the hospitals, but not the consultants.

Does Mr Woods have any idea of the extent to which those public facilities are being used by consultants for private patients? I am sure the hospital managers have an idea.

Mr. Liam Woods

In terms of bed-day utilisation, we do know that and we have reported that previously. I thought that was what the Deputy meant - we have answered that in parliamentary questions to some members present. On the issue of consultants' personal income, we do not have data; on bed-day utilisation we do.

What is the most recent information on that?

Mr. Liam Woods

We can get data up to the end of August in terms of bed-day utilisation. I do not have that in front of me here, but we can certainly get that for the Deputy. We would certainly be managing the utilisation of those beds for private purposes.

How many medical cards are in circulation?

Ms Laverne McGuinness

There are 1.83 million medical cards. This year alone up to the end of September, we have issued 144,000 medical cards. The target set out in the service plan for 2012 was 105,000, so we are 39,000 ahead of target at this stage.

It is obviously a significant issue and if the economy does not recover, more people will lose jobs and find themselves applying for medical cards. Has the HSE considered changing the means test to make it more difficult to obtain medical cards?

Mr. Tony O'Brien

Deputy McCarthy is taking us into an area of policy. The HSE would not have the authority to change eligibility in relation to medical cards.

Mr. Tony O'Brien

No, this is a matter of eligibility which is regulated essentially through the Estimates in the budget process each year and not by the HSE itself.

There might be occasions where people's circumstances change and they might no longer be eligible for a medical card. What percentage of medical cards are surrendered because of a change in circumstances?

Ms Laverne McGuinness

We can get that specific information for the Deputy. It varies from time to time because medical cards are reviewed - some of them after five years and some of them after three years depending on the circumstances of the particular applicant. The longer periods of time are extended to people who have a long-term illnesses and so forth. We can come back to the committee with that specific information.

I will conclude on that. I wish to say that despite the feeling on this side of the room, I am absolutely ashamed that any member would treat public officials in the manner that one Deputy treated Dr. McLoughlin. I am embarrassed by that. I can only speak for myself. I found that humiliating and a bad reflection on the Committee of Public Accounts. I want to be completely disassociated from it. I thank the witnesses for the level of engagement we have had.

I ask for clarification as to why the HSE and the Department of Health only received the report yesterday. Are we in agreement that the report only went to them yesterday? It would be helpful because the issue has come up quite a few times.

This is a draft report. We do not usually circulate the report beforehand. It was out of courtesy and to inform the HSE and the Department where they stood on the draft report that it was sent. That is the only reason. I do not understand why Mr. O'Brien and Dr. McLoughlin refer to it as a big issue; it is not. What are at issue here are the facts and figures as borne out by Deputy McCarthy's questions.

I have established that is the reason and I thank the Chairman. I congratulate, if that is the right term, Mr. O'Brien and Dr. McLoughlin on their appointments and wish them well in their roles. Of all the Committee of Public Accounts meetings, the meetings we have had with representatives of the HSE have been most engaging. We have previously engaged with Mr. Crowley, Mr. Woods and Ms McGuinness. While the meeting got off to a rocky start on both sides, I believe we need to - I do not think there is a parliamentary word for it - "chillax". Everyone needs to take a step back here. If the witnesses want to come in here and stonewall, that will not work. If people here want to grandstand, that is not serving the interests of the taxpayer either. A number of issues, which predate Mr. O'Brien's and Dr. McLoughlin's appointments, have come up in our many meetings with Mr. O'Brien's predecessor, Mr. Cathal Magee. We have either not received satisfactory answers or we need an update.

While I do not tend to go near the area of policy, any member of the public, sitting at home watching these proceedings tonight after a day's work and worrying how to pay the next bill, simply wants to know why the HSE budget cannot be managed. I ask for some insight into the financial systems that are in place. At what stage is the HSE in tackling the legacy issues? It would be very helpful to begin with that. What is the most recent figure available for the HSE budget overrun?

Dr. Ambrose McLoughlin

I am happy to share with the committee on the understanding that this is work in progress. We have commissioned a number of studies. The Minister invited Mr. Ogden to examine the financial affairs of the HSE and to examine in particular its strengths and weaknesses in respect of financial management. We have a report from Mr. Ogden which is currently being worked through by the HSE. We also have an implementation report which is a work in progress. I assure the committee that I cannot be more helpful than that because the Minister is proposing to deal with these matters at an early date. I can assure the committee of the very best efforts of the Department of Health and the HSE to put in place a proper management system from a financial perspective. I do want to make it clear as well that there are constraints on me as Secretary General that are very serious. There are policy matters that are being dealt with at the minute. It is a matter for the Minister to make these announcements in due course on some of the issues to which the Deputy referred. I can assure him that progress is being made on all of the headings.

I would like to reassure the committee as well that the Minister, I as Secretary General and my predecessor always wanted and had the full co-operation of the HSE in respect of any of the matters outlined. There was no failure on the part of the Department of Health in respect of these matters - they are works in progress. Dealing with issues around drug pricing is a very complex and difficult business when one is negotiating with an industry that is responsible for a very significant €40 billion a year industry in Ireland with 25,000 jobs and another 100,000 support jobs. We had to deal with these issues in a very sensitive way.

In relation to the income collection and all the other issues, in the fullness of time this committee and other committees will hear of very significant progress that has been made in these areas and I can assure the committee of our very best efforts to deal with it. The issues in relation to the funding of health care across the world are very complex and difficult.

I apologise to Dr. McLoughlin. I want to be respectful and will not engage in the shouting and screaming of others. Can one of the witnesses give me the most up-to-date position on the HSE budget overrun?

Dr. Ambrose McLoughlin

I am sure Mr. O'Brien can do that.

Mr. Tony O'Brien

The most recent position is the Vote report return for a 30 September 2012. I should clarify what a Vote report return is. It contains two critical pieces of information.

I ask Mr O'Brien to speak up a bit.

Mr. Tony O'Brien

I apologise; I was looking downwards. I will get into the mode.

Upwards and onwards.

Mr. Tony O'Brien

The Vote report contains two key pieces of information and I will share them both with the committee. One is the net position which tells us where we were in actual terms on the date of the report. On the date of the report, which is up to the date 30 September 2012, the figure reported is a net current overspend of €374 million versus €329 million at the end of August 2012.

How much was it at the end of August?

Mr. Tony O'Brien

At the end of August it was €329 million and at the end of September it was €374 million. What page do I find the next piece of information on? I am still not quite used to the flow of these documents and I am trying to find the relevant figure.

Would Mr. Woods like to come in?

Mr. Liam Woods

What the Vote report is saying, as the CEO is reflecting, is that there is a real Vote issue at the end of September of €374 million. That is akin to cash utilisation or a very close approximation to cash utilisation. That is made up of a couple of key components. There is a €303 million problem of what we would call the gross current expenditure, which is the spend by the system, and there is a €69 million problem in cash collection associated with income. There is a small surplus in capital, which is offsetting, which is giving-----

What is the €69 million?

Mr. Liam Woods

It is cash collection income.

Is it an accrual?

Mr. Liam Woods

No, it is a shortfall in the collection of cash, primarily associated with maintenance charges and private insurance.

The €374 million is made up of a number of components. I am just describing the gross spend in the system. Hospitals and community care spending is in excess by €303 million and there is an income issue separately of €69 million.

Has Mr. Woods a projection for the end of year overspend for the HSE?

Mr. Liam Woods

We are working on the basis that we have to achieve a balanced Vote by the end of the year as part of our normal interaction with the Department of Public Expenditure and Reform and within the HSE so our challenge is to get a balanced Vote and the measures we have under way are intended to move us in that direction.

The Deputy asked a question about systems. At the moment, we have eight primary legacy systems, which are what he would understand to be the health board systems that existed some time back. We import all that information into one central database and we also import more than 50 sets of data from voluntary bodies, which we amalgamate to produce a single set of financial reports on a monthly basis. As has been referenced by the chief executive officer and the Secretary General, our desire is to have a single system that does that automatically and in a much more efficient way, which would support effective financial management, but that is what we are working with at the moment.

Mr. Woods referred to the fact that the HSE is trying to achieve a balanced budget. What active measures is the executive taking on a day-to-day basis? I refer to the phrase that sends a chill down people's spines. They do not believe it when we talk about "non-front line savings". I have read that the HSE intends to achieve €72.5 million non-front line savings. What is the up-to-date position on how that is going? Where is that happening?

Mr. Tony O'Brien

The issue of the €72 million is in the public domain and it relates to cash management, given we are referring to a cash as opposed to an accruals based method of accounting. It also refers to stock management; a number of areas to do with procurement, in other words, reducing some areas of procurement; significant curtailments in discretionary expenditure around such areas as staff travel, printing and so on, which we are simply not doing anymore; and it includes €6 million related to the discontinuation of funding for certain products, such as glucosamine. Those measures are going well. By their nature, they are back loaded because cash management and stock control reductions are very much loaded towards the end of the year, but there is significant experience in the HSE regarding those measures and we are confident they will land.

The national media also reported Mr. Woods alluding to €125 million for collection in moneys owed by insurers, which would go some way towards assisting the HSE with its deficit. What is the updated position on the collection of this money?

Mr. Tony O'Brien

That is currently the subject of significant and intense engagement between the Department of Health with HSE involvement and the relevant parties and I do not wish to prejudice those processes at this time.

I have just looked through the figures in the HSE's July performance report. I could be wrong but I cannot find a hospital in budget. Is that correct? I have looked through them all. Louth County Hospital had used its entire budget by the end of July. That was the highest with 67% spent by the end of June. No hospital is in budget. These are the questions I want to get a feel for: why is no hospital operating within its budget? Are they being given false budgets to start with? Are the figures built on sand at the beginning of the year or are hospitals not being managed correctly? Can anyone give me a sense of that because I have yet to find a hospital within budget at the end of July? I am open to correction.

Mr. Tony O'Brien

I think the Deputy will find those figures are against profile rather than against the end of year position.

Will Mr. O'Brien explain that?

Mr. Tony O'Brien

In other words, if they are shown as in deficit and-or surplus at any given point, it is against their expected or desired position at that point in the year. The percentages are against their profile to that point rather than their full year position.

I take that point but my question still stands. This is a budget management as opposed to a policy question. Is the problem that budgets are mismanaged and the HSE does not have the calibre of people to manage budgets within hospitals? Why is no hospital within budget?

Mr. Tony O'Brien

There are undoubtedly a variety of answers to that question rather than a single one. To answer at a general level, hospitals are required to reduce their spend very considerably this year in line with the overall reduction in funding to the HSE and a number of hospitals carried forward reasonably significant deficit positions arising from their end of year position in 2011. Many hospitals are performing reasonably well in their in year position or what is known as their run rate while still carrying the deficit. I cite an example of a hospital which came into the year carrying a €23 million deficit and had to sustain a €12 million reduction in its in year funding. It has successfully done that by making significant improvements in its accident and emergency department, treatment waiting times and so on but, nonetheless, it is not yet in a position to manage down its carried forward deficit.

Each hospital will have a different story but it may be helpful to address an earlier question of the Deputy's, which related to the issue of the current position this year versus previous years. Over successive years, in what we believed were the good times and now know were not and the less good times, there were successive periods during which the HSE ran into financial difficulties at or about this time of year - sometimes a little sooner or a little later - so this is not a current year issue. I believe that the absence of contemporary accounting systems - unified accounting systems of the type one would expect to see in an organisation of this size and complexity - is a significant contributory factor to that challenge. In addition, in this particular year, the HSE faces what might be broadly referred to as significant demand-led challenges. The number of patients presenting in accident and emergency departments is significantly up. We have referenced the detail of the number of additional persons over and above the number expected who have become eligible for medical cards and, therefore, have received medical cards. It may be instructive to note that if everything else had gone absolutely perfectly, the HSE would probably be on track without corrective measures. There is something approaching a €200 million deficit on that account alone so aspects of the HSE's operations are difficult to control, financially speaking, because of the nature of eligibility and the nature of demand. That is an important factor to be taken into account but I do not in any way wish to diminish the significance of the absence of some of the basic enterprise-type systems which would go a long way to helping an organisation of the scale and complexity of the HSE to manage its affairs more effectively. That is not, however, the total story; it is much more complex.

That is a fair point and we often presume that during what Mr. O'Brien referred to as the good old times everything ran smoothly in the HSE from a budgetary point of view and that was clearly not the case.

I would like to return to the issue of agency staff. With regard to the committee's relationship with the HSE, Mr. O'Brien's predecessor told us, as Deputy McCarthy said, that the planned 50% reduction in the use of agency staff was "unrealistic". It does not inspire confidence in a system when the Accounting Officer describes budgetary aims he is charged with implementing as unrealistic. I do not ask Mr. O'Brien to comment on that but can he outline his perspective on the reduction in agency staff? Was 50% a realistic target? Is there a new target now? Where does that stand?

Mr. Tony O'Brien

History shows that it has been a challenging target. As I mentioned to the committee member who left us earlier, the current position is to manage down reliance on agency and overtime, which includes a focus on absenteeism, to the minimum level possible consistent with maintaining safe services. Agency and overtime in some of our hospitals is an underlying fact of their operation because of their geographic location and mix of services. Some hospitals depend disproportionately on agency staff in the medical and nursing areas, whereas other hospitals that do not have the same issues tend to rely on them in the context of surge capacity and covering gaps left by excessive levels of absenteeism. It is not a uniform picture. In the context of seeking to manage this, the critical issue is to spend the minimum amount but to do so in a way that does not disrupt the safe provision of care to patients who need it.

At the last committee meeting Mr. Magee attended, I asked a question on the number of people working in the HSE in receipt of salaries in excess of €70,000, the number of those individuals in line to receive an increment this year and the cost of those increments. At the time, Mr. Magee did not have the information available, which was understandable, and I was told the information would be sent on to the committee. The committee then received a note from the HSE saying the information was not available because it was not collated. One of my colleagues, who left earlier, obtained information through a parliamentary question on the number of people who earn over €100,000 and the cost of their increments. Increments, and the question of whether they are paid, is a policy matter and not an issue for the HSE. However, in terms of accounting for its budget and its spending, I am confused as to why the information was not available to the committee when it sought the information in correspondence. When a parliamentary question was tabled, the information was available. I was baffled that the data were not available. I wonder if the data are available in parliamentary questions but not to the Committee of Public Accounts. It does not seem to tally.

Mr. Tony O'Brien

Any information available in response to a parliamentary question should and will be made available to the committee. I am not familiar with the details of that question.

It arose from the meeting on 28 June and I do not expect Mr. O'Brien to be familiar with it.

Mr. Tony O'Brien

I will look into that matter.

In challenging times, the more information we have available, the better.

Mr. Liam Woods

We can identify who is paid what and the question put by Deputy Harris is whether this is the case. The response in the documentation sent to the committee after the last session concerned identifying the number of people earning over €70,000 who were paid increments. The system issue arose in trying to identify how many people earning over €70,000 were paid increments. It is not difficult to identify how many people are paid over €70,000. We can do so in a relatively straightforward manner. I hear the point made by Deputy Harris about those earning over €100,000.

I do not mean to be pedantic but the HSE knew there were increments totalling €377,000 being paid to those earning over €100,000 in that year.

Mr. Liam Woods

I take the Deputy's point but we were not saying that we could not identify the number of people earning over €70,000. We will look at the increments element.

I would appreciate that.

Since Mr. O'Brien has assumed his position, is there a skill set that must be further enhanced within the HSE in respect of financial management? I do not mean this as a policy question. When we are told about these legacy systems and the overrunning budgets, is the embargo on recruitment having a negative impact on the ability of the HSE to manage its budgets? There is a responsibility on this House to provide the resources needed to manage budgets but clearly budgets are not being managed. Is the embargo having an impact on the ability of the HSE to manage budgets?

Mr. Tony O'Brien

It is hard to give a straight answer to the question because it requires some thought. In general, given that it must live within a particular ceiling, the HSE is not without the ability to seek specific skills where necessary. For example, there is a requirement for a chief financial officer for the mid-western regional hospitals group in order to strengthen financial management as part of the development of that group. Recruitment is taking place through the Public Appointments Service. It is certainly not the case that the effect of the blanket moratorium limits our ability to address those deficits because we are seeking to do so at present.

I do not want to harp on about the fiery start to this meeting but, given that both gentlemen are new to their jobs, I hope that their statements "pleading the fifth", to use the term, do not represent the manner in which they will proceed in interaction with Oireachtas committees. It would be a backward step to do so. When Mr. O'Brien's predecessor, Mr. Magee, appeared before the committee, he was always fully frank in whatever he had to tell us. There was never any conflict or controversy when matters strayed into policy. There was no sense of concealment of information and I would like to think both of the witnesses will approach the interaction with the committee in that spirit.

An overrun in August of €320 million has increased to €374 million and it is reasonable to say that, all things being equal and projecting on the basis of the status quo, towards the end of the year the budgetary overrun, in real terms, will be €509 million. Is that the case?

Mr. Tony O'Brien

Is it correct that Deputy McDonald's maths are correct? That is not our projection.

Pleading the fifth carries a particular connotation. When our colleagues in the United States plead the fifth, they do so on the grounds that anything they say might incriminate them. Neither Dr. McLoughlin nor I made any such submission to the committee.

My maths are correct so the HSE is looking at a potential overrun of €509 million. Deputy Harris asked about the €78 million that can be clawed back from savings through non-front line activities. That leads me to the conclusion that the HSE is looking to secure additional savings of €431 million to achieve a balanced budget. Is that correct?

Mr. Tony O'Brien

The figure Deputy Harris talked about was €72 million. Other than that, the maths are correct.

That brings us up to €438 million. That is a huge amount of ground to make. In pursuing this line of questioning, I take the view that too much has been hacked from the health budget. I would like the witnesses to help me navigate through the savings of €438 million. If I have understood them correctly, the figure will represent savings from the front line.

Mr. Tony O'Brien

No, that is not correct. I can tell the Deputy that savings from the front line amount to the difference between €130 million and €72 million. The other issues relate to policy matters.

Do these policy matters relate to generic drugs and the savings to accrue from the private use of public hospital beds? Are these the tranches of policy in which the witnesses envisage the balance of savings to be made?

Mr. Tony O'Brien

Not on their own.

Can Mr. O'Brien amplify his response?

Can Mr. O'Brien list the policy matters in which he will make his savings? It would be helpful, without going into the policy, so that we know the area we are talking about.

Dr. Ambrose McLoughlin

As I have already indicated the Minister, Mr. O'Brien and I have been working very effectively on addressing many of the existing issues such as the private insurance income and savings in respect of drugs. Members will appreciate that I am constrained in that I do not want to prejudice the position of the Exchequer by going into detail but I want to assure the committee that all of these issues are and have been taken account of and are being dealt with very competently. I expect the Minister will make appropriate announcements in due course.

Will Dr. McLoughlin identify the areas?

Dr. Ambrose McLoughlin

I am quite happy to indicate that the Irish Pharmaceutical Healthcare Association, IPHA, agreement relates to savings in the cost of medicines. There is work in progress and the issues are being dealt with. There are discussions also with the Association of Pharmaceutical Manufacturers in Ireland, APMI, the generic manufacturers, but I am constrained in the detail that I can go into.

The interrogation of all aspects of health spending is being undertaken by my Department and every single source of funding or potential funding to deal with this deficit is being looked at. In due course when the committee examines the accounts from the HSE, it will see that we are working with a very difficult and challenging situation but doing so in a constructive way. The issues around income collection, drug costs, and as been mentioned by Deputy Simon Harris, consultants pay, and other issues are being addressed. These are complex and difficult issues and many of which are policy issues. Nobody would be happier to be freed up from the constraints and be able to bring the members into the detail of these things but I cannot at this point.

I thank Dr. McLoughlin for his contribution. He is stating that the shortfall, which in real terms, to achieve the balance target, is a saving of €438 million, can be made and will be made by year end. Is that the position of the HSE and the Department of Health?

Dr. Ambrose McLoughlin

I am genuinely precluded at this point from being very specific. I can assure Deputy McDonald that at the end of the year, the situation will not be to the level she has described. I am constrained in going into detail.

I am not asking for the figure to the euro and to the cent, but a simple mathematical exercise which I have undertaken - let me assure everybody that I do not claim mathematical brilliance - tells us that in real terms the overrun by year end will be in the neighbourhood of €509 million, which is more than €0.5 billion. There is €72 million in respect of cash management flow, but this still leaves a massive hole in the budget. I am not looking for specifics but I want the HSE and the Department to tell us whether that €438 million cut is realisable. Dr. McLoughlin is saying that it is, he is identifying various policy measures which will kick in by year end to make up that shortfall. If I am not mistaken, he is saying that a figure in the range of only €130 million to €172 million will be the cut to the front line. I am not looking for the detail, but I ask Dr. McLoughlin to set out the blocks.

Dr. Ambrose McLoughlin

I want to be as helpful as I can. The position is that €130 million will be saved between 1 October and 31 December, as Mr. O'Brien has indicated. That level of saving will be made. There are a variety of other policy measures which will help the situation. I am not in a position to be specific about them as this point. I believe they will be substantial.

I must make this point. The HSE is obliged legally to balance its Vote. That was the position in respect of Mr. Magee and it is the position in respect of Mr. O'Brien. We will do everything in the Department to assist the balancing of that Vote. I am very happy to answer in detail any questions at a later point, but I am precluded because of policy issues from going any further than I have indicated.

Clearly, there are policy issues, but for both the Department and the HSE to come before an auditing committee one has to talk through the figures. Without getting into the fine detail of policy choices, they must at a minimum be able to reassure us that a balanced budget can be struck, and furthermore in the public interest, to assure people, I am not sure how they do this, that it will not be at the expense of annihilating further front line services. It strikes me that Dr. McLoughlin is making a claim - this has been repeated here several times - that a balanced budget will be struck. He has not queried the figures that I have given to him. He asserts that it will not affect front-line services. I find it extraordinary, if all of that is true. I do not see where the Department will get its €438 million. I do not see where he conjures this resource from, unless he goes to the front line.

Mr. Tony O'Brien

Let me address the Deputy's questions with the permission of the Chair. Of the €130 million, €72 million are not directed at the front line, they are in areas I mentioned earlier, namely, cash management, stock management, changing the procurement practice, travel, printing and so on. That leaves €58 million. We did announce at the end of August, that figure would come from front-line services. We also made clear that we would be managing them carefully against risk assessment processes and looking for all other measures that could be taken in the meantime to avoid any of those cuts. We are continuing to do that.

Is Mr. O'Brien saying that he will balance the books---

Mr. Tony O'Brien

No, I have not finished yet.

---and bridge that gap and only take €58 million of a cut from front-line services? Is that Mr. O'Brien's position?

Mr. Tony O'Brien

That is the position that has been outlined. The balance of the measures are essentially on the income side. I became deputy or acting chief executive officer of the HSE towards the end of August. At that point I indicated clearly and in the public domain that the HSE was on track for a deficit in the order of €500 million unless various corrective measures were taken. The measures we outlined on the expenditure side related to the €130 million that we have just discussed. Dr. McLoughlin has referred to a number of policy measures that are designed to improve the income side.

I grasped that point. The problem with that scenario is that this year, reducing the cost of drugs was to bring in €124 million, but that has not happened. The recouping of the full cost of private beds in public hospitals was supposed to yield €143 million, that did not materialise. What worries me is that the witnesses are working on an assumption that by year end, that is 2012, they will secure these moneys. I wish it could be so and I wish them well in their task, but I find it extraordinary that they are telling us they will fill a hole of €0.5 billion in the budget, taking only an additional €58 million from front-line services and on the basis of policy decisions and policy measures, which were announced last year but did not come to pass, which arguably have left the current hole in the budget. On a basic analysis I do not see how the figures stack up.

Mr. Tony O'Brien

I understand Deputy McDonald's position, which she has articulated clearly. I think we have articulated equally clearly our understanding of the position. One of the challenges of doing this live is that we can each express our opinion of what might or might not happen, but typically in this forum we are looking back at what actually did happen.

Does Mr. O'Brien understand the value of discussing the issues in a forum like this as things are happening, because this is not a theoretical exercise we are engaged in? He knows as well as I do that this is about the services that people receive in real time, in the here and now.

Mr. Tony O'Brien

Absolutely I do understand that but the issue is that to get into any detailed discussion on some of those issues, which are the subject of negotiations in various fora, could prejudice the very position we are trying to achieve.

That is one of the issues that led us to have the concerns we chose to express. I hear what the Chairman and others have said about those concerns but if we were to go into great detail about them, we would prejudice the outcome we are trying to achieve, which would be to the detriment of us all.

I understand that Mr. O'Brien and Dr. McLoughlin are members of the Cabinet sub-committee on health. Am I correct in that assumption?

Mr. Tony O'Brien

Only members of the Cabinet are members of Cabinet sub-committees.

The Taoiseach told the Dáil that Mr. O'Brien's predecessor at the HSE and the Secretary General from the Department of Health and Children attended the Cabinet sub-committee on health. That is the case.

Mr. Tony O'Brien

It is certainly true that I have attended these meetings and hope to attend them in future but I am not a member of that sub-committee.

Pardon the semantics but Mr. O'Brien is in attendance at that sub-committee. In terms of having that discussion with the Minister who makes the policy decisions, I hope his budgetary projections are a bit more robust. I do not see how the HSE can find €500 million by cutting €58 million from the front line. I do not buy that. I know we will have the chance retrospectively to trawl over it. With all due respect, I would prefer if the Accounting Officers for the HSE and the Department of Health and Children were a bit more proactive in arguing the case for the preservation of services and for a reasoned budget that can actually deliver. I do not see any evidence of them doing that. What is in the budget for primary health care centres? What is the allocation for those?

Dr. Ambrose McLoughlin

Is the Deputy referring to the capital expenditure? In the stimulus package, it is €115 million.

Does that cover the 35 primary health care centre locations as announced by the Minister?

Dr. Ambrose McLoughlin

There are two bundles of ten each.

It covers the 20 and there is no provision for the additional 15.

Dr. Ambrose McLoughlin

It is a decision of the Minister and Government to seek bids from 35 with a view to ensuring they deliver 20.

I want to make it clear that I am not asking Dr. McLoughlin to second-guess or overstep the Minister. What was Dr. McLoughlin's interaction with the Minister on the criteria agreed for the delivery of these centres?

Dr. Ambrose McLoughlin

I am not in a position to answer that question. I wish to return to another point to be helpful.

Could Dr. McLoughlin repeat the figure? Is it 20 primary care centres?

Dr. Ambrose McLoughlin

The figure is 20 - two bundles of ten - and an additional 15 with a view to attracting interest from 35.

Can I remind members and others attending to turn off their mobile phones as there is constant interference?

Just to clarify that point, the intention is to build 20 of the 35.

Dr. Ambrose McLoughlin

Yes, in bundles of ten.

In two bundles of ten. It is not the intention to build 35.

Dr. Ambrose McLoughlin

The Minister has made it clear in the public domain that he would like to build a couple of hundred primary care centres. I believe a figure of 339 is under consideration by the HSE.

Okay. When the budgeting for those health care centres was under way, obviously a decision was made in terms of the capital allocation for it, which was, quite correctly, the call of the Minister. The decision making around which centres might be built was clearly taken on by the Minister. In terms of the Department's internal management, I presume there is a paper trail or documentation of the unfolding process of identification of the 20 sites and the addition of the 15. I have the broad assumption that both the Department and the HSE would have been involved in that.

Mr. Tony O'Brien

The process of identification of prospective primary care centre sites has been under way since 2007.

Mr. Tony O'Brien

It was the subject of a Comptroller and Auditor General chapter that was considered by this committee on 26 January this year, if I am correct. I am not sure it bears directly on the financial position of the HSE this year, but I can say there has been extensive engagement and dialogue in respect of not only the totality of the centres but also the methodology by which each of them might most appropriately be delivered. Dr. McLoughlin has referred to the stimulus package, which is essentially what is known as a PPP, public-private partnership. These centres can be delivered by two other modalities: conventional capital build and by a process known as lease acquisition. There is a provision in the capital plan and this provision as well. Centres that might not be delivered by one mechanism could be delivered by another. We can look upon the stimulus package and the other provisions as mutual insurance policies against the failure to deliver any of the centres by one means or another, given that there are a huge amount of variables at play in respect of the methods by which these centres are developed. These variables include the willingness and participation of general practitioners, availability of lands in the right place and so on. It is quite a complicated picture.

Those things were identified very publicly by the Minister as additional criteria to be applied in terms of expanding the list.

Mr. Tony O'Brien

I cannot comment on what the Minister said but I can say that the process of classifying centres as to which way they are most likely to be capable of being delivered is an ongoing and iterative process based on assessments made by the relevant personnel in the estates and capital division of the HSE on a continuous and ongoing basis.

The HSE would have been centrally involved in terms of applying the criteria in respect of drawing up these lists.

Mr. Tony O'Brien

The totality of the list, which exceeds 300-----

I am aware of that.

Mr. Tony O'Brien

-----was drawn up by the HSE. The process of soliciting expressions of interest from prospective partners or bidders was managed entirely by the HSE. The selection of prospective bidders and the identification of sites was managed entirely by the HSE and negotiations with prospective parties who would develop the centres has been managed entirely by the HSE.

Was the drawing up of the list of 20 and its expansion to 35 driven by the HSE as well?

Mr. Tony O'Brien

The figure of 20 simply correlates to what is likely can be developed within the financial envelope available for the stimulus package at €115 million.

I am not questioning that but, obviously, criteria had to be applied to correspond with the financial envelope.

Mr. Tony O'Brien

The Minister has already been on the record of the House and has outlined this in considerable detail. I am not sure if it is helpful for-----

It would be very helpful for Mr. O'Brien, as the Accounting Officer for the HSE, to tell us the role and involvement of the HSE in identifying those 20 locations and the additional 15.

Mr. Tony O'Brien

All of the centres were identified as priority sites within the meaning of 300 being considered priority sites by the HSE, if the Deputy takes my meaning.

I understand, but I am talking specifically about the list of 20 and the extended list of 35. What was the HSE's role? I understand it was a much longer list but what was the HSE's role in terms of saying which would be the 20 and then the additional 15?

Is that not a policy issue?

I do not accept that it is. The policy in terms of the decision as to what the criteria might be is clearly a policy matter. That is the kick for the Minister but the application of the criteria, which I am trying to establish here, would be with the involvement of or led out by the HSE and the Department. I am trying to establish the role of the HSE in compiling the list of 20 and then the longer list of 35 with the additional 15 sites.

Mr. Tony O'Brien

As has been placed on the record, and I wish to be very clear that I am not seeking to add to what the Minister has said, the Minister made it very clear that a list of 20 was developed and a decision was made to increase that number from 20 to 35 for the reasons the Secretary General has outlined.

All of the centres were drawn from the original list developed by the HSE.

The HSE would, therefore, have been involved in applying the deprivation index. That is how the first 20 were arrived at.

Mr. Tony O'Brien

The HSE's personnel would have been involved in relation to the deprivation index.

The HSE would have been involved in applying the additional criteria to identify the additional 15.

Mr. Tony O'Brien

The deprivation index has been used in two different ways in this process - in its pure form as a one-times multiplier and then in the manner of a three-times multiplier. The HSE was simply involved in ordering the centres in relation to those two categories and providing that list.

In other words, the HSE applied the deprivation index according to the three-times multiplier, after which there would have been a certain ordering of the 300 centres that were already drawn up from 2007, as Mr. O'Brien indicated.

Mr. Tony O'Brien

I believe I understand where the Deputy is going but the deprivation index is but one part of the equation. One will find that the list of 20, as mentioned by the Deputy, does not contain the top 20 according to the deprivation index. One will find that they are the 20 sites identified as most likely to be most effectively delivered via the stimulus package through the PPP. It is not because they were the top 20 according to the deprivation index. There has been a lot of debate and there may be some confusion about this, but the centres are not ordered from one to 20 according to the deprivation index either by the one-times multiplier or the three-times multiplier.

What was the change regarding the additional 15?

Mr. Tony O'Brien

As I have said to the Deputy, the decision to add 15 was not made by the HSE; it was, as outlined by the Secretary General, a policy decision based on the judgment on the need to go to a higher number in order to achieve deliverability.

Just so we are clear, the HSE did not have the same involvement in terms of adding the additional 15 sites. I understand HSE personnel were deeply involved in applying the criteria, that the list was drawn up and 20 centres were identified. Is that where the HSE's involvement ended?

Mr. Tony O'Brien

As regards the interval between that and the announcement of the stimulus package, the answer is "Yes". However, the HSE is, of course, deeply involved in the delivery of primary care centres.

I understand that, but I am still dealing with selection. Had the HSE any involvement in terms of identifying the additional 15 sites? I understand from the witnesses that it did not.

Mr. Tony O'Brien

I am loth to say the HSE had no involvement because that would require my verifying with every member of staff who could potentially have been involved whether they provided any further technical information in regard to the deliverability of individual sites. That is not a question I have asked at this point. I cannot, therefore, give the Deputy assurance.

That is interesting. I find that somewhat astonishing. I would have believed that Mr. O'Brien would have asked. I would have assumed that the pool of people who would have been deeply involved with the application of criteria and the drawing up of lists would have been fairly limited. I did not believe an extensive trawl of staff would be required. Mr. O'Brien has been quite categorical in stating he had a particular involvement in respect of the initial list. On the drawing up of the list, a decision was taken by the Minister, which is his kick. The HSE was not so involved or, according to Mr. O'Brien, not involved at all, in identifying the additional sites. Is that the case?

Mr. Tony O'Brien

I have just told the Deputy I cannot give a categorical assurance that no member of the HSE's personal was involved. However, I can say-----

Can Mr. O'Brien check that?

Mr. Tony O'Brien

I am happy to do so.

That process was mentioned in the 2011 report. Perhaps it can be revisited in light of that at another stage.

Dr. Ambrose McLoughlin

I ask the Chairman to allow me to offer clarification on questions put by Deputy Mary Lou McDonald on the deficits of the HSE. We should make it clear, of course, that these matters are under active consideration by the Government and that the outcome at the end of the year will be determined in consultation with the Government. The Department of Health and the Department of Public Expenditure and Reform are working very closely with the HSE to achieve a balanced Vote. It is important that I put that on the record because the issues are quite serious. I assure the public that services will continue to be provided at a very high level of quality and safety. Patients need not be upset or concerned about these issues; we will deal with them all in a sensitive and sympathetic way. We will do so in a way that will protect the interest of patients.

I hope that the relationship we have built up over a short period will result in a good working relationship. What happened at the start of the meeting is unfortunate. The witnesses need to realise the role of the Committee of Public Accounts is to consider public expenditure. It is never personal and this should be borne in mind as we work.

I wish to refer to one local issue and then a national one. In Limerick city, which I represent, a story broke this morning - I was not aware of it as a public representative but should have been - that certain patients that have heart attacks are taken directly to Galway instead of Limerick regional hospital. I had contact with the HSE on this. I understand that, at this point, what is required is an inspection of Limerick regional hospital by the officials associated with the national clinical programme, the coronary syndromes programme, with a view to putting in place a CAT laboratory with a 24-hour service. Can the witnesses assure me that this inspection will take place immediately? On what date will the 24-hour cardiac service be made available in Limerick regional hospital? The situation has created fear and anxiety among the Limerick public that should not have been allowed to have been created. It is a matter of communication. I would like a categorical statement tonight that the inspection of the service will take place to ensure there are adequate facilitates and services. I would like to know the date on which the 24-hour CAT laboratory and cardiac unit will be open to the patients of Limerick.

The Deputy put the question to Mr. O'Brien. In fairness to Mr. O'Brien, that is not why he is here. Having said that, if Mr. O'Brien feels he wants to answer, that is fine. It sounds like a good topical issue for the floor of the House.

Without being glib, I contend the HSE is well aware of this matter. It will take only a minute and I expect we will get an affirmative response.

Mr. Tony O'Brien

I did have notice of the issue and am happy to deal with it. Primary PCI, the service to which the Deputy is referring, is a new development under the acute coronary syndromes programme. Four centres have already been developed. The HSE, with the Mid-Western Regional Hospital group, has invested significantly in the development of cardiology services at the Mid-Western Regional Hospital. It now has five cardiologists, which represents a significant improvement.

The decision on whether to authorise this service at that centre is primarily one of quality and safety. The clinical lead has indicated that he will carry out the inspection within the next three weeks. The outcome will determine whether we proceed to commence the service.

I welcome that. The inspection should take place immediately. I understand Limerick regional hospital is now ready for the inspection. It should not take three weeks. I have no doubt that, if that inspection takes place, the 24-hour cardiac service will be made available in Limerick. It is not good enough that patients were not aware of the matter. This problem has featured since 1 October. I ask Mr. O'Brien to expedite the inspection and have it take place immediately to give assurance to the people of Limerick.

Mr. Tony O'Brien

I reiterate that the inspection will take place within the next three weeks. Depending on the outcome of that inspection, an appropriate clinical decision will be made about the commencement of the service in Limerick. A subset of patients is now going to Galway because the service available there is what is required for them. The plan is to put in place such a service in-----

I do not want to dwell on this point. With due respect, I contend the head cardiologist in Limerick stated in public on the radio that the decision would have an impact on patient care. I do not wish to have a response from Mr. O'Brien but I ask him to have the inspection carried out immediately.

I want to move on to the general items. Without straying into policy, I will keep to the facts and figures. The over-run to the end of September was €372 million. Mr. Woods might outline the overspend per month this year. Given the projections, was there an incremental build-up? What were the figures at the end of January and February? Why has the HSE found itself needing to take drastic action three months before the year end?

How much remains unclaimed in terms of fees from private insurance companies? In this regard, there is a delay in the submission of paperwork by some consultants. It would be like a business not billing its clients. A cut of €8 million to home help hours is being announced today. It will impact on ordinary people. We must ask legitimate questions. The HSE has a job of work to do, but how has this situation evolved during the year and what is the estimate for unclaimed fees? The latter is a work in progress, as consultants have not submitted claims. It beggars belief.

Mr. Liam Woods

Hospitals comprise a significant component of the deficit and their deficits have been growing steadily through the year. Indeed, there has been a steadying off of the deficit's rate of growth in the past few months.

A "steadying off"?

Mr. Liam Woods

Yes, but not a reduction, which is what I was going to say. The medical card schemes have grown significantly since February and March. Connected with this is the growth in the number of cards issued.

I had a quick look at the three sections - care groups, hospitals and primary care reimbursement schemes. They seem to make up the bulk of the over-run. What is the composition of the care groups and the primary care reimbursement schemes? I know about the hospitals.

Mr. Liam Woods

According to the July performance report, which is before the committee, the hospitals accounted for €179 million of the deficit and primary care reimbursement services accounted for €121 million.

Do those figures factor in medical cards?

Mr. Tony O'Brien

An appendix in our report shows that there are ten schemes. Primary among them are the medical card and drug payment scheme, the hardship scheme and the high-tech medicines scheme. These account for the bulk of the money.

What about unclaimed fees?

Mr. Liam Woods

I have those data, if the committee will bear with me for one moment. Without going into detail, we are working on accelerating the collection of income. Reference was made to a target of €143 million in the service plan. We are working to achieve that. It is in this context that the issue of the amount of money outstanding in respect of the signing of claim forms arises. Recently, we put new electronic systems into five hospitals - Limerick will go live on the system tomorrow - to assist in this regard. We have a number of specific problems with some consultants in terms of the completion of forms.

I am only interested in the figure.

Mr. Liam Woods

I know and I apologise, but I am talking while I am looking. I have the files in front of me and will supply the figures if the Deputy will bear with me. I was outlining some of the background. The Deputy might be patient with me. The figure for outstanding claims awaiting consultants' signatures is €74 million.

That is in respect of unsigned claim forms. The HSE is making €58 million in front line cuts while €74 million is outstanding because consultants have not signed forms to claim money from insurance companies. Given the fact that the HSE is making cuts of €8 million to home help services, how can the HSE stand over this situation or allow it to continue? It makes no sense.

Mr. Liam Woods

For information purposes, the total amount outstanding is €219 million. We have improved on the rate of signing of forms by consultants. We are experiencing difficulties in respect of pending claims, those being claims that have been signed by consultants and are with insurers awaiting payment. We are receiving more queries on those claims, adding to the overall delay.

Does the €372 overrun to the end of September exclude the €74 million?

Mr. Liam Woods

No. I referred to a figure of €69 million for the underachievement of cash target. This primarily relates to the collection of private income.

Is the €69 million included in the €74 million?

Mr. Liam Woods

In effect, yes. If the collections were higher, the €69 million would be lower.

I assume that insurance companies have not been billed for the €74 million.

Mr. Liam Woods

They would put it as not having received valid claim forms. They seek the patients' demographics, which come from the hospital system, plus the signed forms.

Is the €372 million calculated on a cash basis or an accruals basis?

Mr. Liam Woods

Cash. It is Vote accounting, which is close to cash.

If it were to be done on an accruals basis, that is, bringing in income that was owed, what would the over-run be?

Mr. Liam Woods

The performance report for July is prepared on an accruals basis. We produce two sets of financial information. The Vote report that the Deputy is citing was prepared on a cash basis. The committee has both views.

The figure is more or less the same at approximately €350 million.

Mr. Liam Woods

The Deputy is heading towards the issue of debtor days. At the end of last year, they amounted to 140.

If the HSE submits a bill, it must wait approximately five months to be paid by an insurance company.

In layman's terms, why is €74 million outstanding and how does the HSE propose to address the issue? Given the information provided by the witnesses, the HSE would not be required to make front line cuts if the bills were paid. They stated that front line services would be cut by €58 million, non-front line services would be cut by €72 million and the remainder would be made up by generic drugs, etc. Our job is to examine the figures and question management. How in the name of God is €74 million sitting around in unsigned forms on hospital consultants' desks at a time when the HSE is announcing cuts of €8 million to home help services and a further €50 million in cuts before the end of the year?

Mr. Liam Woods

The income collection target must be achieved as part of delivering on the overall HSE Vote. The Secretary General and Mr. O'Brien stated that we were in discussions on the issue. It is correct to say that we need to recover that income as part of reaching a balanced year-end position.

I am making a simple point. If the €74 million had been billed-----

Mr. Liam Woods

We presented on this matter previously. The 2010 report to the committee contained an income Chapter, in which context the Comptroller and Auditor General made known to the committee and we responded to some concerns about the process that gave rise to so many forms being outstanding. That process is primarily driven by the requirement of insurers to have the demographic detail, which is contained in our patient administration system on the day someone leaves hospital, as well as the form signed by the consultant.

Two sets of data being required for submission of forms is the primary factor giving rise to delay. Within the consultant process there is a certain amount of administration.

What is the total budget this year? Is it €15 billion?

Mr. Liam Woods

It is €13.3 billion.

The HSE is a huge organisation and we are being told that the administrative and accounting process has led to €74 million in fees due from insurance companies being currently unbilled. How quickly will these be billed? The executive is announcing cuts of €16 million less than that figure. What will be done to expedite the collection of €74 million to allow leverage on front-line services?

Mr. Tony O'Brien

I appreciate the Deputy raising the point. By and large, the €74 million does not have a good explanation. There will always be some claims for which there may be a good reason for non-signing but €74 million is way too high. That is one of the reasons, shortly after taking up my post, together with the Secretary General, we sat down with the representatives of the consultant bodies and invited them into a Labour Relations Commission, LRC, process, one of the outcomes of which is a provision that such forms must be signed within 14 days. I also referred to our proposals, subject to final legal clearance, to publish the list of consultants who are not signing forms.

That is going forward. Tell me about this €74 million that has not yet been billed.

Mr. Tony O'Brien

That is part of it. We must get those forms signed by the consultants who provided the treatment in order to be legally entitled to bill the private health insurer.

I suggest time would be much better used if we stood over consultants and got them to sign those forms. If I ran a business where staff were not sending out invoices in order to get in fees, that business would not function. I am bringing this down to euro and cent. There is €74 million outstanding that has not even been billed and it is work in progress. Consultants have not signed these forms, which is wholly unacceptable. We are dealing with people on the ground who ask how this happens. Apart from the procedures to be put in place where signing must take place within 14 days, which I welcome, what will be done to clean up the €74 billion owed to the HSE? It has not yet even been billed to the insurance company. What procedures are in place to recover this and give me a timeframe on when this will be done? That is not straying into policy as it is purely about management and making proper use of the people's money. We are charged with overseeing that and asking these questions. Rather than giving me an overview of the process, will Mr. O'Brien tell me what will be done, and when the €74 million will reach the HSE bank account?

How old is that debt?

What is the history of the outstanding claims?

Perhaps the witnesses can tell us the oldest claim.

Mr. Liam Woods

The most aged component would be a small number of consultants with forms outstanding for up to a year.

How much of the €74 million is outstanding up to a year?

Mr. Liam Woods

I do not have the time-based split of the €74 million.

What is the rough estimate?

Mr. Liam Woods

In the cases I am thinking about, there would be in the region of €5 million to €8 million outstanding for that time.

How much would be outstanding for six months?

Mr. Liam Woods

Most of the total debt is less than six months outstanding. On average, the consultant component would be approximately three months.

There is €8 million outstanding at this stage for over a year that has not even been billed. The patients in question were seen a year ago. How much of the €74 million comes from patients who would have been seen more than six months ago?

Mr. Liam Woods

I would have to get the full split. On average, we are collecting-----

Does Mr. Woods have that split?

Mr. Liam Woods

I can get it.

Does Mr. Woods have it with him?

Mr. Liam Woods

It is not in front of me. I have the total debtor split, which is 140 days or less than half a year. On average, the consultants are signing forms between two and three months-----

Is the practice particular to certain consultants?

Mr. Liam Woods

A portion of the €74 million figure would exist anyway.

I am not denying that.

Mr. Liam Woods

In thinking of 30 day payment terms, a figure of €10 million to €15 million would be normal.

Is the witness saying that of the €74 million, at the most €15 million would be expected, so €60 million has been outstanding for a significant length of time?

Mr. Liam Woods

Yes. We pay within 30 days and if the Deputy considers that if we looked to be paid in such a period, his figures are correct.

Some 80% of the figure is hard core and is outstanding for a long period. Will Mr. O'Brien deal with the direct questions I asked? How will the money be recovered, when will it happen and when will the €74 million reach the HSE bank account?

Mr. Tony O'Brien

In my judgment and that of my colleagues, the best way to get the result we want was to approach this through the LRC process and then implement that process. We said earlier that we intend to implement the outcome of the LRC process from 5 November. The reason is that whereas the majority of consultants are not the ones we are talking about here, it has been noted in the past that sometimes actions taken designed to achieve one event can have an unintended consequence and make the cash position worse. The judgment we made, given that we had the LRC process, was that it was best for the result we wanted to include a commitment on the part of the representative bodies that their members would sign forms within 14 days.

What about the €74 million? From a cash perspective-----

Mr. Tony O'Brien

All of it would have to be encompassed within the 14 day period. In other words, the consultants would sign every outstanding form within 14 days.

That is from 5 November.

Mr. Tony O'Brien

Yes.

Is Mr. O'Brien telling me he expects the €74 million to come back within 140 days of that, that the likelihood is that it will not be paid before the end of March 2013?

Mr. Tony O'Brien

The Deputy is correctly identifying that perhaps the more significant financial impact comes from the number of days outstanding for claims that have been validly submitted, many of which are in the category of pending claims which my colleague, Mr. Woods, has identified. Once the forms are signed, we have overcome an important hurdle. The next hurdle is getting the cash.

I will make some final comments. The €74 million should be reflected in the accounts of the HSE for 2012 and not 2013. It will provide leverage and may lead to a position where we would not have to affect front-line services.

Mr. Tony O'Brien

We are required to balance our Vote, not our accruals-based accounts.

I do not want to harp on. There is €74 million in fees that have not been invoiced by consultants. The HSE is required to make €58 million in adjustments relating to front-line services. The €74 million, or at least €60 million, should be sitting in the HSE bank account. Perhaps €10 million would be outstanding in the normal way. The witnesses are telling me they do not have the facility to make adjustments for that, although it is expected that the money will be billed before the end of the year.

Mr. Tony O'Brien

We are required to operate under regulations put in place by the Houses of the Oireachtas and, as such, we operate on a cash basis. Therefore, we must produce a balanced Vote. This is different from the accruals-based system of accounting.

Accruing for billed outstanding income cannot be taken into account for the purposes of balancing the-----

It is something that needs to be examined. While I thank Mr. O'Brien for dealing with the issue in Limerick, three weeks is a wholly unacceptable length of time to wait for an inspection. I ask him to examine it again, speak to the clinical lead in that area and ensure it is speedily addressed and that the people in Limerick will have a 24 hour cath lab-cardiology service up and running like the service in Galway and have parity of esteem with immediate effect. I thank Mr. O'Brien for the good exchange. This is about taxpayers' money. I have no doubt we are both on this same side on this issue.

Mr. Liam Woods

On a point of information, we include the income in our accrual accounts.

Mr. Liam Woods

It is in included there.

The executive has to balance on a cash basis.

Mr. Liam Woods

The point that the CEO is making applies.

I welcome Mr. O'Brien and Dr. Ambrose McLoughlin to the meeting. The two representatives have a long track record of commitment to public service and I look forward to working with them.

I will confine my remarks, observations and questions to home care packages and the home help service. Do the representatives have figures available indicating the number of home help hours in the system and the number of home helps engaged or employed directly by the HSE versus the number engaged via private contractors?

Ms Laverne McGuinness

In terms of the home help service and the amount of money in the home help service budget, there is €195 million available in respect of home help. In terms of home care packages, there is in the region of €140 million available. I do not have the exact numbers - I can come back to the committee on that - because they fluctuate and change from time to time. Primarily in the Dublin, mid-Leinster and Dublin north-east region, a lot our services are provided through contracted arrangements whereas in the west and the south they are primarily provided by direct provision.

Does Ms McGuinness have an idea of the balance between public and private provision in the Dublin north-east region or the Dublin region in general?

Ms Laverne McGuinness

It is about 70% to 30%.

That is 70% in terms of private provision.

Ms Laverne McGuinness

Yes.

We have seen a huge growth in the provision of services by private care companies in recent years. The figures I have available, and Ms McGuinness can correct me if I am wrong, suggest that, for example, in 2007 expenditure from the HSE on private care contractors was approximately €2.5 million, and such expenditure has climbed to €19.14 million in 2011, the year for which figures are most recently available. In many ways this has been at the expense of the displacement of some people working in the public system. I do not expect Ms McGuinness to comment on that. It is just an observation.

Has the HSE engaged in any critical analysis of the actual cost involved in engaging private care companies as opposed to retaining the services of people in the public system? There is an implicit assumption, whether in respect of agency staff or other areas, that by outsourcing services, savings can be made. There is research that attempts to prove otherwise and there is a good deal of evidence that suggests many organisations, and analogous organisations such as the NHS in the UK, are now deciding to insource services again because they have learned lessons from the past in terms of the expenditure of public moneys on outsourcing. Has any examination been undertaken by the HSE on those sorts of costs and whether it is beneficial to the taxpayer to focus on public versus private provision or vice versa? Can Ms Laverne elaborate on that?

Ms Laverne McGuinness

There are a number of issues involved there. One is that we are being asked to reduce the numbers working in the public sector and to reduce our actual numbers. In terms of the home help service, a procurement process was undertaken of home help provision in the Dublin north-east region. The prices are very comparable when compared with the public expenditure on such provision.

Where is the saving then?

Ms Laverne McGuinness

Good value is being obtained in respect of them. We do not directly employ people in the provision of the home help service when we are contracting a particular agency in that respect. We are not, therefore, responsible for the provision of pensions, PRSI, and so forth. The agency would have to take up all the costs associated with staff absenteeism, management of pensions, management of payrolls, and so on. There have been gaps in particular areas where it was not possible to obtain direct provision if one so wished. That also has been a particular circumstance in our selection of outsourcing that arrangement.

Can Ms McGuinness describe the type of contract enjoyed by a person directly engaged by the HSE to provide the home help service? What kind of contract would that person have?

Ms Laverne McGuinness

I can provide direct detail on the particular contract. The contract they would have would vary very much on an individual basis. It would depend also on where they are situated. We have home help provision in areas that are quite remote such as on the Aran Islands. Those people's contracts might be different on an individualised basis from someone providing home help in the city. Some people have to travel some distances and in that case we would not be able to put in place an outsourced arrangement. I can provide the committee with the terms and conditions of the contract.

That would be useful. A range of organisations, including Comfort Keepers, received just over €1 million from the HSE in 2007, and that expenditure has climbed to €3.267 million, which is a significant rise. Clearly that organisation is very active in terms of the HSE contracts. Can Ms McGuinness advise how commission is calculated and what amount of commission a private care contractor would expect to receive from a HSE contract?

Ms Laverne McGuinness

I am not sure what Deputy means by "commission". There is a contract for the provision of services. There is not a commission per se. We can certainly share with him, as it is public information, some of contracts and the awards of those contracts, but they have gone through a very significant and rigorous procurement process. It would have been done through public procurement and one of the key tenets by which they are assessed is the value for money aspect of it.

I welcome the witnesses. I want to begin by directing a comment to Mr. McLoughlin regarding the comments made earlier to him by Deputy Fleming. I completely and utterly disassociate myself from them. Mr. McLoughlin is in here to do a job and to respond to questions from members and he should not be subject to that kind of language. I want to put that on record. Despite the start the meeting got off to, everyone has still had an opportunity to put questions and Mr. McLoughlin has done his best to give answers within the parameters he is operating. Perhaps the meeting could have got off to a different start given the way everyone has discussed issues with Mr. McLoughlin, but leaving that aside, the earlier comments were appalling and I want to separate myself from them completely.

I want to focus on getting a grasp on the figures at present. I will use the framework of the July 2012 performance report that Mr. McLoughlin shared with us. I want to refer to a number of the pages in turn and get a grasp on the figures at this time in early October. I want to return to a theme my colleague, Deputy O'Donnell, pursued regarding the €74 million in respect of invoices for consultants. I have a basic question on that. Have the consultants been paid that €74 million?

Mr. Tony O'Brien

No. By virtue of the fact that they have not signed the claim form, the are ineligible to receive their portion of the income that arises.

That €74 million is a-----

Mr. Tony O'Brien

A HSE-----

That is a HSE deficit but it is not money that has been paid to the consultants.

Mr. Tony O'Brien

No. It would be reasonable to expect that there is a separate set of money outstanding directly to them from the private health insurers.

Could the witness explain how that works? Why this is a separate amount of money?

Mr. Tony O'Brien

The way private health insurance works is that most private health insurers have what is known as a direct billing arrangement. A direct billing arrangement, once the forms are signed, enables the HSE or the hospital in question to claim the amount of money that is due in accordance with a predetermined tariff for the treatments provided to the privately insured person in the hospital. Separate to that, there is a scale of fees payable to the consultant, depending on his or her discipline and the nature of the treatment he or she provides, against the tariff that he or she separately claims and is paid directly by the private health insurer. In so far as the consultant has not signed the form enabling the HSE or hospital, as the case may be, to claim the fees due to the executive or hospital, he or she will not yet be in a position to claim the fees due to him or her.

I will restate that to make sure I understand it completely. Due to the fact that the consultants have not processed the paperwork, they have not been paid for this private work and neither have the hospitals.

Mr. Tony O'Brien

That is correct.

I understand. On another more basic question, why would someone decide not to sign the paperwork to get €74 million worth of income when it is not one individual? Maybe it is and Mr. O'Brien might explain that to us if it is the case. Why would people forfeit that level of income?

Mr. Liam Woods

On a point of clarification, the figure of €74 million is not due to the consultants, so there is a lesser but still significant amount that is due to the consultants. The motivation of the consultants-----

That €74 million is due to the hospitals.

Mr. Liam Woods

That amount is due to the hospitals.

Does Mr. Woods have an understanding of the figure due to the consultants - the separate figure?

Mr. Liam Woods

No.

Mr. Tony O'Brien

It is very difficult to calculate that. It depends exactly on what procedure was performed. In respect of each patient, there may be different consultants eligible to claim different amounts - an anaesthetist, pathology, the main treating consultant and so on - so it is an imponderable.

To return to my second question, what are the factors behind the non-claiming of a figure of that magnitude?

Mr. Tony O'Brien

One could only speculate. Either the individuals are not in need of the income or it suits them to defer that income for whatever reason. I am aware of a general provision in the tax code that once one is eligible to issue an invoice, one is also eligible for the tax that arises upon it, regardless of whether one has gained the income. I cannot speak to the individuals who all, no doubt, have different reasons.

To crystallise that point and I understand that Mr. O'Brien is only speculating, when an invoice is generated, that is the point at which the tax liability is caused. Is that correct?

Mr. Tony O'Brien

The invoice date is generally speaking the tax date for taxation purposes of all kinds.

I will address my broader question to Mr. Woods because he is the one with the laptop over there and is tapping away furiously at it. If for no other reason, I am drawn to him. Page five of the very helpful report furnished to us from July 2012 describes the financial metrics for different parts of the HSE as it stood at July 2011. It broke down the deficit as it stood then by different region. Does Mr. Woods have the figures as to the geographical components of the deficit that we have discussed?

Mr. Liam Woods

Yes, I do.

Could he share them with us by region - by Dublin, the midlands, the north east and south west and the two hospital groups?

Mr. Liam Woods

The Deputy is looking at the July data so the latest data we would have available to us is August data which is in draft for us. The Vote figures do not come broken down that way but our detailed expenditure does and that is the latest data we have in the format requested by the Deputy. I can call the figures out now in respect of the page five equivalent the Deputy is looking at if he would like me to do so.

I am looking at the actual year to the approved allocation and then the actual year to date and budget year to date. There is a variance year to date. Could Mr. Woods give us the variance figure?

Mr. Liam Woods

The bottom line figure the Deputy is looking at for July is €350 million or so.

Is the figure €350 million?

Mr. Liam Woods

Yes. The comparable figure for August is €404 million. The actual year to date figure is €8.516 billion and the budget year to date figure is €8.112 billion.

In this case the deficit, which stood at €351 million, has increased to €404 million?

Mr. Liam Woods

That is correct.

Does Mr. Woods have that breakdown for Dublin mid-Leinster and Dublin north-east?

Mr. Liam Woods

The figure for Dublin mid-Leinster is €70.5 million. The figure possessed by the Deputy was €66.2 million. The figure for Dublin north-east is €79.4 million, while the figure possessed by the Deputy was €73.2 million. The south is €44.7 million and the west is €17.1 million.

The figure for the south is €44.7 million.

Mr. Liam Woods

It is.

What is the figure for the west?

Mr. Liam Woods

The figure for the west is €17.1 million. The figure for the Galway hospital group is €21.2 million, while the mid-west hospital group is €22.5 million.

Out of all the regions for which Mr. Woods has given me the information, the south's deficit has decreased while those of all the other regions have increased.

Mr. Liam Woods

Yes.

The south region has had quite a significant decrease in its deficit from €53 million to €44.7 million.

Mr. Liam Woods

Yes. I should have told the Deputy that the other significant item - primary care reimbursements services - is €149.8 million.

This is the other big figure that is here.

Mr. Liam Woods

It is the single biggest growth.

I wanted to get those figures so I could understand the most up-to-date components of it. Digging behind each of those figures, page 20 of the report includes information on primary care reimbursements, which we touched upon. One of the points made in respect of the increased demand for services, and I believe Mr. O'Brien touched on this point as well, is that a big chunk of the increase in the issuing of medical cards was clearing the backlog that had built up across the second half of last year. That was cleared during the first half of this year. Given that those applications were in the system but had not been processed, should it have been assumed that this deficit was going to occur because the HSE had received all the applications and they simply had not been processed?

Mr. Liam Woods

The reason for the deficit could be multifaceted. That is one reason but there could be an increase in the number of prescriptions. The volume of prescribing can affect the deficit on schemes. It is not linked solely to the number of medical cards.

It does say that the number of items reimbursed increased by 2.4 million items across the year.

Mr. Liam Woods

That is right but that is not necessarily associated solely with the medical card issue. It could be associated with a higher volume of prescribing.

That comes to the nub of my questioning. When the HSE is getting its figures ready for the year, I suppose it knows that if it issues a certain number of new medical cards, that will generate a certain amount of expenditure. Why has there been such an increase in the number of items on existing medical cards that has consequently driven the cost the HSE is managing at the moment?

Mr. Liam Woods

The underlying factors concern the demographic around ageing. Medical card costs are much more significant in terms of people who are older, so ageing is a significant factor. This has the effect of growing the prescribing volume.

That is not an unexpected variable though. At the start of the year, the HSE knows that people will be getting older and looking for more, that some people will, unfortunately, pass away, and that new people will be coming in. It is a stable enough universe.

Mr. Liam Woods

I was not trying to identify just unexpected factors. The drivers are numbers of medical cards and the mix of medical cards by age category, gender and physical location, because there are variable rates for geographies to some extent. There are a number of drivers behind what causes the cost of schemes to grow. They are estimated at the start of the year and then the trend is observed and managed as the year progresses in terms of budgets and actuals.

I have a question relating to page 17 of the report from July 2012. It looks at the finance by different segments of expenditure and where the different deficits stand at present. Table 1 has a figure of €351 million, which has increased to the €404 million figure given earlier. The hospital services figure is in table 2. Can the witness give us an update on where that figure stands at present?

Mr. Liam Woods

Yes. It is €201 million at the end of August, compared with €179.6 million.

Is that part of the €404 million figure?

Mr. Liam Woods

It is.

Would Mr. Woods be able to fill in that chart in terms of the components and that variance?

Mr. Liam Woods

Yes. Acute hospitals is €201 million.

I mean the left side panel in table 2 on hospital services.

Mr. Liam Woods

DML is €48.7 million.

What does DML stand for?

Mr. Liam Woods

Dublin mid-Leinster. Dublin north east is €64.5 million, south is €30 million, west is €14.5 million, Galway hospital group is €21.2 million and mid-west hospital group is €22.5 million.

In all cases, therefore, the deficit has increased as it went into the extra month.

Mr. Liam Woods

Yes. I am not looking at the comparator; I just called out the actual figure.

That gives the deficit as it stood then.

Mr. Liam Woods

Yes, that is correct.

The deficit figure of €500 million, which is a huge figure we are all very concerned about and which Deputy McDonald referred to earlier, has been in the public domain for some time now. Even in the report I have here, there is reference to the fact that the HSE expected, if things went unchecked, there would be a deficit of roughly that level later in the year. Am I correct in that?

Mr. Tony O'Brien

Yes, that is correct.

When did that figure come into the public domain?

Mr. Tony O'Brien

We put that figure into the public domain on 29 or 30 August.

There has been clarity that if other things did not change and if measures were not put in place, a deficit of that level would be reached.

Mr. Tony O'Brien

Yes.

Mr. O'Brien made an interesting point in his submission earlier. He said that even if everything had gone according to plan-----

Mr. Tony O'Brien

Everything else.

-----there still would have been a deficit level to which the service would have had to respond. This is a point we touched on in our June hearings, the issue of the lack of integration still in respect of cost accounting within the HSE. Why is it that even when there was a huge amount of money in the economy there were still deficit crises occurring in our health service? What is the driver for something like this being a recurring theme every year?

Mr. Tony O'Brien

Clearly, the Deputy is inviting me to draw the lessons from that to apply them for the future.

Mr. Tony O'Brien

I made a more broader point in that regard. While there is much debate about this year's service plan and this year's projected deficit position, it forms part of a picture that goes on for a longer period of time. As the Accounting Officer and as we approach the issue of developing a proposed service plan for next year, which will be in the policy space and I will not talk in any detail about that, it is important that we look to see what specific lessons can be drawn from each of the previous years in which the service plan has not worked in the way we would have wished. I emphasised at the time that I considered the absence of enterprise-wide contemporary financial planning and accounting systems, which the HSE does not have as it is largely operating on the basis of the legacy systems it inherited, is a significant issue. The Secretary General has made reference to a couple of reviews which have been commissioned by the Department. They are currently being considered by the Minister and he has said that he intends to publish them in the very near future. They, too, will speak to this issue and one or two others. It is clear that the service planning round will need to draw on these lessons and take a very hard look at what we might do differently in terms of service planning in the future, based on this experience.

The point I was making about the PCRS impact, or the schemes which we broadly refer to as PCRS, is that even if everything else had been absolutely perfect regarding the assumptions, income collection and so forth, the HSE would still have had to find a way to deal with the fact that the level of requirement or eligibility for various schemes, in and of itself, would have knocked the overall financial position off by approximately €210 million.

On that point, is the witness saying that the combination of those two factors, the current eligibility for the different schemes that are available and the natural change in society that takes place each year, would have generated a deficit of more than €200 million?

Mr. Tony O'Brien

There are elements of what the HSE does that are not dissimilar to what other Departments, such as the Department of Social Protection, must do, that is, respond to the needs that arise as a result of the overall economic situation, the pace of progress and so forth. This is only one part of the picture. I do not put it forward as the entire picture because I have already acknowledged the financial planning and contemporary financial systems issues. Clearly, also, we have an issue to address in terms of hospitals and other areas. However, the HSE is sometimes open to criticism which is couched simply in terms of it not managing its expenditure correctly. That criticism can be made and it is part of the explanation for some of this, but the HSE does not have the capacity to manage eligibility issues relating to the schemes we refer to generically as the PCRS schemes. They are based on eligibility. The need arises, the cost is incurred and the HSE has no discretion for the vast majority of that.

That is because the eligibility criteria are set by the Oireachtas and the Department of Health.

Mr. Tony O'Brien

Yes. In the year in question there was a mismatch between the funding available and the costs arising as a result of the eligibility and the social factors that give rise to individuals becoming eligible under those schemes.

Therefore, where the eligibility criteria do not change and society goes through the normal type of change, it generates the financial pressure the witness has mentioned.

Mr. Tony O'Brien

Short of a major change in our economic circumstances, which would take a number of people out of eligibility by virtue of gaining employment or whatever, the situation is as it is.

I will conclude on one point, the consultant contract negotiations. I realise Mr. O'Brien is constrained in what he can say. However, can he tell us where they stand at present?

Mr. Tony O'Brien

The Labour Relations Commission, LRC, mediated deal was agreed and is recommended to the members of the two bodies. Those two bodies are in the consultation phase with their members. There will be a meeting with us in a couple of days, at our invitation, to discuss the implementation phase. We, the management side, which includes the Department and the HSE as employer, have indicated on the basis of the agreement reached at the LRC that we intend to proceed with implementation from the beginning of November. The day we have selected is Monday, 5 November.

Does Mr. O'Brien have a figure in mind as to what type of savings could be made in this calendar year by the implementation of the new contract?

Mr. Tony O'Brien

We have not put a specific figure on that. This is more of a long-term play.

What gain does Mr. O'Brien think could accrue in a full year?

Mr. Tony O'Brien

We value the progress made at approximately €200 million. The challenge, however, is that extracting cash as a productivity gain, particularly in the area of roster changes and so forth in which consultants will engage, is a delicate and tricky manoeuvre. Their increased availability to treat patients, if managed correctly, will result in shorter lengths of stay and an ability to reduce the number of patients who require longer stays in hospital and so forth.

Extracting that cash will work well.

On the other hand, their increased availability can sometimes lead to increases in demand for services. A particular management challenge will arise as part of the implementation of this agreement. The overwhelming reality is that the implementation of this agreement will be very good for patient care, will enable us to provide more patient care within the decreased envelope and will present a particular challenge both for our clinical directors whose role will be strengthened as a result of this agreement, and for our managers in ensuring that we extract cost at the same time as we increase efficiency. Health systems are often challenged to do that.

I will leave it at that. The Chairman said at the start of the meeting he felt it was very appropriate that the committee look at the challenges for public accounts today rather than in two years time, when the date has passed. That is an approach with which I entirely agree. Within this meeting we have shown, or most of us have shown, our ability to do that. I thank Mr. O'Brien for his participation in responding to my questions.

I will not delay the meeting. We have had a fair exchange and sharing of information. I want to clear up a number of points. Mr. Woods referred to the legacy issues, the health boards, the 50 agencies and so on. The HSE was established in 2005 and in all of those years, the legacy issues were not dealt with; proper computerised systems were not installed to read the delivery of services and the costs and so on. Why was that?

Mr. Liam Woods

There was a chapter on ICT in the 2010 report which commented on the financial systems and, to some extent, the trail, the business case proposals that were in place. In effect we have had some system development to try to deal with aggregated data more effectively to produce information both for public transparency and for the board of the HSE. The core system that would be required to run the HSE effectively is still not in place.

How much would it cost to put this in place?

Mr. Liam Woods

It would depend on the approach taken. The figures would be commercially sensitive. It would be potentially unwise to state them publicly.

I accept that. The HSE had significant budgets over those years. At the last meeting, the then chief executive officer, Mr. Magee, admitted that the systems were not fit for purpose. Acknowledging that in 2012, not having done anything about it from the establishment of the HSE in 2005, in spite of the report to which Mr. Woods referred, would seem to me to be a complete breakdown of management. Management, and its reports, cannot function properly without gathering information by technology. That is essentially the world we live in. The HSE has failed miserably over these years to put in place a system that actually works. From what we heard today, what was actually done about the €74 million that was outstanding? Were debt collectors sent out to bring in that €74 million as the HSE did when dealing with citizens who attended accident and emergency departments and did not pay? Was the same effort made to put that in place to collect the €74 million? Deputy O'Donnell suggested that we did not just arrive at this point, the practice has grown up over the years. It would seem once again that within an agency of the State, nobody cried "Stop".

Mr. Liam Woods

On the systems point related to income, there is a system in five hospitals and it will be going into another five by the end of the year and it will be rolled out across the remaining large hospitals during the first quarter.

The HSE has been in place since 2005.

Mr. Liam Woods

I am responding to the Chairman's question on what is happening. There is a system being installed which offers the prospect of improvement in the overall process. That is under way. There have been active processes and there is one other under way at present both to support and pursue the signing of claim forms within each of the hospitals. The comments made by the chief executive officer about the Labour Relations Commission's recommendations are very important in the context of getting timely signing of those forms.

Would Dr. McLoughlin from the Department of Health and Mr. O'Brien from the HSE accept that something was at fault since 2005, which did not draw all these legacy issues together in terms of technology and reporting, and that is the reason we find ourselves in this situation today? There were also 50 agencies involved. It think it was at the last meeting with the HSE that we found there was no clear oversight of their spending under section 39 and that a process of audit and a system of oversight would be put in place for them. The committee has had no clear indication that the Department or the HSE has a handle on that?

Dr. Ambrose McLoughlin

I will deal with this matter as Secretary General. I am aware that the Minister for Health, Deputy Reilly, was very concerned about these matters when he took office and efforts were made in the autumn of 2011 to deal with some of these issues. When I was appointed Secretary General of the Department, I ordered a major review of financial management systems in the HSE. Those reports are currently being finalised and action is currently being taken.

I want to make it absolutely clear that I discussed these matters with the Minister and they have been discussed with our colleagues in other Departments. It is true to say there have been systems failures and there are issues that need to be addressed, including improving financial performance and ensuring we have financial accountability arrangements that are adequate. The Minister has already indicated that he is putting in place a financial improvement plan which will involve the enhancement of the capability of the HSE to deal with these issues both within each of the regions and with the PCRS.

One of the challenges is that we are planning to take the Vote back into the Department in January 2014. I assure the committee of the very best efforts of the Department working with the chief executive and the HSE to deal with some of these issues very quickly. In general terms, I can assure members we are dealing with these issues right now and we are planning a different approach to the service planning agenda in 2013 to 2015, inclusive.

We need to have regard to the fact that significant reforms are required in the HSE. The governance Bill is before the Houses of the Oireachtas. The Minister and the Department were very keen that the Bill would be advanced as quickly as possible so that we can have a much more structured, effective governance system within the health service and within the HSE for as long as it is there.

We welcome the opportunity to discuss the strategic issues with the committee and we will be very happy in due course to revert to the committee and give it a full account of the processes in place when the necessary policy decisions have been taken.

The experience has been a positive.

Dr. Ambrose McLoughlin

I have 25 to 30 years experience in the public sector. While I want to thank most of the members of the committee for their engagement. I can understand that, on reflection, Deputy Fleming may want to contact me personally, and I would expect that he will. I want to make it clear that as Secretary General, I too am constrained in the same way as members of this committee are constrained. There are processes. I very much welcome the opportunity for structured and disciplined dialogue so that we can get to the core of the issues.

That is what I offer here every Thursday. The Secretary General is welcome to come before us any Thursday.

Dr. Ambrose McLoughlin

In deference to the other committees, we must appear before other committees. Everyone is interested in health. We want to have a professional, active relationship with the Houses of the Oireachtas. Mr. O'Brien and I are endeavouring to be as helpful and as constructive as possible within the parameters, which have implications for other Departments.

Deputy O'Donnell referred to the figure of €74 million. Are there other outstanding debt figures for the HSE?

Mr. Liam Woods

The private income figure, as I mentioned earlier, was €219 million up to end August.

Perhaps the witnesses would comment on the issue of absenteeism.

Dr. Ambrose McLoughlin

I can assure the committee this is a priority issue for the Minister and the Department. We have published details in respect of absenteeism in the Department, which is currently 2.8%, on our website. Mr. O'Brien, as chairman of the HSE, myself, as Secretary General of the Department, and the Minister have insisted on publication of full details of all absenteeism across the health system. In truth, absenteeism in the health system is neither affordable nor sustainable. The Minister is on public record in this regard. We need all staff of the HSE to have regard to the fact that this is an extremely difficult time. Without going into specifics, "Olympic absenteeism" - a phrase I coined - was 11% in the context of one hospital. I am aware of other services in respect of which absenteeism has reached 9%. These levels are totally unacceptable. We are targeting a 3.5% figure across the system. We want to work closely with the staff associations in tackling this issue, which will be a serious challenge.

I note that our colleagues in the Department of Public Expenditure and Reform have negotiated a significant arrangement under the Labour Court which will help in terms of sick leave entitlements, which have literally been halved.

What was the cost of absenteeism last year and what is the cost to date this year?

Mr. Liam Woods

The cost of replacement of staff absent last year is estimated to be €11.4 million.

Mr. Liam Woods

Yes.

Is that a consistent figure over the past number of years?

Mr. Liam Woods

The figure was derived based on absenteeism for the past number of years but the pattern of absenteeism has not changed much.

The cost is between €11 million and €12 million per year.

Mr. Liam Woods

That is the estimated cost in respect of replacement staff.

What were the other costs?

Mr. Liam Woods

On the other cost about which the Chairman may be speaking, I would have to work out the whole-time equivalent of absence multiplied by the pay cost. I will work it out and forward the information to the committee.

In terms of staffing levels, we have heard reports about significant numbers of middle to senior management staff. Are the witnesses happy that these are all required and that their skills are being utilised in the appropriate place?

Mr. Tony O'Brien

On that point, I will be seeking to satisfy myself that the distribution of personnel throughout the service is correct and that we are using all of our talent in the most appropriate and effective manner. On the absenteeism issue, from next year we will be only funding replacement of staff at the acceptable level of absenteeism, in respect of which our national target as provided for in this year's service plan is 3.5%. We have yet to have a discussion on what it will be next year. Some locations are achieving this and others are significantly at variance with it. We published the first full month's data in respect of July, which the committee has before it. We will be moving to publishing on a quarterly basis, which is the more commonly accepted way of publishing absenteeism data. We are putting a sharp focus on this issue.

On the earlier question about financial systems, at the end of the week of my appointment I received two sets of correspondence, the first of which was from the Department of Public Expenditure and Reform in relation to my formal appointment as Accounting Officer, including the various enclosures one receives reminding one of one's obligations. The second was a draft copy of the Ogden review from the Department. The two do not make good companions as reading sets. Following publication of the review we will be able to talk about what we have done already to bring about improvements. As any Accounting Officer would wish, many of the legacy system systems have been resolved at this point. I am committed to working as hard as I can to ensure the remaining issues are resolved. I mentioned the issue of contemporary enterprise-wide solutions a number of times in my evidence today, which is an indication of the priority I attach to them as a means of bringing financial control to the health service.

On rest days, according to a report €2.6 million to €3.4 million was paid in 2011.

Mr. Tony O'Brien

Is the Chairman referring to historical rest days?

Mr. Tony O'Brien

That matter is currently the subject of an agreed reference between the employers and the representatives bodies to the Labour Court. I hope the Chairman can accept that I feel it wise not to pursue that issue today.

That is fine. I have two final questions. GPs were overpaid by €3 million, based on medical cards, between 2002-2007. Has this money being recouped?

Ms Laverne McGuinness

That issue arose during our last meeting with the committee, at which time we outlined that there were two issues in hand, the first being that we had overpaid GPs in respect of patients who had died and the second being non-payment of GPs who attended to new born babies who had not been registered. We undertook at that time to revisit the issue on an individual GP basis, looking back over the years to see what was outstanding in respect of both areas. This work has been completed. There will be no netting off because obviously the same GP may not be involved in both cases. It is intended that this matter will be rectified on 14 November 2012. As such, the recoupment will be made at that time. Discussions will also be held with the IMO.

Is that an agreed date?

Ms Laverne McGuinness

It is the date set. We have just completed the full exercise of the matter. It is important to point out that with effect from July 2011, the time of centralisation of medical cards, there is an automatic withdrawal from GPs of medical cards for persons who are deceased based on an arrangement we have in place with the Central Publications Office and Registrar of Births and Deaths. It is the historical issue that we are addressing.

The HSE includes a parliamentary affairs division.

Mr. Tony O'Brien

Yes.

Has the HSE costed that service or examined it in terms of its efficiency in the context of replies issued?

Mr. Tony O'Brien

I have not yet done that. I have arranged a series of meetings with chairpersons of committees, including one with Deputy McGuinness later this week. One of the objectives of this is to obtain feedback from senior parliamentarians in terms of their perception of the added value of that service and to take this into account in our discussions of how we might improve the service. I am conscious, having previously represented the departmental side, that there may be issues arising as parliamentary questions which could have been dealt with more expeditiously by way of direct contact. I am also aware, from my own engagement with the Joint Committee on Health and Children, of the general sense that at times the responsiveness is not what it could be. That is the reason I am undertaking the one-to-one meetings mentioned, following which I will engage with the staff involved.

Perhaps Mr. O'Brien would determine the cost of that service.

Mr. Tony O'Brien

Yes. I am sure it is known within the service.

I thank Dr. McLoughlin and Mr. O'Brien for attending.

We will use the content of today's meeting to revise the draft report referred to earlier. Before adjourning, I thank the witnesses for attending and for the information they provided. With reference to Deputy Fleming, I intend to meet with the Deputy to discuss today's meeting, as I am sure members would want. The matter will be discussed directly with Dr. McLoughlin in due course. Our intention is to have a sound working relationship with the Department and HSE, one which does not require the taking of prisoners on any side but which demands a degree of courtesy in terms of exchanges. I hope that on reflection the witnesses will find this meeting was productive and that had it taken a different course from the start we might not have had the exchanges we had.

Perhaps we should all go away and reflect as part of the homework.

Dr. Ambrose McLoughlin

I want to respond positively to that.

I am sure.

Dr. Ambrose McLoughlin

In due course these issues must also arise after the Comptroller and Auditor General has reported on them. We are not through 2012. We are all here to serve patients and the public and I want to assure the public we are doing the best we can within the system, both in the HSE and the Department of Health, to work together in the best interests of patients and we know the committee is doing the same.

I did not ask the representative from the Department of Public Enterprise and Reform for any comments but we have not forgotten him if he wishes to say anything.

Mr. Tom Heffernan

I am happy to leave matters lie as they are at this point.

That is the wisest comment made all night.

I thank the witnesses.

The witnesses withdrew.
The committee adjourned at 8.25 p.m. until 10 a.m. on Thursday, 11 October 2012.