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Dáil Éireann debate -
Tuesday, 19 May 1987

Vol. 372 No. 10

Private Members' Business. - Health Services Expenditure: Motion.

I move:

"That Dáil Éireann wishing to remain within the 1987 Revised Estimates for Health,

(i) notes that there is widespread public concern about the provision of health services throughout the country, notwithstanding an increase this year of £13.082 million;

(ii) condemns the failure of the Government and the Minister for Health to set guidelines for expenditure on health this year that would ensure an acceptable level of service, which failure has resulted in threats of closure of numerous hospitals, and curtailment of services in others causing inevitable deep public concern;

(iii) calls for a reduction in the size and cost of the bureaucratic machine administering the health services, including the health boards; the abolition of local Health Advisory Committees; greater accountability by consultants, and a retention of such numbers of persons supplying health care direct to the public as are necessary to provide a reasonable level of service, given the country's financial circumstances."

In the past couple of weeks the panic and terror engendered in countless homes around the country by the health cuts controversy has been scandalous and disgraceful. People waiting to enter hospital for treatment are fearful that they may not now be able to do so. People going around perfectly healthy are now terrified at the prospect of they or any member of their family falling ill. It is wrong that this should happen in Ireland in 1987. It is even worse when it is realised that there is no need for such panic to be generated in the first place.

The reasons for the present mêlée of conflicting claim and counter-claim from the Minister for Health, health board executives, doctors, nurses and trade unions in the health sector must rest squarely with the present Government. It stems directly from the absence of any coherent, thought-out policy on health. It is appalling that, in one of the most fundamental areas of public policy, the new Fianna Fáil Government have no policy. When they have begun to apply very necessary constraints on the overall health budget all hell breaks loose. Every vested interest group in the health care industry rush to defend their special interest. It should be remembered that this is now a major industry employing well over 60,000 people. Unfortunately, in the ensuing controversy, the real losers are the ordinary Irish people who are bamboozled by claim and counter-claim. Daily the latest headlines scream about more ward closures, more doctors and nurses being let go, vital services — be they sexual assault units, bone marrow transplant or heart surgery programmes — being terminated or disrupted. We have also witnessed claims by some health professionals that people, including children, will die as a direct result of the current cutbacks.

All of this stems from the absence of a coherent policy on the part of the present Government. All last week in this House the Government refused to allow a debate, demanded by the Progressive Democrats and other parties, which could coldly, rationally and unemotionally examine the facts of the situation. That too was a major failure on the part of the Government. That is why the Progressive Democrats decided to table this motion on the health cuts this week. We are glad to give Dáil Éireann and the Irish public an opportunity to have the issue debated, to force the Government to stop hiding behind procedures and bland claims, to force them to face up to their responsibility to govern in this essential area — the delivery of health care for our people.

Over the past two weeks I and other members of my party have identified and highlighted the core problem of the present controversy. It has been taken up by other parties since. It is stated simply in our motion before the House this evening, that is, our call on the Minister for Health to set guidelines for expenditure on health this year that would ensure an acceptable level of service.

In a statement I issued last week I called on the Government to agree and publish national programmes for different categories of health care, such as open heart surgery, hip replacement, kidney dialysis and transplant, care of the elderly, psychiatric care and so on, and to allocate a budget to them. That would take such priority health care programmes out of the realm of being a political football and reduce the anxiety of people in those categories.

These proposals demonstrate the absence of proper control over the health budget, vital to the public, as taxpayers, on the one hand and, on the other, as users of the health services. We might consider for a moment the crazy way health care is funded. Practically all of the enormous budget, totalling approximately £1.3 billion this year, is provided by way of central Government grant to the eight health boards, voluntary hospitals and other agencies. Yet the Government, the guardian of the public purse, retain little or no say on how that money is spent. In theory the Department of Health are the watchdog. As I and my colleagues will demonstrate in the course of this debate, not only does that watchdog not bark but he is hardly ever at his post.

Let me remind the House and the public that the Progressive Democrats are fundamentally committed to getting public spending under control. How can a Government get such spending under control if they dole it out — as in the case of the health services in the amount of £1.3 billion — and retain little or no control over how that money is spent?

One has only to observe the explosion in the health budget since the inception of the health boards in the early serventies and the advent of an unfortuante era here in which the fellow who pays the piper no longer call the tune. Since the mid-seventies, health spending here has grown tenfold and has more than doubled in real terms. Staff totals in the health boards have grown from less than 24,000 in 1971 to 57,000 today. Are we really that much healthier today as a result of this explosion of health spending? I do not believe we are.

Along the way, the massive bureaucracy of the health boards has grown up. Now vested interest groups exist who feel threatended by any change. We must cry stop to this. We must restore Government control of the health services in pursuit of the very logical maxim that if the Exchequer — on behalf of the taxpayer — pays the health care piper, then he has a right to, and must, call the tune. In this regard, I want the Minister for Health to spell out the Government's position on this matter which is compounding the present difficulties.

Tough decisions have now to be taken, but the Government and the Minister for Health cannot have it both ways. To avoid being seen to take the tough decisions, they like to point to the autonomy of the health boards' elected membership and executive and maintain that any cutbacks are their fault. But, when the health board executives do propose various cuts which are endorsed by the elected members, the Minister and the Government chastise them for so doing.

The Minister and his colleagues cannot have it both ways. The only logical stance to take now is to set proper guidelines for the delivery of health care, take direct, central control of the system and responsibility for any cutbacks or programme adjustments that must be made.

Such a policy would enable clear national programmes to be decided. It would also facilitate a programme to reduce the bureaucracy spawned by the health boards at both administrative and representative level. It would also ensure that the various vested interest groups in the health services are prevented from persisting in the scare tactics of the past couple of weeks. The plain fact of the matter is that the scale of panic and threatened cutbacks now being highlighted is out of all proportion to the adjustment in the health budget. But the Government are failing to govern. The vacuum resulting from their cowardice is being filled by the self-interest chorus of every group in this sector.

I and my party colleagues now intend to go on to demonstrate the shambles the health system has become in this country. It largely stems from the unplanned and uncontrolled system that grew up over the past 15 years. If the present Minister and his Government do not know what needs to be done, then let the Progressive Democrats tell them.

Most people in this House will be familiar with the necessity to develop proper community care and preventive health services that will keep people from becoming ill in the first place, and which will keep them out of the costly acute hospital system. But that has become a cliché because the status quo represented by the health boards, the massive hospitals network and the attendant workforce of professionals, general workers and administrative staff continue to monopolise the health budget.

Last year, only £300 million of the £1,300 million health budget went into what could be termed community services, while the general hospital services got £715 million of the budget. The bulk of that money went to health boards and voluntary hospitals and none of these is seriously accountable to the Exchequer or the Department of Health in any meaningful way. In particular the £250 million or so given out to the voluntary hospitals represents an extraordinary lack of public accountability for such a vast sum of taxpayers' money. It is a situation that must not continue.

This situation is reflected throughout the entire system. From the hospital capital programme to the implementation of computerisation in the health service, to the performance of the different working groups, most notably hospital consultants, the record is one of lack of control, mismanaged funds and inadequate accountability.

Let me illustrate further. The Department of Health have already spent over £10 million on a computerisation programme for the health services that should ultimately embrace the health boards and the hospitals. One needs little imagination to appreciate the efficiencies and savings a co-ordinated national computer programme could bring to the health service, covering all aspects of administration and doing away with many routine administrative chores at local office level. Most information would be available at the press of a button on a computer VDU. It would also be invaluable in keeping records of payments for services and would be a major check on bad debts arising.

What is the reality? There has been no cost-benefit analysis by the Department of Health on their computerisation programme. Various hospitals and health boards are at different stages of computerisation; there is no co-ordination and different agencies have adopted different computer systems. The whole thing is a shambles.

This is a programme that has been going on now since the beginning of the eighties. There is no overall strategy. This is one issue which I want the Minister for Health to explain to the Dáil and to the Irish people. It is a disgrace what has been happening to date here. When we see health board and hospital administrators concentrating solely in recent weeks on the necessity for ward closures and the curtailment of vital medical services, and no reference is made to the cost of the shambles of a computerisation programme, then we are left wondering what games are being played.

Let us move to a more basic issue, the question of catering and administration in our hospitals, many of them individually large institutions with a thousand or more people to be fed and looked after every day. You would imagine that one of the benefits that would have flowed from the elaborate administrative structure of the eight health boards and the Department of Health in the role of grand conductor, would be ensuring the best value for money when it comes to hospitals buying provisions, running their various departments and adopting the most cost-efficient in-house systems.

The reality is sadly different. Major hospitals would be major purchasers of food and other supplies. But do they operate the most efficient house-keeping systems, bearing in mind that in 1984, for instance, expenditure in the health services on food, laundry, furniture, bedding, clothing, etc. was over £55 million? Two years ago the then Dáil Committee on Public Expenditure retained the Trident Management Consultants to examine these areas in the management of the health services. They unveiled a haphazard and uneven policy of tendering for supplies of food, differing criteria for accepting tenders and the evidence is of varying prices for basis supplies as between hospitals.

Methods of preparing and distributing meals in hospitals — a major administrative task, as can be imagined — vary from the most cost-efficient downwards. According to the Trident report, ten hospitals had at the time adopted the most efficient food preparation system, but there was one notable feature. In the case of those ten hospitals, the consequential staff rota changes and the savings in weekend work and overtime, to justify the investment in the new system, were not made. Another equally disturbing, if not more disturbing, finding by the consultants was that for one large general hospital they visited, they found absenteeism among one section of the non-medical staff nearly 25 per cent and to be a major problem, according to the management.

In this short debate I do not have time — I intend to give part of my time to my colleague, Deputy Quill — to detail all the areas where savings can be effected without affecting the level of services. A further example of waste is the decision by the Department to delist several cheap drugs from the GMS resulting in doctors writing very expensive alternatives. The classic example here is Zantac and Tagamet costing the GMS over £5 million annually. Some patients need these drugs, which save very expensive surgery, but in many cases a simple inexpensive antacid would be quite adequate.

I hope now we are beginning to see a more comprehensive picture of areas needing tackling in the present budget adjustment climate. What is the Minister's response to these realities, I wonder? Moreover, I believe that these facts serve to highlight the extent to which the axe is currently being wielded in a selective way by the health board and hospital administrators to pressurise the Government of the day to cave in and give more money. But I also return to my fundamental point. If the Minister gives them carte blanche with the taxpayers' millions, can the same Minister really cry foul when they behave in this arbitrary manner?

The problems with the health system and the need for accountability and proper management do not end there. If ever one needed a single example of what is wrong with the Irish health service, one need not look beyond the role and position of the thousand or so hospital consultants. Now everybody realises the vital importance of such key health experts, and their life and death role in the system. But the question that must be asked is whether this country can go on affording the kind of conditions enjoyed by the consultant in the public health system.

The so-called common contract for the consultants, now operating since 1981, affords the specialists working conditions which are surely the envy of any other group in this country. Their contract with the voluntary hospital or health board is permanent and pensionable; with a working week of 27 or 33 hours, six weeks holidays, sick leave, special leave, sabbatical leave, rest days, travel and subsistence allowance and all telephone costs.

That is only the half of it. The contract also specifically allows consultants unrestricted leave to pursue parallel private practice inside and outside the hospital for which they are contracted to provide public medical care on behalf of the State. Their contract specifically states that there will not be any exact measurement of the time a consultant gives his public patients. He may do the 33 hours per week or more, or maybe just 13.

Nor does the contract specify the responsibility of the consultant, or set down his role as a key person in the delivery of health services. Two years ago, the average consultant's salary under the common contract for public patients was £32,000. It is a rate of pay that compares very favourably with the pay for consultants in Britain. The problems that flow from this set-up are unlimited. There is the obvious potential conflict of interest between the consultant's public and private practice. Are public patients with VHI cover encouraged to "go private"? Are public facilities paid for by the taxpayer unfairly used by consultants in their private practice?

Let me make it clear that the Progressive Democrats are fully in favour of private medicine, and as many people as possible providing for their own health care. But we also are committed to a comprehensive system of health care for those who cannot afford private care and we are concerned in the interests of all taxpayers that the latter service is delivered as efficiently as possible and is not being ripped off by any sector of workers in the service, be they porters, administrators, consultants or indeed politicians as members of health boards and local health committees — and that is something my colleague, Deputy Máirín Quill, will take up later.

In Britain, hospital consultants are restricted to earning no more than 10 per cent of their public salary in private practice. Here the correlation is more likely that consultants are doubling their public salary, at least.

It is also worth pointing out that the contract was supposed to be reviewed after five years, but my understanding is that this has not yet taken place. I want the Minister for Health to tell the Progressive Democrats and the Irish people what is the up-to-date position here. Is it true, for instance, that the consultants, through the Irish Medical Organisation, are refusing to participate in this review?

All in all, it adds another dimension to the sorry story of a health service out of control, and being exploited for the benefit of the employees of the system, rather than being organised and guided to provide the best service to the general public.

In conclusion I want to say that making our health services more cost-efficient is going to be a tough job. It is a job for the Minister for Health, and he cannot hide behind health boards, chief executive officers or local politicians. There is an urgent need now for the Minister to spell out his party's policy; to set guidelines to ensure the maintenance of satisfactory level of services and to remove the doubt and confusion that has caused such alarm and upset so many people.

The Progressive Democrats have out lined in this debate some areas of our health service where major cost savings could be effected without withdrawing essential services as is now happening. The Minister is abrogating his responsibilities and should resign if he is not prepared to spell out in detail how the finances available to him are to be allocated within the service.

As of now, he stands condemned of withdrawing essential services from severely handicapped children and extremely ill people and there are many elderly people gravely upset and feeling very insecure because of what is happening. The Fianna Fáil Party are in a sorry state when they have no health policy. The false election document has happily been torn up but the Minister, Deputy O'Hanlon, must get a grip on the situation quickly. There is plenty of goodwill and willingness to co-operate if the right approach is adopted.

Take the case of Monkstown Hospital, a private voluntary hospital in Dublin. Their 1987 allocation is a cut of 22 per cent on the previous year. Despite numerous requests, the Minister, Deputy O'Hanlon, has not been able to tell them if he plans to close it or what future he sees for it. To the great credit of the staff of the hospital, I understand they have decided to take a cut in salary of 15 per cent from the highest paid to the lowest paid in order to maintain the level of service until the Minister tells them what the future of their hospital is to be.

Such sacrifices should not have to be made but hopefully such steps, including this debate, will force the Minister to take control in planning the future health services for this country.

Deputy Molloy had 40 minutes to make his opening statement and he wishes to share that time with Deputy Quill. Is that agreed? Agreed.

It is a measure of how seriously the Progressive Democrats view the present state of the health services in Ireland that we have sought to have the matter discussed, logically and constructively, in our Private Members' time, here, where decisions ought to be made, on the floor of Dáil Éireann. We hope that by the end of this debate some degree of common sense and compassion will be brought to bear on the matter and that necessary changes will result. It certainly is our aim to be as constructive and as positive as possible.

At the outset, may I say we fully support the Minister in his bid to hold this year's health bill at £1.3 billion. That is a generous allocation by the standards of any other developed country and ought to be enough to enable us to provide an excellent comprehensive health service for all our people. Why, then, with a budget of that size, has a position arisen where so many people genuinely in need of medical care are now being excluded from the system? The examples of this are legion, and cover every constituency but I will give a few examples from my constituency.

I will begin with the North Infirmary, a small economical hospital with excellent medical care, and the only general hospital on the north side of Cork city serving a population of 65,000 people. This hospital is being asked to take cutbacks of 20 per cent in this financial year, a cutback in a budget which is already pared to the bone, and any further cutbacks would inevitably lead to the closure of this hospital leaving 65,000 people without a general hospital of any kind. Moreover, the cost of keeping a patient in this hospital is only 60 per cent of the cost of keeping the equivalent patient in any other hospital in Cork city. Where is the saving in this transaction?

A further grotesque example is the closing of the children's psychiatric unit at Sarsfield Court. This is the only residential psychiatric unit for emotionally disturbed and sexually abused children in the whole region of the Southern Health Board. If this unit is closed — and the date of its closure is given as Friday next — then the long-term implications for the health service could be very costly in financial terms and could be horrendous in human terms. We had the example last week where sick children were wheeled out of a children's ward in Bantry hospital. Is that what our health service has come to? I could go on and on but I will not give further examples.

The question must be asked: what has gone wrong? Who determined our health priorities? Where is scarce taxpayers' money being spent? If we aim to make cuts, and we must, surely the knife should first fall on the top-heavy bureaucracy? One thing is absolutely certain, and it is this, the administration side of our health costs has gone out of all proportion. We must now seriously ask and answer the question: for how long more can we afford to sustain eight regional health boards and a generously endowed Department of Health?

Certainly, the issue of tackling the number of health boards is very complex, but there is little doubt that if one health board, the Eastern, can cater for one-third of the country's population, then logically it must be argued the remainder of the country could be covered by another two. In an era of computerisation, it must surely be possible to administer the health services with fewer than eight major administrative structures around the country. On the figures I have given I believe the ideal figure might be three. Indeed, we must examine the fundamental question of whether we need any health boards at all, especially when all the money for the health services is provided centrally.

I believe that at present we have the worst of all worlds — a massive bureaucratic structure represented by the eight health boards spending hundreds of millions of taxpayers' money without having to provide any real accountability for their actions. In my view that is the key to the explosion in health spending over the past decade.

The wasteful practices within the administration of the health boards has been well documented in recent days, and nowhere better than in some of our Sunday newspapers. Three weeks ago I asked the Minister if he would issue a directive to health boards to cut down on costly travelling expenses, and pointed out the need to abolish advisory committees as an initial step to reducing wasteful expenditure I gave him the figure for my own health board area, but nothing has happened since.

After 17 years of health boards, surely it is time to radically overhaul the whole structure, to cut it down to size, or to cut it out altogether. I will give but one salient figure — and it is a fact: a health board official gets more per mile in travelling expenses than a home help gets per hour for minding an elderly person and keeping that person out of hospital. So much for the concept of community care.

In this respect, while all other countries are developing their services in the direction of community care, we have made little, if any, progress in that direction. At present, less than 25 per cent of all health board spending in the Southern Health Board goes on community care, whereas half goes on general hospitals and one-fifth on special hospitals. This is not a ratio one would find in any other developed country. The Southern Health Board intend to cut £1.5 million from their community care budget this year. That will be a very backward step.

Additionally, the absence of any real budgeting for preventative medicine indicates that there is no long term strategy which is proved by the meagre service provided to children at school by way of medical or dental care. If we were serious about preventative medicine, we would be putting additional resources into it. That is how to cut down on our health bill if that is our aim. However, I see no evidence of that in this year's budget. This leads one to conclude that health policy is not being made in any degree by the elected members of health boards who are essentially close to the people and ought to know their needs.

Fundamental decisions are made by powerful vested interests within the health service and the challenge for the Minister now is to tackle these interests. There is scope in the Department of Health for a number of economies especially in relation to the engineering and architectural divisions. Do the Department need such a large — or indeed any — architectural and engineering staff, given that when there is work to be done by way of construction of a new hospital or extending an existing one, consultants in these areas are inevitably appointed as well? In practice, the health boards and a large number of voluntary hospitals have their own engineers on the staff and very often when a project is undertaken, not alone is there wasteful duplication of work, but also there is triplication. This is a scandalous waste of taxpayers' money and must be tackled as a matter of urgency.

There is scope within the administrative section for substantial economies and we are asking the Minister in the short term to take the situation in hand. The first and major cuts should be in the area of administration and not at the point where sick people need the service. He should also, as a matter of urgency, undertake a radical overhaul of the administration of the health service.

The Progressive Democrats wish to show a responsible attitude on behalf of all the people. The problems in the health services have been brought about by the callous and uncaring attitude of the Minister for Health and his Department. The Minister should put forward a cohesive plan for health as it would be of great help to the medical profession, the hospitals and the people. We urge the Minister and the Department to clarify the situation so that people's fears may be put to rest once and for all. There should be a plan which envisages how many acute and surgical beds are needed. How many geriatric and paediatric beds are needed? Is there any co-ordination in these areas? The Department are drawing lines across figures but there is no semblance of a plan for what is needed in the area of public health care.

My two colleagues have already highlighted many of the areas which are being questioned. No answers have yet been given in regard to the administrative cost of the health services. Figures have doubled over the past couple of years as staffing has grown from 40,000 to 60,000 people, most of whom are employed in the area of administration. Are all these people providing the direct and necessary health care needed? That is not the case. The people are being asked to bear the brunt of the Minister's uncaring and ill thought out cuts. The Minister is hiding behind the actions which he is allowing the health boards to take. That cannot continue. It is wrong that people should be made to suffer because of a lack of commitment and a formulated plan from the Minister and the Government.

Members spoke earlier on about wastage, expecially in relation to the health services. Care is not taken to ensure that services are maintained in a cost efficient manner. The Minister told us last week that he was asking hospitals to put forward plans for health services. It was an admission that he was incapable of formulating plans and that he realised wrong decisions had been taken. In the County and City Infirmary, Waterford, the budget has been cut by 24 per cent although it provides most of the hospital services in that area. I have made these points to the Minister already regarding this hospital and I do not want to reiterate them. Hospitals are being closed down without any regard as to where the patients are to go. The medical staff and even those within the health boards are unsure of the outcome. Is this the way to run a health service? Is this the caring attitude of the Fianna Fáil Party?

We know that proper rationalisation is needed in the health services. However, the Minister and the Government missed a golden opportunity over the past few weeks to put forward a cohesive and properly thought out plan. Instead, they have hidden behind ill thought out figures and have cut costs in an ad hoc manner. They have driven people in many areas to the depths of despair in regard to what will happen. This would have been totally unnecessary if the Minister had told the health boards and the people the facts about the health services and if he had introduced a proper plan which could be adhered to. We implore the Minister to take due regard of this motion and to clarify all the issues concerned, not just for our sake but for those who look to us to be responsible in the area of health care. They are waiting for an answer.

I was very encouraged from reading the motion of the Progressive Democrats and the amendment of Fine Gael to see they are concerned that we live within the alloction for 1987. Unfortunately during the last 40 minutes the Progressive Democrats have added about £50 million to the allocation for this year for various agencies and hospitals.

Clarification, Minister.

I listened attentively to them. The allocations they want for the number of institutions they mentioned would cost about £50 million.

Name them.

You heard them.


The Minister without interruption.

It is right that I remind the House and the country generally of what exactly has happened in regard to the health services. I am only two months in office and I am the third Minister for Health to hold that office this year. Up to 20 January last Deputy Barry Desmond was Minister for Health. He resigned because he could not contemplate staying in office with his Fine Gael partners because of the measures proposed by that party; in particular, he could not tolerate the prescription charges at £1 per item prescribed for those people who are deemed eligible to hold a medical card and who by that definition are the very poorest in our community. The prescription charges proposed by Fine Gael would impose untold hardships on the least well off in our society. I imagine, too, he found it difficult to accept the proposal to remove the right of doctors to dispense drugs to their patients who lived at a distance from pharmacies and, he could not accept that the allocation for the general medical services scheme could be underprovided to the extent of £25 million could be raised from prescription drugs in the remainder of this year, 1987. Deputy Desmond knew, and I have no doubt that the Fine Gael Government knew, that the Health Act would have to be amended. That that would take time and that it would not be possible to raise the £16 million as suggested in the Estimate of 20 January.

Deputy John Boland, as Minister for Health imposed the ban on dispensing in remote rural areas but significantly, although his one-party Government were pursuing a pathway of financial rectitude, did not issue the letters of allocation to the health agencies. It is reasonable to ask why health boards were not notified of their allocation by the Fine Gael Government after they produced their book of estimates. We came to Government in the middle of March and the budget was presented to the House on 31 March. The earliest opportunity we had to give the allocations to the health boards was the day after the budget. I met with the health boards on 2 April in order to give them their allocation for the current year but at that stage three months of the year had already passed.

It is only right we should ask why Fine Gael did not send out those allocations. It was irresponsible not to notify them and thereby lost them valuable time in adjusting to the circumstances of the year. Deputy Boland, as Minister, knew whichever way it went it had to be a difficult year — primarily I suspect because he, too, could not accept the under-provision for the general medical services scheme. That was the reason he did not send out the allocation. He knew the unreality of the expectation of collecting £16 million from prescription charges in the current year and the inequity of attempting to do so.

I assumed office on 10 March 1987. I and my Cabinet colleagues were, to put it at its mildest, shocked to discover the real extent of the financial problems facing the country.

You were told often enough.

We had to face the inherent threat that if we did not get public expenditure under control the external agencies would step in and do it for us in an unpalatable and clinical way. Despite those underlying financial problems I, with my colleagues in Cabinet, examined the allocations proposed for the health services, added to them in certain respects, providing for example, an extra £25 million for the general medical services. I rescinded the decision to impose prescription charges, and provided for out-patient and in-patient charges supported by a Voluntary Health Insurance scheme moderately priced. In this respect, I made absolutely sure by the list of exemptions which I included that there would not be hardship imposed upon anyone. I also restored the right of doctors working in the remote areas to dispense medicines for those living at a distance from pharmacies.

In issuing the 1987 letters of allocation to health boards and voluntary hospitals I laid down very clear and specific guidelines to the agencies on how they should frame their budgets. My concern was to ensure that the basic fabric of our health care system should remain intact while, at the same time, ensuring that the best possible service should be delivered within the amounts available. The specific instructions to agencies required that they should seek to make necessary spending reductions to the institutional area, and in particular in the acute hospital sector. The overall bed provision in our acute general hospitals is widely accepted as more than adequate to meet our needs and is high by reference to international norms.

I directed agencies that community care services should be protected as far as possible including key services for the old and housebound, such as community nursing services, services for the mentally handicapped, home help services and meals-on-wheels, child care services, particularly day care and pre-school services for deprived and disadvantaged communities and aftercare programmes for children leaving long term residential care. Adequate provision should also be made for boarding out payments to reflect the trends towards increased numbers in foster care. I asked the health boards to ensure that their expenditure on these services should be maintained at least at 1986 approved levels in real terms. This approach is in keeping with the modern view about the nature of health care and with expressed Government policy to protect primary care within the community rather than hospital-based treatment.

The guidelines I have referred to had regard to the overriding need to maintain frontline staff, who provide a service directly to the sick in our community, at an acceptable level. I did not think it unreasonable that the letter of allocation should require the health boards and the voluntary general hospitals directly funded from the Department to face up to the harsh reality of the need to bring their expenditure into line with what their allocations could realistically support instead of, as in previous years, incurring overruns which essentially went unchecked. There were overruns of £19 million in 1985 and £36 million in 1986, the responsibility of the Fine Gael-Labour Government——

Your Fianna Fáil colleagues on the health boards.

——who were in office during those years. These overruns are the root cause of their present difficulties. That is the cause of the problem and the difficulty faced by my Department and by the health agencies at present. Talking about accountability, I was surprised at the attack Deputy Molloy made on the voluntary hospitals who, first of all, have their accounts audited by private commercial auditors and then checked by the departmental officer to ensure they comply with the specific guidelines laid down. In my meeting — the first meeting since November 1983 with the eight chairmen and CEOs of the health boards — I elaborated on the guidelines which should ordain their approach to living within the allocations while, at the same time, preserving essential services. I asked them particularly to draw up realistic plans to live within their allocation and I told them that officers of the Department would consult with them in this regard.

The House will be aware that a team from my Department met the management teams of each of the health boards and voluntary hospitals in the last fortnight. My Department are now analysing the agencies' proposals with a view to ensuring that, overall, the service plans are co-ordinated and rational. This will require new arrangements for co-ordinated action between health agencies locally and my Department and those arrangements are being put in place.

An examination of public services generally by the Government led immediately to the conclusion that, to a very significant extent, the problem of the numbers employed in the public sector has not in reality been tackled in recent years. For example, when I took office there were some 62,000 people employed in health boards and other agencies to provide health services. Ten years ago there were 51,000. I find it difficult to accept that this increse in numbers has produced a corresponding improvement during that time in the quality of the service delivered to the patient. Given the financial difficulties facing the economy at present this clearly is a situation which could not be allowed to continue. In his Budget Statement the Minister for Finance announced that no public service vacancy could be filled without the express approval of the Minister for Health with the consent of the Minister for Finance.

Following discussions with the Department of Finance it was agreed that because of the late stage in the financial year, the random effect on services by closing down all vacancies as they occurred and the particular sensitive nature of the health services a package of (i) non-filling of some vacancies; (ii) reduction in current temporary employees and (iii) reduced scale of locum cover, to achieve an overall reduction of 2,000 posts by 31 December 1987 was agreed.

The setting of a specific target for each agency gave the managements of health agencies flexibility to ameliorate the harsher effects on services of a total embargo on the filling of vacancies and the provision of locum cover. At the same time it involved agencies taking a much stricter approach to the employment of temporary staff and the provision of locum cover than previously: in fact, it seems that these forms of employment have been used by many agencies to circumvent earlier controls on the numbers employed in the health service.

There has been considerable inaccurate public comment of late suggesting that clerical and administrative staff in the health services have been dealt with more leniently than other categories of staff as a result of the economy measures being taken by health agencies and that these grades have been spared at the expense of nursing medical posts. I would like at this stage to deal briefly with those allegations.

The factual position is that health agencies were instructed to reduce overall staff numbers by a number of means and that these reductions were as far as possible to be spread evenly across the grades. Clerical and administrative grades account for about 10 per cent of all staff employed in the health services. The reality is that less than 2 per cent of the total staff of health boards is engaged in central administration. The remainder are involved in delivering vital services directly to the public. These would be community welfare officers, staff involved in determining eligibility for medical cards, and those involved in the making of payments under the drugs refund scheme and the payment of cash allowances to the disabled and the handicapped. Other important functions such as the payment of wages and pensions, ordering of goods and supplies, maintaining proper medical records and scheduling of our-patient clinic appointments must also be carried out by these grades even in these difficult times.

Deputies will also be aware that the task of collecting the new out-patient and in-patient charges which are of such vital importance to the financing of the services this year will also fall on these grades. It is clear therefore that the scope for widespread reductions in the administrative grades employed in the health service has been considerably exaggerated. I am satisfied on the basis of the most recent information to hand that the numbers in clerical-administrative grades will be reduced proportionately consistent with the many important functions they carry out.

One feature of reductions in personnel and pay costs, calls for the general payment of a new flat allowance of £50 per week for student nurses during the first year of their training, plus free accommodation, in line with a scheme already in operation in the North Western Health Board.

There is no doubt that the health services' difficulties have been hyped by various elements, who should know better. There has been a great deal of immoderate and insupportable statements which have caused unnecessary anxiety to patients and relatives alike. I do not for one minute attempt to deny the right of the individual to reasonable protest but I do decry the right of persons or groups to cause public unease or to suggest for one minute that the health services are reduced to the state at which they cannot provide services necessary to meet the essential requirement of our people.

The task now is to shape a health service which is affordable and sustainable. It seems that there are two critical areas to be addressed.

We must have an acute hospital system which is geared to our ability to pay, which is effective and caring, and which is efficient. Alongside it and associated with it at all vital points, we must have a primary health care system which is capable of doing many of the things now done in hospitals. I want to elaborate on these two key points.

In adapting the acute hospital system to our present circumstances, we must take a number of important decisions. The House will accept that the consultant is central to effective and economical running of the acute hospital services. They will have to play a primary role in the management of the funding available to their specialties within the hospital.

I have indicated to the IMO in my meetings with them that I am anxious to press on with a review of the common contract, a review which is overdue and which should have been held last year and in which among other things I intend to place considerable emphasis on the need for proper monitoring and accountability. We must decide on the level of funding we are prepared to devote to this sector of the service. In making this decision, we must ensure that there are adequate funds for other services, including primary health care.

We must organise the system so that each hospital within it is medically viable and gives a quality service in a business like manner.

We must quickly develop a form of primary health care which provides a real and available alternative to hospital care. This is not now the case. It can hardly be, as long as the general practitioner services remain divorced from other services.

My Department have made a preliminary assessment of the acute hospital system which we could sustain at an acceptable level of quality, having regard to our available resources. There is no need to believe that such a rationalisation would leave us at any disadvantage compared with other countries. The Danes for example, in the past five years have reduced the number of acute beds in their country by 6,000. Each remaining bed and hospital in the system will be worked more intensively but will be properly supported.

Indeed, it is no harm to point out that in all European countries and in the United States there is considerable concern at the cost of health services and at the inability to meet that cost, particularly in relation to high technology medicine. All European countries have had to go through the same traumatic experience which we are going through at present as regards having to bring proper financing into our health services. Much wealthier countries such as Germany, France, Denmark, to which I have already referred, and the United Kingdom have all had to face the reality that they were unable to provide the necessary finance to provide the level of service and the high technology medicine people expected. It is also no harm to point out the escalating costs of our own health services which went from £146 million in 1974 to over £1,300 million this year. It has been stated that if that type of escalation was to continue to the turn of the century it would take all of the budget to provide finance for the health services alone.

I am satisfied from my own experience, from the many reports which have been completed on this subject, and from the information available to my Department that there is scope for a significant reduction in the number of acute beds. However, we will only get the real benefits from such a reduction if the beds are distributed as part of an integrated system. The proposals for reductions which have now been put before the Department are being examined to ascertain if they are in keeping with what will be our requirements in the medium and long term.

In my recent address to the association of health boards, I made it clear that I do not believe there is any particular merit now in reducing the number of health boards. I hold the view that it is important that there should be some form of devolved administration to ensure that the services which are necessary are available at local level and that there is access to those services. I believe it is only right that on difficult decisions which have to be made there should be an input at local level and that elected representatives and those who represent the people working in the health services, the doctors, the nurses, the dentists and the pharmacists should have an opportunity to decide priorities in their own area. We have seen that happen over the last three weeks when the health boards met and decided on the priorities in their own specific health board areas. In a democracy, that is how it should be.

I refute the criticism that I, as Minister, am hiding behind the health boards, because if I were to decide where the savings should be made in each county, without reference to the local democratic organisations, I would be accused of being dictatorial and of not giving local people an opportunity to decide on the priorities in their own specific areas. I believe that in the past three weeks the health boards have faced up to their responsibilities. They had to make difficult decisions and they decided what the priorities were. I fail to understand how any Minister for Health can be criticised for allowing local democracy to have an input into decision making, as has been done. As I pointed out, the Department made the allocation to the health boards and to the voluntary hospitals and they decided how they would effect the savings.

A team of senior officials from my Department visited every health board and every voluntary hospital to examine how the savings are to be made and they reported back to me. We are now studying the results of their travels around the country to ensure that we have a rationalised health service in place. I am satisfied that we will have a rationalised health service not alone for this year but for the years to come. As Minister, I will accept responsibility for my actions and I certainly make no apology for allowing the health boards to have an input into decision making on fundamental matters such as the priorities in their own areas.

We can now move quickly to streamline our acute hospital system. Starting next week, officers of the hospital services division of my Department, with assistance from Comhairle na nOspidéal, will commence consultations in each health board area. They will meet with the management of health boards and voluntary hospitals and the staff interests involved to devise a plan for each area. In other words, there will be a consultative process in each health board area. I believe this is desirable. Not alone will it give the health boards and voluntary agencies an opportunity to come together and examine the situation and ensure that there is rationalisation in their own area but it will also give those working in the service an opportunity to make their views known on how funds should be expended in their area. When that is done, the results will be considered globally in the Department to ensure that they are integrated at regional and national level. I will then convene a national conference of the various interests affected before finally deciding upon the definitive national plan. Because of the implications, not least in the making of allocations in respect of 1988 and subsequent years, this plan will have to be settled by the end of July.

We do not start from scratch. First of all, a number of areas require relatively little attention to bring them into line with current concepts of a good hospital service. Secondly, we have available from Comhairle na nOspidéal a great many helpful reports and recommendations. Thirdly, my Department have already undertaken a considerable amount of work in analysing the implications of the general course which I am advocating. The Department will in their work draw on available sources of expertise, influence and advice.

There are special problems in the urban areas of Dublin, Cork, Limerick and Waterford. There is, particularly in Dublin and Cork, an urgent need for better co-ordination between the voluntary hospitals and between these hospitals and the health board. I am asking my Department to initiate consultations immediately with the various authorities in these areas to work out suitable arrangements for co-ordination of existing services and appropriate involvement in the future rationalisation of the acute hospital system.

In settling the future level of expenditure on acute hospitals, I propose to set aside funds for the development and support of primary health care. I am studying work which has been carried out on the adequacy of the primary health care elements of community care service. I envisage that in one or two areas we will get some pilot schemes under way as soon as possible. The purpose of the schemes will be to test, in practice, the extent to which alternatives to hospital care can be developed and to work out the best working relationships between hospitals and community based services. We want to ensure that a fully operational primary health care system, when in place, will conform to the needs of our people, let it be in remote rural areas or in the inner cities. I will be asking for the wholehearted support of all those concerned in the implementation of these pilot schemes.

Finally, I am preparing a statement on our priority needs in the institutional care of the chronic sick and the terminally ill. We need this quickly so that we can properly explore all reasonable options in the rationalisation of the acute services.

I have set up a special containment and efficiency unit within the past two months to provide this support service to the various agencies. Information will be available to the health boards and to the voluntary hospitals on the purchasing of supplies. I believe that this co-ordinated approach will be extremely useful.

It is very clear that we need to give urgent and detailed consideration to the future financing of our health services. I have, therefore, with the Government's approval, made arrangements to establish a broadly based review group to examine the appropriate level and sources of funding consistent with the maintenance of an equitable, adequate and comprehensive health service. I will be making a statement on the constitution of the group within the next two weeks.

Two months is not a long time in office but I think I can claim to have got a grip on the situation. The Government have faced up to the reality, which the previous administration ran away from, namely, that there is a limit to the amount of money it is possible to spend on health services in our present serious financial situation. Since coming to office I have introduced an amendment to the Health Act which was passed in this House and made regulations to impose the out-patient charges. Other motions and adjournment debates relating to the so-called health cutbacks have been dealt with. I have had to devote time to preparing very necessary and very delayed children's legislation and I have introduced the AIDS information campaign which I am glad to say is going extremely well. I might say in this regard that I was heartened to discover at an EC Council of Health Ministers meeting last Friday how well my campaign measures up to those being undertaken elsewhere.

I should point out before I conclude that the cut of £22.8 million referred to in the Fine Gael amendment cannot be substantiated. I would, in conclusion, urge that we in this House should, when we complete this week's debates and discussion, allow for a cooling off period on health matters to enable a rational and sensible approach to the problems in this area to prevail. I believe that the challenge can be overcome and that we can emerge out of the present phase with a leaner, fitter, better and more effective health service.

I move amendment No. 2:

To delete all words after "Dáil Éireann" and substitute the following: "wishing to remain within the 1987 Revised Estimates for Health

(i) notes that there is widespread public concern about the provision of Health Services throughout the country.

(ii) condemns the failure of the Government to plan the impact of the extra cut of £22.8 million imposed in the estimates to Health Boards and Health Services of March 1987 compared to January 1987 as well as the accelerated phasing out of the Health Board deficits and propose that the Government in consultations with the partners in the Health Services devise a strategy for staying within the overall budget allocations embracing a review of

(1) Health Boards structures and administrative overheads in the Health Services.

(2) the charges for prescriptions in order to make more funds available for the delivery of services to the public

(3) a review of the common contract".

I would have been amused, if the situation had not been so serious, to hear of the Minister now consulting with groups throughout the country on the best way to run the health services. When in Opposition, he seemed to have all the answers and when the former administration put forward their proposal, he was quite definite that there was a better way. I am afraid he does not have a better way — in fact he has lost his way.

We will pay our way.

The Minister does not know where he is going and the public are suffering. He talks about hype being generated throughout the country by different interests concerning the cuts. What is he talking about? I shall list a number of serious situations arising even this week. First, 1,850 junior hospital doctors will strike from 6 June next indefinitely at hospitals where management refuse to discuss job losses with the doctors. Secondly, and this is not a hype either, in Limerick angry hospital workers from Clare, Tipperary and Limerick this week marched on the Western Health Board offices to protest at job losses and cuts in the services to the public. In Carlow, a last ditch effort has been made to save Bagenalstown 32-bed District Hospital which has been ear-marked for closure by the South Eastern Health Board. That is no hype.

Community welfare officers were the subject of a discussion today on the Order of Business. Members of the Confederated Workers Union of Ireland will stop work on 29 May next over a threatened 10 per cent cutback in jobs in the Eastern Health Board. There will be a demonstration this week in Dublin to protest at the closures and cutbacks. In my city, in the North Infirmary, to which Deputy Quill referred earlier, the board of management this week met, for the fourth time in only two weeks and decided to reject the cuts being imposed by the Department of Health. That decision will either force the Department to change their minds and increase an allocation or to close the hospital which has given the north side of Cork city unbroken service for 132 years. These are no hypes. These are just examples of the many crises in the health services at this time. The last example reflects deeply the effect that the virtual elimination of the health services will have on the entire community on one side of Cork city.

When this Government were elected, they were asked to do the job of keeping public spending under control. They have gone ahead in a trigger-happy manner and brought great hardship on those most in need of care. We all expected savings to be made and rationalistion to take place, but we expected that these actions would take place only after full consultation with those responsible for patient care and for the provision of these vital services. The consultation seems to be starting only now, when irreparable damage has been done to the health services. Hospital patients, the poor and the deprived are being put in the front line of these savage cuts. Administrative and other economics have not been thought out or even explored. The health services are in turmoil and if there is a need for a moratorium or a cooling off period, the time for that is now so that the whole situation can be looked at in a cool and calculated manner. Before damage is done to the health services I ask the Minister to identify his better way to have it thought out, with consultation with the people who are providing the services. I support the calls being made for a national think-in on the situation. The Minister must take action, so that reorganisation of the health services is undertaken in a rational and humane way.

I put it to this House that the cuts made have been made without proper thought in regard to the possible consequences. How can anybody contradict that statement when we have seen what has happened in the last seven days? We have seen a clinic dealing with child abuse in this city threatened with closure. Deputy Quill earlier referred to a clinic in Cork city under the control of the Southern Health Board, which deals with the whole north Lee area, closing next Friday because of cutbacks — a clinic dealing with the most disadvantaged children in our community.

These examples of the false economy, woolly thinking and disjointed actions which have taken place throughout the health system and which will leave huge gaps in our health services to the public at the end of the day. Every health board and every agency are doing their own thing in an adjointed, unco-ordinated way. They are like headless chickens running around in a disorganised way, leaving serious gaps in our health services.

Before any further cuts are made, let me mention one inaccurate statement that has been made recently — and I am being charitable in using the adjective "inaccurate". The Minister repeated tonight that the previous administration had left the health services £50 million short.

£55 million.

£55 million short. I would remind the Minister that the health boards that overspent against the wishes of the Department of Health were controlled by his party and that he was a party to some of the decisions made. I would further remind the Minister that two of these health boards which are Fianna Fáil controlled are still refusing to make the cuts his Department are attempting to impose on them that Deputy Leyden would not agree with the Minister.

The demand for the elimination of the deficits that were accumulated by the health boards over five years will take, at a conservation estimate, about £10 million out of the system this year alone. That, coupled with the reduction in the hospital services allocation in this year's budget to £22.8 million, would take a total of over £30 million out of the health services for this year. That is the reality.

The Minister said that the figure I quoted could not be substantiated and I should like to deal with that suggestion. The 1986 Health Estimate was £1,168,791 million while the January Estimate was £1,177.6 million. The March Estimate was £1,168.8 million. The January budget proposal would have given a net increase of £3.5 million while the March budget shows a drop of £5.128 million compared to the 1986 Estimate. The most savage decrease arises in the programme of grants to health boards and other health institutions. The allocation in 1986 to health boards, excluding the GMS, was £656 million while the January budget proposed an allocation of £667.9 million, an increase of £11.9 million or 2 per cent. The revised March figure was £660.7 million, an increase of £4.5 million over the 1986 figure but a £7.2 million reduction on the January Estimate. The allocation for "Other Institutions" in 1986 was £298.7 million. The January budget proposed £303.4 million, an increase of £4.7 million or 2 per cent over 1986, while the revised allocation in March was £290.8 million, a reduction of £7.9 million or 3 per cent. That represents a reduction of £12.6 million compared to the proposed January budget. With regard to Capital Services the allocation in 1986 was £58.7 million while the January proposal was to allocate £60.6 million, an increase of £1.9 million or 3 per cent. The revised allocation in March was £57.6 million, a reduction of £1.1 million or 2 per cent. Compared to the January allocation that represented a reduction of £3 million. The total reduction in the allocation in March, compared to the January allocation was £22.8 million.

Admittedly, Fianna Fáil will take in £6 million in in-patient charges but that is only a notional figure and it may not be collected in full. A condition of all allocations this year is the elimination of the accumulated deficit over five years to 1991. Therefore, each health board will have to eliminate its deficit within this period. Prior to this there was not a firm agreement on how the deficit could be eliminated. For example, in the Southern Health Board, who have a deficit of £7.2 million, £2.6 million is being eliminated this year by using European Social Fund moneys. In 1986 the Department withheld £855,000 towards the deficit and in 1984-85 they withheld £700,000. As one can see from those figures in the case of the Southern Health Board £1.75 million is being taken out of their funds this year to reduce the deficit. If each Member applied those figures to their health board we would get a conservative figure of £10 million being taken out of health board funds for this year, together with the reduction of £22.8 million.

With regard to recruitment of staff, up to March a one-in-three embargo operated but now we have a total embargo which is expected to result in a saving of £11 million. That embargo is causing chaos in all health board areas and in voluntary hospitals. I have no doubt it will have a catastrophic effect on services to the public. Another serious problem for the health boards is that their maximum overdraft will be limited. That would cause cash flow problems for health boards. The result is that health boards will have to take action in the pay area to redress staff numbers and apply the embargo. One example is that the North Infirmary in Cork will have to close 40 of the 103 beds. That is an indication of the problems the cutbacks are causing.

The drastic reductions in the community care programme, despite the Minister's assurance tonight, are apparent from the figures. Those reductions, coupled with the proposals of some health boards to close down accommodation for psychiatric patients, will cause chaos in the community. In the Southern Health Board region the proposal is to have a 30 per cent reduction in beds in acute units in all hospitals, the closure of seven wards in Our Lady's Hospital, the relocation of patients in other wards and the discharge of long term patients into the community. Some patients who have been institutionalised for 35 years are threatened with discharge from our hospitals into a community that cannot cater for them because of the reduction in the allocation for community care.

I hope to be positive in my comments and I will put forward suggestions on how improvements can be made. I agree with many of the points raised by the Progressive Democrats. Many of their proposals are a direct lift from the report of the Committee on Public Expenditure, of which I was a member, published in January. That report dealt at length with the common contract, the inadequacies of it and the need for a review of it. I was pleased to hear the Minister express the view that the common contract should be reviewed. He expressed a similar view some weeks ago and I should like to know what progress has been made since.

There will be nothing left to do at the end of five years if we do all the things being suggested by Deputies.

The IMO who have been to the fore expressing their dissatisfaction with some of the cuts being made are reluctant to enter into negotiations on the common contract which was scheduled for review since 1986. To date that organisation has refused to renegotiate that contract which has been in existence since 1979 and gives some of its members very liberal conditions in our hospital service. I accept that the majority of consultants in our hospital service are dedicated people but a minority of them are ripping the system blind. The common contract for some of the unscrupulous individuals within the service is a licence to print money. Deputy Molloy, when he doubled their salary to £64,000 because of their access to private practice within the public service, was being very conservative. I know of one consultant in the Cork region who can earn £200 for two hours work using hospital staff and equipment in the Cork Regional Hospital. That affects the morale of other staff in the hospital service. It is shattering to those whose salaries are being cut to the bone. In my view that was the cause of a lot of the bitterness that occurred during the radiographers' dispute. They could see their colleagues on the medical side ripping the system blind. That small minority of consultants will have to be nailed. It is up to the Minister to get the IMO to the negotiating table as soon as possible.

There is agreement amongst all with the exception of the Minister, on the crying need to reduce the number of health boards. The debate tonight is very confined but the evidence from the Minister's replies in the Dáil last week shows that we are top-heavy with administrative and clerical staff. In 1977 the administrative and clerical staff comprised 10 per cent of all staff according to the Minister's reply on 12 May 1987. In 1986 administrative and clerical staff comprised 14 per cent of all staff in the health service. That is a 40 per cent increase in administrative and clerical staff. That must be looked at.

We have one health board, the Eastern Health Board, dealing with one-third of our population——

I am sorry to interrupt Deputy Allen but we must now deal with other business.

Debate adjourned.