JOINT COMMITTEE ON HEALTH AND CHILDREN debate -
Thursday, 29 Apr 2004

Health Service Executive/Health Reform Programme: Presentation.

Chairman

I welcome Mr. Kevin Kelly, executive chairman, Mr. Hugh Cawley, head of change management, and Mr. Killian McGrane, assistant principal officer, of the interim Health Service Executive and the national steering committee. I invite Mr. Kelly to commence the presentation on the future plans for the interim Health Service Executive, the national steering committee and the health reform programme.

I draw attention to the fact that committee members have absolute privilege but that same privilege does not apply to those appearing before the committee. I remind members of the long-standing parliamentary practice that members should not comment on, criticise or make charges against a person outside of the House or an official by name or in such a way as to make him or her identifiable. There will be a question and answer session following the presentation.

Mr. Kevin Kelly

I thank the committee for the invitation to appear before it. I will give the committee an update of the activities of the last few months since we commenced in the middle of January. I will also provide an update of the activities of the Health Service Executive and the steering committee.

The committee will know better than I that our road map is the Cabinet decision in this area and the three reports, Prospectus, Brennan and Hanly. In September the Department, with a number of people from the health service, formed a number of groups and approximately 13 projects. A composite document was the result. That is the road map with which we now work.

In the initial stages I spent six to eight weeks on the road talking to people on the ground to get a sense of what they thought of the reforms. I wanted to form a practical view of their views on how reforms might be implemented from the point of view of service delivery. I came to a clear view on two things. If these reforms are to be implemented then the people on the ground must be involved, it cannot be driven by management consultants. It is now about to go live and it is the people in the service who must have the say on how these reforms are to be implemented in the most practical way.

We have developed what I call three tenets for testing each aspect of the reform on the ground. If something does not meet up to these tenets, we will go back again and again. The three tenets will not happen immediately but taking a medium-term view, what is put in place must improve the patient-client journey; from the point of view of staff it must create a better, more challenging and encouraging environment and from the point of view of the State, the large amount of money being invested in the health service must be seen to deliver value for money. These are the three tenets in which we passionately believe. Everything we do is being measured against them.

We have assembled a change management team. The team comprises people from all over the service, from the medical and nursing areas and from the health boards. They have been seconded to the executive until the end of the year and will then return to their original work. They number approximately 30 people and they have been divided into three or four groupings. One is to focus on the composition of the national health office, a second is to focus on the primary community and continuing care area, the third will focus on shared services and the fourth on the issue of communications. I will return to that because it is emerging as a big issue.

Stages have been set as we proceed towards the end of the year, when the HSE goes live, and at which there will be deliverables in terms of the practicality of implementing these reforms. The work of the team is to talk to people on the ground. They are examining the system from bottom up and top down to ensure that what is put in place in January will, over time, meet the three tenets I have outlined. If something looks as if it will not improve the situation, we will take a fresh look and tease it out further.

One of the issues about which there is much uncertainty and concern is the question of the four regions, how they will be split and where the head office for each region will be located. One of the project groups to which I referred produced a draft paper on the region and the criteria it used seem sensible. Although it is creating much uncertainty in the system, our view is that it will be too early to make a decision on this until we test its recommendations against what we see as the best method of service delivery. Work is still under way on this issue and we hope to have clarity within the next couple of months.

We also formed a separate group in the area of information and communications technology. It is very clear that the health service suffers from a serious lack of investment in technology. I regard it as fundamental to improving services to patients and clients. Much work has been done and there are significant proposals in the pipeline. However, we want to step back and validate these proposals over the next month or two. At the heart of the matter is the wish to put in place a system whereby all instances of patients or clients coming into the primary or acute sectors will be captured technologically. Consequently, all the voluminous paperwork that is now required will no longer be necessary and staff will be freed up to focus more on the key issue of delivering a better service.

Communications is a major issue. Up to 100,000 people will be employed by the HSE on 1 January. As the committee knows, there is considerable insecurity and uncertainty. We have been devoting considerable time in recent months to talking to people and obtaining their views on the reforms and the best way to implement them. We do not have all the answers but we are engaging with the people. The current state of technology and the large number of people concerned are such that it is hard to communicate with them speedily on what we are doing. We have made a commitment to engage with everybody and we will be relentless in this regard. I consider this to be fundamental.

The amount of change taking place is leading to much uncertainty. I believe very strongly in having proper consultative dialogue with staff representatives. We have met the Health Services National Partnership Forum a few times, with which we are working to draw up a protocol on the type of dialogue we will have as we become clear on how the changes will be implemented. I have also met a large number of the unions and we have had positive dialogue. We regard consultation and partnership as critical in bringing about these changes, and we are putting work into this area.

Since the HSE must be live on 1 January, we have advertised for the position of chief executive. Also, while one would normally allow a chief executive to appoint his or her own management team, the deadline is so tight that we must also appoint the next layer of management. We are having discussions with the Department of Finance on grading and other issues. We will be advertising the next layer in the coming weeks. The positions will include director of the national hospitals office, director of primary, community and continuing care, director of shared services, director of information technology and director of human resources. We are trying to establish exactly what kinds of posts we will have on the medical side.

The board of the executive has met twice. It is very enthusiastic, committed and interested and we will have a further meeting in the next week or two.

The national steering committee has had one meeting and we are planning to hold another soon. The role of the steering committee, as this committee knows only too well, is to pull together all the various reforms. We are working on streamlining the agencies, setting up the health information quality authority, the reorganisation of the Department of Health and Children - the changes will have a significant impact on the Department also - the implementation of the Hanly recommendations and the question of the medical contract. We are in debate with the Department on the question of legislation. The legislation is fundamental because, if it is not in place, its absence will be a show-stopper on 1 January. On the changed management team to which I referred, we are now engaging with the Department in all these areas and are working with it in partnership. The Hanly report is obviously on hold because of the discussions about the contract. Once the negotiations on the contract are under way, we intend to have representation on the negotiating team.

The programme of change is extraordinarily complex. The Minister has described it as the largest change programme in the history of the State. On 1 January, there will be a streamlining of structures and this will lead to a much better focus on service delivery. However, this is only one side of the equation. It cannot be a question of structures alone. The medical side, whether primary or acute, must also be streamlined from the point of view of the patient. It must work in partnership. As we work through the year, I hope we develop a better partnership on both fronts. That is the current position and we will be glad to deal with questions.

Chairman

I wish the executive well. It will have a difficult task. Mr. Kelly spoke of the lack of information technology in reference to streamlining services. I believe the Committee of Public Accounts discovered that the technology of the Department and that of the health boards is not in tune and therefore one cannot feed into a central system. There are about 5,000 people involved in the general services system.

The executive is to provide added value for the patient. Does Mr. Kelly envisage having a major problem recruiting more front-line people to deal with patients, as against the number of people within the central services? It would be ridiculous if every relevant body was involved in recruitment. I take it there will be a central recruiting agency in the new structure, that there will be a central agency in terms of information technology and that purchasing will be centralised. Does Mr. Kelly envisage that a significant number of people will be surplus to requirements in the central services and that some of these can be relocated to the front line?

Mr. Kelly

Each of the 11 health boards and areas employs 5,000 to 7,000 people. They all have their own management structures. These structures will disappear and will be replaced by structures in the four regions and by the structure put in place in the National Hospitals Office. The changed management team's role is to work out the implications of this and decide what roles will be performed in the future. I envisage that there will be new and perhaps more challenging roles for some people. At the top layer, there will certainly will be significant change.

Deputy McManus

I thank the representatives of the interim Health Service Executive for attending this meeting at the request of the joint committee. Before I ask Mr. Kelly some questions, I would like to wish him well with the daunting task he faces. He used the term "confusion", which is a good and appropriate word in the context with which we are dealing.

Mr. Kelly stated at the outset that he is working with a road map that has been prepared by the action groups. The members of the joint committee have an information deficit because we have not been given a copy of the road map. As we do not know what is in Mr. Kelly's mind, it would be helpful if the committee could be furnished with the information in question. An enormous number of reports have emerged from the Department of Health and Children over the years and in view of this, if the interim executive is working to a road map, we need to know what it is.

I would like to ask about the work the interim executive is doing to build up the new structures. When the reform programme was announced, it was, interestingly, the Minister for Finance who stated that there would be no job losses in the health boards. There are real doubts about the establishment of new structures while a commitment is in place that jobs will not be lost in the current health board structure. People come to the joint committee on a continual basis to make formal presentations. They may be looking for rheumatologists, for example, or for oncologists. None of the groups that has attended a meeting of the committee has sought additional administrators. Given that a commitment has been made that no jobs will be lost, how does the interim executive intend to deal with the danger that administrative structures will be put in place, not to replace similar structures but to work in parallel with existing structures?

This afternoon, the Dáil will discuss the Health (Amendment) Bill 2004, the effect of which will be to begin the abolition of the health boards. Many people are concerned that there will be a lack of democratic accountability. Local communities will be unable to seek to have their voices heard within the new structures, which will be much more distant than those to which we are used. Is the interim executive aware that a similar process was undertaken in New Zealand, where the number of health boards was reduced from 14 to four and then to one? The latest news is that there are now 24 district health boards in New Zealand. Is the New Zealand experience not a salutary lesson for the interim executive as it embarks on a process which, in my view, carries a real danger of removing democracy from the system and introducing a form of centralisation that will result in community care services becoming more distant, rather than more in tune with local needs?

I do not claim that technology is not a huge problem. Everybody will be happy if it is dealt with.

Mr. Kelly did not mention that our health service is unique because it is based on inequality and a form of apartheid that would be automatically rejected by any other European country. Mr. Kelly spoke about patients, but the experience of public patients is completely different to that of private patients. While public patients are treated well by staff, they are treated very inadequately by the system, generally speaking. Mr. Kelly did not mention that the issue of inequality has not been dealt with, a criticism that was made in the report and that was discovered in the context of national steering committee meetings. It is deeply disturbing. It is wrong that people are being treated in such a manner. I ask Mr. Kelly to outline whether he believes that his role involves ensuring that such inequality is dealt with and the challenge is met.

I wish to conclude by making a criticism that I have voiced before. The national steering committee is a hugely important body, which is central to this project. It consists primarily of the interim executive, with which I have no problem, and civil servants. The only person with a direct involvement in the health service is the managing director of a pharmaceutical company, or a drug company. I consider that there is a conflict of interest issue in that regard. I do not know why the man in question, for whom I have no disregard, has been appointed to such an important position. There is a potential conflict of interest if the daily position of a person in a hugely powerful position in the health service is to make profit from selling pharmaceutical products. I ask Mr. Kelly to respond to my deep concerns in that regard. Can he explain to me how such a conflict of interest can possibly be addressed? Why has the man been appointed at all?

Mr. Kelly

The Deputy asked me about the road map. The interim Health Service Executive operates on the basis of nothing that members are not already aware of. We operate on the basis of Cabinet decisions. The road map to which I referred consists of the establishment of a national hospitals office and a primary, community and continuing care office, as well as developments in terms of shared services and the focus on the four regions. I have read the composite document to which I referred, but I have to confess that I am not sure of its exact status at this point. It summarises the 13 projects that comprise the reforms and teases out how they might be practically implemented.

Deputy McManus

Can the interim executive give the committee a copy of the composite document?

Mr. Kelly

I will look into it and return to the committee on it. I was also asked about job losses. A commitment has been given that there will be no involuntary redundancy here. I fully accept the Deputy's point that there will be significant restructuring. We are at an early stage of that work at present. We are trying to work out the implications and are considering the appropriate alternative roles for people whose roles will disappear. I feel that we will be able to put in place a more streamlined and less fragmented system of delivery. It will take time, but I believe that it will improve the service. As a lay person who is new to this area, I sense that if we can put in place the thrust of the changes we will help to improve the system, for example by shortening decision-making and by reducing the level of fragmentation. We will be able to focus in a much more singular manner on some of the issues that have been mentioned by Deputy McManus, such as accident and emergency departments and waiting lists.

I have also been asked about the democratic deficit. I am aware that the Minister has had discussions with the chairman of the General Council of County Councils. Having discussed the matter with the Minister, I understand that a process will be put in place. It seems that arrangements will be made for the director of each of the four regions to meet local representatives four, five or six times each year. I am not sure exactly what the Minister has in mind. The meetings will give people an opportunity to express local concerns and to make an input at local level.

I have also been asked about community care. As somebody who is new to this area, it has struck me that a great deal of the media focus is on the acute side. However, I consider the reforms on the primary, community and continuing care side to be more significant. There is a timescale of three to five years, but I think we should try to accelerate it. If we can improve primary care, the Government will enjoy better value for money in the long term and pressure will be removed from the acute side. As regards priorities, my sense is that we will put a great deal of focus on the primary side. Eleven pilot schemes are testing the thrust of the reforms at present. If we can get the reforms in terms of the patient journey to work sooner, rather than later, the service to patients will improve the situation and take pressure from the acute side.

I agree with the Deputy's sentiments on public private partnership but we are at a very early stage of this. We have no responsibility for the service plan for 2004 as we begin to operate only in 2005. I assure the Deputy that it is an issue which will be in the minds of my colleagues and I. We will be considering ways to address some of the concerns the Deputy has expressed and improve the situation.

The Deputy mentioned a perceived conflict of interest involving a member of the steering committee. I have talked to all the members of the board of the interim Health Service Executive and agreed a procedure whereby if there is any perception of a conflict of interest, I must be notified. We will then weigh up whether there is a real conflict of interest. My understanding is that the gentleman to whom the Deputy referred was selected due to his experience in change management. He is a former psychiatric nurse. Having met him, I am completely comfortable and consider him to be committed to his role on the steering committee. If he felt he had a conflict of interest, he would say it immediately and resign.

Deputy Cowley

I welcome the group to the committee and wish its members every success. They face an onerous task. Are they aware of how onerous the task is?

Mr. Kelly

The Deputy does not need to tell me.

Deputy Cowley

As a general practitioner, I see the real problem as being one of apartheid. There is health apartheid in Ireland and we must consider ways of changing that. The real test of the health service is the people on trolleys who are not receiving a service. The real test involves those people suffering in pain and waiting for up to six years for services which should be accessible within a month. Where they are not available in that time, people sustain permanent damage. People die on waiting lists.

I was interested to hear Mr. Kelly talk about investment in communications. What is his opinion on the under-investment in the health services, the problem that needs to be dealt with more than any other? There have been major difficulties and I have been one of those who has called for the health board system to be reviewed and addressed. Under-investment is the most significant problem and anything else is a smokescreen around it. We have seen a series of reports which have not been considered adequately. Due to lack of investment their recommendations died a death.

I noted Mr. Kelly's statement that he was interested in primary care. Not one cent is being directed towards primary care in the health strategy this year, which is indicative of current circumstances. Mr. Kelly said his board would listen to and test what people are saying on the ground. People may be starting to learn the lesson of Hanly. What experience does the board feel it has which will help it to deal with its onerous task? Given that the board is to report directly to the Minister, it appears the Department of Health and Children is out of the equation. I read the document. Where does Mr. Michael Kelly the Secretary General fit in? Is the Department of Health and Children necessary at all?

Deputy McManus mentioned the democratic deficit.

Chairman

Life would be very dull for Deputy Cowley if there was no Department of Health and Children.

Deputy F. O’Malley

The Deputy would lose his seat.

Deputy Cowley

We would appreciate fresh thinking from someone who felt investment was key. People seem to feel the baby has been thrown out with the bath water. From a position of over-representation, we have gone to a position of under-representation. That will need to be addressed. The proposal in this regard has no teeth and it will not be acceptable to anybody. Perhaps we will be left with another quango like the NRA which will further compound the deficit. It should be remembered that when the county councils ran the health boards, a room was needed for all the complaints. Can Mr. Kelly make some observations on the need for a health ombudsman or a surgeon general? Professor Niamh Brennan suggested that the consultant and the general practitioner should be placed centre stage in terms of financial accountability. That has connotations of protected time etc. Where does that recommendation stand at the moment?

There seems to be a level of secrecy about this process. I was interested in Mr. Kelly's response to Deputy McManus who asked for the report. What degree of transparency will there be?

Deputy Neville

I welcome the delegation and its presentation. These are the early days of its work. At what level did the consultations around the country take place? I am from the mid-west, which I am conscious is one of the key areas in the initial stage. What responses were received in the Eastern Regional Health Authority area and in the Mid-Western Health Board area, which perceive themselves as the key pilot areas? The Minister for Health and Children, Deputy Martin, has said the HSE will be accountable and report to him. Its representatives will also appear from time to time before this committee. While we invited the delegation to attend today, what plans does the executive have for future presentations on the basis of the Minister's statement?

What was the reaction of the HSE to its consultation with members of the psychiatric services? What was their response to the role and objectives of the executive? They were scathing in some reports. Representatives attended the committee last week and expressed concern about the implications of the Hanly report for the psychiatric service. They consider that its recommendations are at odds with their view of how the psychiatric services should develop while making no criticism of its implications for the general medical services.

Senator Glynn

Given that nurses and doctors will continue to deliver the service in the same way, is the focus in the implementation of reforms to be entirely on administration and the management structures of the health services? We must focus on the financial input into the services. In a relatively short number of years, the funding allocation for the Department of Health and Children has increased by up to 400% but we continue to have problems. The question arises as to whether or not the problems are financial. According to the vox populi I have heard, many people believe otherwise.

Mr. Kelly referred to the composition of the national health offices, their locations in each region and the manner in which the four regions will be split. What criteria will be applied to the location of the offices? I have had many discussions with the Minister for Health and Children about the democratic deficit. It has caused me great concern. While there have been consultations with the Association of Health Boards, there should be representation for locally elected councillors who represent the conduit through which complaints are channelled to service deliverers. Opinions pertaining to the formulation of policy are also expressed to councillors.

I was amused to hear Deputy McManus refer to the number of health boards as it is not long since it was Labour Party policy to advocate one board. Luckily, that did not come to fruition.

Deputy McManus

I was only a child at the time.

Senator Glynn

It would appear that in some respects the party did not mature. We will leave that issue for another day. One of the objectives of the three tenets is to create a better and more challenging environment. Will Mr. Kelly explain this? Will he also explain what is meant by the reference to the financial input cost to deliver a quality service?

Given that we have thrown money at the health service and continue to have problems in the service, what guarantees do we have - in the absence of a crystal ball, we probably do not have any - that the new approach formulated by the interim Health Service Executive will work? The previous approach did not work and nobody whinged or cried when it was proposed to abolish the health boards.

Mr. Kelly

It is too early to form a view on the areas, if any, of under-investment. The interim Health Service Executive will have no responsibility for capital spending and service delivery until next January but we will examine these matters closely.

I have been surprised by the criticisms levelled at the health service as I have had access to much of the market research on the acute side of the service. As an outsider I have been extremely impressed by the positive nature of the research findings on patients' experience in hospital once they have a bed. The issues touched on by members are accident and emergency services, waiting lists and how one accesses services. According to research, the feedback from patients is very positive once they have access to care.

As regards primary care, I can only repeat my comment that my stance, as somebody new looking at this area, is that it is of critical importance and should receive significant investment. The State would obtain better value for money as a result. It would also take pressure off the acute side and patients and clients would be dealt with in a much more effective manner.

The proposed changes would have major implications for the Department. As I understand the thrust of the reforms, the Department's role will be focused on policy, which will require it to re-organise and downsize. The process of examining the implications of the proposals is under way and the interim Health Service Executive is involved in dialogue with the Department. In terms of its role vis-à-vis us, we work in partnership. We are liaising with the Department on all the areas to which I have referred, particularly those which come within the ambit of the steering committee such as its approach to the Health Information Quality Authority, the streamlining of health agencies and the reorganisation of the Department.

In terms of the democratic deficit, I cannot add to what I have said except to repeat that it is my understanding from my discussions with the Minister that he intends to introduce a process on a regional basis which would allow local concerns and representations to be made to the directors in charge of the regions.

As regards Professor Niamh Brennan's recommendation that financial accountability should extend as far down as the individual consultant level, that is one of 64 recommendations made by her commission. We have a person tracking each of the recommendations as the year progresses but I do not yet know what view we will arrive at. As there are different arguments as to where the cut-off point in terms of financial accountability at consultant level should be, I cannot offer the joint committee a specific answer on this question at this stage.

As regards secrecy, I am puzzled by some of the comments made. There is no hidden agenda and I would be concerned if a secret parallel agenda was suspected. That is not the case. As I stated to Deputy McManus, I will find out what is the status of the composite document and communicate a response to the joint committee.

Deputy McManus

It may not necessarily be a secret document but it has not been published. We are, therefore, on the outside and do not know what is real agenda. The document is unavailable.

Mr. Kelly

There is no agenda. It is a high level, interesting document, which we have read. It contains contradictions and we have, in a sense, put it aside. We are working in a practical manner on how we will implement the key elements of the reforms.

Deputy Cowley asked about our response to communications. I have been trying to meet as many people as possible to allay concerns and address the implications of the proposals for people on the ground. We have had a number of evening sessions with the health boards in all the health board areas at which I or my colleagues speak for ten or 15 minutes followed by a question and answer session. We have found these meetings extremely helpful. Each night the question and answer sessions ran for two hours and had to be cut off. It was a learning experience for us. People gave us their thoughts and practical ideas on the best approach to take. We learned a great deal from the process and will bear in mind the various suggestions as we proceed in our work.

In terms of meeting and having dialogue with the joint committee in future, the interim Health Service Executive would be delighted to appear before the committee at any stage and would welcome the opportunity to keep members updated.

Chairman

I hope that will continue to be Mr. Kelly's position.

Mr. Kelly

I mean that; it is important. As regards psychiatric services, I am currently meeting the representative groups of the various services and have had a number of meetings on the public health side. I spoke in Killarney, on the night before last, at the annual SIPTU nursing conference which focused primarily on psychiatric services. Many of the views expressed by members of the joint committee were also voiced from the floor of the conference. We have to feed into the myriad areas on which concern has been expressed.

I can understand that the impression could emerge that the focus is entirely on administration. There is no point proceeding with a reform process if it is confined to administration because it would be like moving deckchairs around. I return to the three tenets I mentioned earlier. The reforms must over time lead to a better experience for patients and clients. I assure the committee that this is uppermost in our minds and that whatever reorganisation takes place will be geared towards that objective.

I have already discussed the location of the regions. The only reason we are sitting on this matter is that we want to test them on the ground in terms of service delivery to be sure that what has been produced by one of the project groups is practical and makes sense as regards service delivery. I believe I have covered all the questions raised.

Deputy Devins

I join my colleagues in welcoming the delegation from the interim Health Service Executive. We currently have many health boards and we hear there will be four regional or area boards. Has the decision been made as to which health boards will form which area boards?

I am a little confused as to where the HSE fits in as a national body. Will it take over most of the work currently done by health boards or will it play a similar role to that currently played by the Department of Health and Children? Will the new area boards fulfil the function of the individual health boards?

As a GP, one of the things I always valued is that if I had a problem I could telephone somebody I knew who dealt with the matter in the local health board. In that way I could quickly resolve issues. One of the dangers I foresee with the expanded situation, particularly as the HSE is perceived as being Dublin-based, is that intimate contact will be lost. What mechanism will be put in place to prevent that happening?

We were informed that the position of CEO of the HSE was advertised. Will the position be held on a seven year contract basis, as exists elsewhere in the public service or will it be for life?

Deputy F. O’Malley

I warmly welcome the delegation. I wish to dwell on the issue of consultation because in many ways that is the easy bit. Everybody loves to be consulted but at the end of the process they may disagree with the recommendations made. People often mix up consultation with agreement. I am interested to hear what Mr. Cawley has to say about this. Agreement is unlikely in the context of the radical changes proposed to the health system, but it is critical to the development of a better health service.

Patients were correctly put as the first of the three priority areas identified. The staff are a vital ingredient as is a positive working environment. Value for money is also important. Deputy Cowley referred to under-investment, which I took to refer to historical under-investment because that is the problem with the health service. It is unsatisfactory that a threefold increase in budget did not lead to an improved service for patients.

A complete overhaul of the health service is necessary, which is what the Government has embarked upon. Change and reorganisation are vital. Come January, when the executive will be in operation, it is likely that resistance will be a factor, though I do not wish to be pre-emptive. How will the executive deal with that? If people are not open to a changed environment where the patient comes first, how can we look forward to a new and better service?

I do not agree that there is a democratic deficit. I will be delighted when local politicians are removed from health boards because we have accountability through the Oireachtas. One of the most honourable decisions taken by a local representative was that he resigned when he felt himself to be in conflict with the implementation of the smoking ban. That was the right thing to do because he had a conflict of interest. How could he continue in that role in the face of the introduction of the single most important health decision of the Government? Unfortunately, people are not always so honourable.

Chairman

He did not belong to the Deputy's party.

Deputy F. O’Malley

No, he did not. Reference was made to the tracking of recommendations on the various reports. Will that information be available to politicians or the general public?

Deputy O. Mitchell

I apologise for the discourtesy of not being here for the presentation. I always blame traffic, but this time it took a staggering 80 minutes to go seven miles. I hope when the health issue has been sorted out, the delegation can take on the much easier job of sorting out traffic problems.

Everybody has brought up the issue of accountability. We will shortly discuss legislation regarding the disbanding of health boards and the removal of democratic accountability from the system. For at least six months, before the new executive is statutorily in place, it appears decisions will be made behind closed doors and nobody will know what is going on. We all smiled at the naivety of thinking that meetings every now and then at local level between executives in the health service and local representatives would have any meaning whatsoever. Such a process was in place but local health committees were abolished in the early 1990s because they were toothless talking shops and a waste of everybody's time. That is a critical point. If the new system fails it will be because people are outraged that they cannot get information and they do not know what is going on. Strictly speaking, it is not the job of the executive to that. Although they have been criticised, health boards met in public every month. To the extent that anyone knew what was going on, people were informed and questions could be asked in public. Will meetings of the executive be held in public?

We are all consumed with the necessity for value for money. We are spending €11 billion this year and it will be nearly €12 billion next year. Without value for money the whole service will come tumbling down.

What is the obsession with centralising services? Why are we getting rid of decision making at local level? Do we have any reason to believe that a soviet-like administration where everything is centralised, State controlled, State provided and operated from the centre will necessarily be more streamlined and more efficient than what we currently have? The trend everywhere else is towards devolving to local decision makers, having local budget holders, breaking up organisations like Aer Rianta, Aer Lingus - we are not breaking up Aer Lingus, we are getting rid of it - CIE and the VHI. I do not think the VHI wants to hear talk of that happening. That is the trend in all of the State bodies, yet we are going the other way. Is it necessarily going to be more efficient?

I presume the streamlined Department of the future will be the policymaker and the executive will implement policy. We currently have a great policy on primary care but no money is ever spent on it. There is not always a connection between policy and budgets. Will the executive be able to establish policy priorities through the control of budgets or will the budget come to the executive as it often does to local authorities with a label to the effect that it can only be spent on one thing or another? I would like to see more money being spent on health care demand reducing measures like real investment in primary care. Do executive members think they will have that type of capability?

I understand from Deputy Neville that Mr. Kelly said the Hanly proposals would be on hold pending the renegotiation of contracts with the consultants. Clearly, this will not happen by August. What implication does this have for the introduction of the European working time directive, which is due to come into effect in August?

Chairman

What is the position on the ring-fencing of funding, particularly for mental health? There is a demand in the acute hospitals for money, and this has been ploughed into them to the detriment of the delivery of mental health services and community services, for example. What guarantee can the delegation give that there will be ring-fenced funding for such services?

Mr. Kelly

On the structures, the HSE will be the organisation running the service. There will be three key elements, the national hospitals office, the primary, community and continuing care directorate and the national shared services centre. Beneath these there will be four regions reporting to what is called the PCCC side. Additionally, there will be offices at local level in each county. There will still be opportunities to engage in dialogue, to which the Member referred, at county level.

We are in discussion with the Department of Finance on the contract of the chief executive officer and we have to finalise the number of years for which it will be valid. It will not be a job for life but will be on a contract basis.

On the issue of resistance, we are engaged in discussions at national partnership level and with individual unions. The scale of the changes will be very significant. We are talking about drawing up protocols as to how we will manage the consultation and, I hope, avoid serious conflict later in the year as clarity is achieved on the impact of the structures. It would be naive to say, even at this stage, that the consultations are going extremely well. There are differing points of view. We are focusing on the problem very early to try to put ourselves in a position where meaningful dialogue will be possible and so we will be able to implement the changes without disrupting services.

We are tracking the many recommendations of the Brennan commission and we will outline our views. We will accept further invitations from the committee to discuss any points it wants to ask us about in this regard. We will outline our thinking exactly and state why we have not implemented the recommendations.

I am not concerned about the gap of six months. From 1 July the chief executive officers will be responsible for the service contract and will report to the Department. It is intended that the board will not meet in public. However, we are open to whatever means of communication the committee desires.

On whether we are centralising too much, there is considerable fragmentation on the ground which is getting in the way of better service delivery. We will have failed if we create a centralised system that is just a bureaucracy. We are very conscious of that and will not create such a system. The 11 boards and authorities and all the agencies are getting in the way of proper service delivery. I believe - I might be proved to be naive on this point but I hope I will be proved correct - we will produce a better service that is more streamlined and not bureaucratic. The most important decision the board of the interim Health Service Executive will make over the next few months will be on recruitment of the chief executive and the directors for all the positions I mentioned. The values these people have and how they perceive the service will be critical. We are determined to recruit people who understand the concept of service and the concepts of the delivery system.

Chairman

We must adjourn because there is a vote in the Dáil.

Sitting suspended at 10.45 a.m. and resumed at 11.05 a.m.

Mr. Kelly

I mentioned the perception of an obsession with centralisation. I assure the committee that this will not happen. Earlier I said that the most important decision to be made by the HSE over the next few months will be the recruitment of the chief executive and the second layer of staff. The qualities and values of these people will be critically important. We will not be seeking people who have an obsession with centralisation and control. Their value systems will be taken into account.

We have no involvement in the policy on budgeting at this point. I reiterate, however, that as somebody new in the area my sense is that investment in the primary care side in the long term is the most important matter. From the point of view of patients, this will create a better environment, but it will also take pressure off acute services if we get it right. I am speaking off the top of my head, but when we take responsibility for the service plan that is something we will be considering closely.

Deputy Olivia Mitchell asked about the Hanly report and the European working time directive. The Taoiseach has said that it is unlikely our hospitals will be fully compliant by August. At this time people are travelling from hospital to hospital assessing their projected compliance. I was in a hospital last week that has a compliance rate of 80%. As has been mentioned by our own Minister, by August the average could be around 60%. It is an important issue. People are assessing the situation on the ground and deciding the best way to ensure we are compliant as quickly as possible.

Deputy O. Mitchell

Could Mr. Kelly clarify what he means by 60%?

Mr. Kelly

I am talking about hospitals being 60% compliant with the directive.

The Deputy raised the issue of ring-fencing the acute, mental health and community sectors. I have dealt with that. The primary community and continuing care side of things is just as important, if not more important in the long term.

Deputy O. Mitchell

I am not particularly in favour of ring-fencing. I was talking about having the capability to decide where one's priorities are.

Chairman

The trouble in the past has been in determining where priorities are. They were always on the acute side because that is the area most under pressure. Money was diverted into this area from other sectors. We would prefer if this did not continue.

Mr. Kelly

I visited a few of the 11 community pilots to which I referred and I have become uncomfortable with how much money has been allocated even to these. We must consider this.

Deputy Cowley

I wish the service luck. Taking a cynical attitude - I hope I am proven wrong - I suggest that the whole impetus for this is financial, based on the Hanly report. There was always the suspicion that if the Hanly report was ever implemented - which it will not now be, as I said on the day it was released——

Chairman

I did not hear that.

Deputy Cowley

It is dead in the water, as Mr. Kelly has confirmed. The fear was that the implementation would involve taking away local services and not putting anything back. This may still happen if the report is ever implemented, which it will not be.

I recognise that value for money was at the bottom of Mr. Kelly's list but I am still afraid it is all about money. Mr. Kelly comes from a business background. I disagree with Deputy O'Malley in the matter of capacity. There is still underinvestment. The system needs 3,000 more beds.

Deputy Devins

Which health boards will be formed in which area? Has that been decided?

Mr. Kelly

That has not yet been decided. A draft paper was prepared on the basis of one of the project groups but we are sitting on it until we analyse matters on the ground.

Deputy O. Mitchell

Could I ask——

Chairman

Unfortunately, we will have to finish as there is a vote in the Dáil.

Mr. Kelly

To clarify, I did not say Hanly was dead.

Deputy F. O’Malley

We know Mr. Kelly did not say that.

Chairman

We were hearing only what we wanted to hear.

Deputy Cowley

I think he said it was on hold.

Chairman

I thank the representatives for coming. This has been a very informative meeting. Some of them will return, as many other questions will arise as time goes by. We look forward to seeing them again and wish them the best of luck with a difficult task.

The joint committee adjourned at 11.10 a.m. until 9.30 a.m. on Thursday, 13 May 2004.