With my colleagues, the Ministers of State, Deputies Kathleen Lynch and Shortall, I look forward to responding to members' questions and having a valuable discussion on the health services. As ever, I am sure that there will be good exchanges that will help to inform those members of the public who can view these meetings on the web. The Minister of State, Deputy Kathleen Lynch, is in the Dáil Chamber and will join us at approximately noon.
As members are well aware, the health service and health policy has particular relevance for every citizen, be that citizen adult or child, male or female and wherever and in whatever circumstances he or she lives. Therefore, it is no surprise that the Government is fully committed not just to more efficient ways of delivering services, but to a fundamental reform of the health service. This was never going to be an easy task. The Government is implementing major reforms and introducing initiatives to improve the quality of the service at a time when our nation is the most economically challenged it has ever been. Since I took up office, €1.75 billion has needed to be taken from the health budget and 6,000 staff have left it. The health budget has been reduced by €2.5 billion during the past three years.
Unfortunately, we are still far from out of the woods in a financial sense. The health services will be expected to make further substantial reductions to help to bring the national finances under control. We cannot stand still in the face of increasing demands for services when at the same time resources must be severely curtailed. The health sector is facing significant financial challenges in 2012 and 2013, which I am sure Mr. Magee will address. The HSE's national service plan was prepared in the context of the challenges faced by the health services this year in terms of reduced staffing levels and budgets, combined with an increasing demand for services. It also took account of additional funding being invested this year in areas such as mental health services, primary care, the national clinical care programmes and children's services.
Along with the structural changes being implemented, the budget reductions are posing a serious financial challenge to the HSE and the executive is reporting a deficit in Vote terms of €169 million at the end of May. Based on the current rate of cash drawdown on the Vote, it is projected that there will be a deficit of between €450 million and €500 million in 2012. The HSE has set out a number of measures to address this emerging financial situation. These include requiring hospitals to bring activity levels back in line with targets set out in the national service plan, reducing the use of agency staff and implementing reforms under the Croke Park agreement to achieve the most cost effective use of human resources. In addition, my Department is assessing a range of cost containment proposals recently submitted by the HSE.
During the next few years, the Government will re-organise the health system to provide access based on need rather than income, underpinned by a strengthened primary care sector, a restructured hospital sector and a more transparent "money follows the patient" system of funding. We have already made good progress in the past year in driving change. The special delivery unity, SDU, which was established this time last year, is focusing on throughput of patients, reducing length of stay to international norms and having as many procedures as possible carried out as day cases. It has also ensured that we have same day data on trolley wait times, which enables problems to be identified early and immediate interventions to be applied. This is crucial. It is a question of having timely information to make decisions. Previously, we used information that was months or sometimes years out of date and not of much value. We need real-time information. I have informed the committee of problems in the past. Since a trolley count is now done at 8 a.m., 2 p.m. and 4 p.m., we are able to take action to avoid large numbers of people needing to wait on trolleys. Mr. Tony O'Brien has a chart that shows the number of people on trolleys in emergency departments for the first five months of this year as compared with the same period last year. Real, measurable progress is evident.
Despite the 6,000 people who have left the service since March 2011 and the money that has been removed from the health service, we have not only managed to maintain services, but to improve them as well. However, this is just progress and there remains a long way to go. It may seem daunting. I wish to thank every person in the SDU, in the clinical programmes and, in particular, on the front line for their great work, flexibility and innovation. This effort has not just enabled us to maintain a safe service, but to improve it. Large challenges remain and we do not doubt the ongoing need to work on ways of addressing them. Even if we were not in this financial situation, we would need to change the way in which we deliver care. Health consumes every cent and euro that we raise in income tax. We have a duty of care to the taxpayer as well as to the service's users.
The development of the clinical care programmes is defining the ideal care for patients that can then be implemented across the country, focusing on solutions that will improve the quality of patient care, improve access and save money. Other pressures intensify the scale of the challenges facing us. In the area of health determinants, lifestyle factors such as smoking, drinking and obesity continue to be issues of growing concern and have the potential to jeopardise many of the health gains achieved in recent years. The demands for high quality, accessible health care will not diminish in the years to come. The increasingly ageing population, with all that it implies in terms of health and social care needs, and the cost of provision make this a certainty, not a prediction.
Health requirements will increase to unsustainable levels unless urgent action is taken to address chronic disease. The new programmes will provide structured and integrated care for patients with long-term chronic conditions. This will mean treating patients at the lowest level of complexity and providing quality services at the lowest possible cost. Up to 95% of day-to-day health and social care needs can be met in the primary care setting. During the lifetime of the programme for Government, there will be a significant strengthening of the primary care sector, which will ultimately deliver universal primary care, with the removal of cost as a barrier to access. In parallel, work is advancing on the radical reform of the acute hospital sector through initiatives such as the SDU, the introduction of what is termed a "money follows the patient" funding model and the creation of independent not-for-profit hospital trusts.
We must stop paying lip-service to prevention and start paying for it. This is a societal issue, not just a health one. It involves the Departments of Education and Skills and Children and Youth Affairs. The three Departments involved have appointed a principal officer to address this issue. This issue also involves the Department of Justice and Equality in terms of having a safe environment in which to take exercise and the Department of the Environment, Community and Local Government in terms of providing safe, well-lit places in which to take exercise or public transport as opposed to relying on cars. A great deal of work must be done across the Departments. We are keen on seeing coherent, joined-up government during this Government's lifetime. We must address what is becoming an obesity and diabetic epidemic. If we do not take action, we may be the first generation to bury the generation following us. It is a horrible thought.
Other moves towards the implementation of universal health insurance will see important reforms in private health insurance, including the establishment of a new risk equalisation scheme, the restructuring of the private health insurance market and the implementation of changes to VHI as a result of the judgment by the European Court of Justice. We must keep the health insurance market as competitive and affordable as possible as we move towards a new system of universal health insurance.
We are attempting to achieve significant health service reforms at a time when overall resources are decreasing. To meet unavoidable pressures and Government commitments, maximum compliance with and flexibility under the terms of the Croke Park agreement must be achieved. At the end of last year, the Government published its comprehensive expenditure report for 2012 to 2014. In the report, the Government indicated that further savings of €1 billion in current health expenditure would be required. These targets include €350 million in nominal savings and approximately €500 million to fund unavoidable pressures, particularly in the area of community drugs schemes, additional superannuation costs and the fair deal nursing home scheme. A further €270 million in savings were identified to provide for investment to meet commitments in the programme for Government to develop services in the areas of mental health and primary care.
New and creative ways of working, the elimination of waste and optimal streamlining of our systems and processes will all be needed alongside the planned major structural reform of our health system. Significant work is being done to plan the pace and sequencing of the extensive changes required and to clarify the shape of the system that will result when the programme of change is delivered.
Our health services are essential to the functioning of our society. Our citizens expect and demand a modern, high quality, safe single-tier health service which guarantees access to care based on need, not on ability to pay. Our citizens expect a health service that is continually evolving and improving and delivering services more efficiently, more effectively and with fewer staff. It is the intention of the Government to provide such a health service for current and future generations.
I would like to inform the committee that the Employment, Social Policy, Health and Consumer Affairs Council will meet on 21 and 22 June. There are a number of important issues on the agenda and I have dealt with those.
We have talked about the situation with regard to health insurance. What insurers looking at our market want is certainty. By developing the risk equalisation scheme we published and which will be introduced in a Bill and legislated for in the autumn, we have given them that certainty. Consequently, we have the interest of a fourth participant in that market. I believe with that level of competition-----
