I propose in the first place to say a few words about the resources which will be available for health services this year and in the period to 1987 and on the planning framework for the health services which is contained in the National plan.
As regards the current year the position is that no extra funds can be provided for health services by way of a Supplementary Estimate. This situation cannot be changed.
With regard to future years the non-capital provision for 1985 will be £1,019 million. The provision for 1986 will be £1,078 million and the provision for 1987 will be £1,123 million. The expenditure by health agencies cannot exceed the levels which these allocations will support. These are substantial expenditure levels bearing in mind that in 1973/74 net non-capital expenditure on health services amounted to about £143 million, representing about 5.2 per cent of GNP. In the current year expenditure is estimated at £1,087 million, representing about 7.5 per cent of GNP. In other words, relative to our national wealth, expressed by GNP we are spending almost 50 per cent more in real terms on day to day health services provision now than we were spending ten years ago.
One important advantage in the present situation as compared with previous years is that we know with certainty what resources will be available up to and including 1987. Despite inherent difficulties this is certainly a step forward in the advance planning process.
This has undoubtedly been a difficult year as regards the management and provision of health services. In the aftermath of a decade and more which had witnessed a steady, sustained and unparalleled growth in the level of financial and personnel resources made available to the health services, the urgent need to control the levels of public expenditure has meant that the resources available to the health services have had to be limited, in line with the overall budgetary limits on public expenditure.
It would be unrealistic to expect that in a situation which called for curbs in the growth of public expenditure generally, the health services which absorb almost 20 per cent of overall public expenditure could be exempted from the requirement to secure reductions in costs. The situation required immediate action to identify and implement measures to secure alignment of expenditure with allocation levels. I am glad to say that in general health agencies responded in a most co-operative way and, by various strategies, succeeded in reducing costs substantially.
Despite the efforts of the various health agencies, however, it now seems likely that a number of health agencies will exceed their 1984 allocations. The outlook for 1985 would be considerably improved if overruns in 1984 could be eliminated or minimised. Clearly there is still some way to go before expenditure is brought into line with what can be afforded and, to do that, it is clear that all concerned will have to work together in a more planned, purposeful and coordinated way.
Of course the application of restraint to any programme of health expenditure is a difficult process to carry through, particularly so when the need for constraint follows after a period of steady, sustained growth in expenditure and personnel as has been the experience in the health services. The motion before the House perhaps unwittingly highlights the dilemma inherent in attempting to satisfy an insatiable demand for yet more and more increasingly cost intensive services while at the same time grappling with the reality of cash limits and financial boundaries in the real world. The reality of financial boundaries must be faced. Options have to be selected and real choices have to be made.
It is strange that some wish us to increase health expenditure in cash terms ad infinitum, with little or no regard to the taxation resources base from which services must at the end of the day be funded. The major problem inherent in the constantly escalating cost of delivery of any given volume of health services is one that simply must be faced, tackled and, if possible, overcome. Although spending on health services, in real terms, has roughly doubled in the last decade or so, no one will seriously attempt to argue that the population are twice as healthy now as they were at the beginning of the decade. Senator Robb correctly pointed out that it does not follow that an increase in the resources provided for health care will result in a healthier people. This and the absolutely essential overall need to control public expenditure within a planned framework impelled the Government to include in the national plan specific allocations for health services for each of the years 1985 to 1987 as well as certain decisions as regards where costs should be reduced and some planning guidelines.
There are three points stressed in the plan in relation to approach and attitudes which are worth mentioning:
(i) First, wherever possible and justifiable, Government assistance in the social area should become more specific and more carefully aimed at, and delivered to, the poor and underprivileged — those in need — instead of using generalised measures which provide help to the better-off, who do not need it, as well as to the poor. (Para. 5.14).
(ii) Second, all possible measures must be taken to increase the efficiency and cost-effectiveness of the administration of the social services. (Para. 5.15).
(iii) Third, it is important that everyone in the community — whether those in the public sector administering the social services, or the recipients of the services, or all taxpayers financing the services — should be prepared to accept changes over the years. The needs of the country have changed greatly in the last decade so that the range of social services and the way in which they are provided must also change. We must all be prepared to accept a reduction in, and even abandonment of, established services and structures which are no longer appropriate to current needs or requirements, so as to enable an efficient and streamlined system to provide economically for the needs of the future. (Para. 5.16).
In relation to the health services, a number of tasks have been highlighted. These might be summarised as follows:
(i) Promote health (a task which involves many Departments and agencies) and prevent illness. (Para. 5.34).
— I might point out that already the Government have provided tangible evidence of their intention to develop health promotional campaigns by allocating an extra £½ million to the Health Education Bureau in 1985 —
(ii) Wherever possible (provided it is cost-effective) provide services on a community or out-patient basis; in the medium to long-term bring about a redistribution away from institutional services. (Paras. 5.35-5.37).
(iii) Make necessary in-patient care available to all; improve efficiency and cost-effectiveness by closures of outmoded or non-essential facilities and by improvement of information systems. (Para. 5.38).
(iv) Maintain a range of care and support (welfare) services, with particular reference to children at risk, low income groups not availing of services, and the disabled. (Para. 5.39).
(v) Continue to improve efficiency. (Paras. 5.45-5.48).
We must also take account of the objectives and targets which have arisen or will arise out of recent or pending reviews of aspects of the health services, for example:
— review of organisations of community care;
— report of working party on GMS;
— review of psychiatric services;
— review of mental handicap services;
— implementation of the Green Paper on the Disabled;
— review of the public health nursing service;
— implementation of systems policy and programme;
— implementation of Children and Adoption Bills.
These reviews will lead to a more rational and effective use of resources.
As I have already mentioned, the revenue Exchequer allocations for each of the three years have been determined at £1,019 million in 1985, £1,078 million in 1986 and £1,123 million in 1987. The expenditure on health services must be aligned with these allocations. The allocations take into account the specific measures incorporated in the national plan and the Government decisions associated with it. The main features include the following:
(i) Specific decisions in relation to pay budgets.
(ii) Any excess expenditure over budget in 1984, or, indeed, subsequent years, must be absorbed.
(iii) Private and semi-private in-patient charges will be increased to realise about £4.6 million additional income in 1985.
(iv) A contribution of about £1.4 million in 1985 is to be secured from hospital consultants in respect of the use of public facilities for private practice.
(v) Savings on drugs expenditure in the GMS of £2 million are to be achieved in 1985.
(vi) The Government have decided that, throughout 1985, the arrangements where by two-third of vacancies occuring in the Civil Service — excluding vacancies arising from career breaks — are held open will continue in force and that measures at least equivalent in effect in terms of the numbers of posts, which must remain unfilled and/or their pay costs, are to be applied in health agencies.
In spite of the constraints affecting public spending generally the Government have allocated funds for the following specific purpose in the health services:
—a sum of £2.5 million has been set aside in each of the three years for improvements in community services; as I have already mentioned £½ million of this is being made available in 1985 to the Health Education Bureau for health promotion purposes;
—a similar provision has been made to enable a limited number of new units of accommodation to be commissioned.
I am under no illusions as to the magnitude of the task which we face. If there were not any overruns in 1984 our task would be considerably easier. The position in respect of the two subsequent years will not be quite so difficult provived the budget allocations for 1985 are adhered to in full.
We obviously need to have a clear strategy, a detailed plan, and arrangements for implementation which will be capable of being closely monitored and adapted, as circumstances require.
In this regard, every major health agency has been requested to formulate a comprehensive plan setting out in detail the precise actions which the management of that agency feels will have to be taken in order to ensure that the agency concerned will firstly live within the framework of its financial allocation and that, secondly, the local plan prepared by individual agencies reflects the general philosophy and intent and specific decisions of the national plan. This will place a much greater emphasis on the managerial capacity of those who are charged with administering and managing the health services at local level. There have been some disparaging remarks made about the emphasis that the Minister has placed on the responsibility of health boards in particular to manage their services effectively and efficiently within the framework of the financial allocations made available. These criticisms overlook the fact that the delegation of very substantial responsibilities to the health boards was one of the foundation stones of the regionalisation structure which was established in 1970.
Obviously in drawing up their action plans, health agencies will be examining all areas of expenditure in order to identify opportunities for reducing costs. Some of the obvious areas which must be looked at include, reducing the level of admissions to hospitals and institutions. A more rigorous admission and casualty department policy is needed in general hospitals to ensure that patients who can be treated in the community are not admitted to or treated in hospitals.
Secondly, surplus institutional facilities should be identified and closed. This is a very difficult issue. But it would be foolish to allow the quality of service in essential facilities to be threatened while resources are wasted in maintaining facilities that can well be done without.
Thirdly, careful and detailed consideration should be given to changes in the role/use of certain in-patient facilities. A number of approaches could be envisaged under this heading. Indeed, when the Minister for Health recently met, in County Kildare, the chairmen and the chief executive officers of health boards and indicated some of the things that I am now going to mention, they were, of course, used for political purposes at local level by a certain number of chairmen who were there. Various combinations of the following actions might be taken:
(i) reduce the number of seven-day in-patient beds;
(ii) reduce seven-day beds to five-day beds;
What we mean by that is: why keep a patient in hospital over the week-end if he is due for discharge and could be examined on Friday and allowed home?
(iii) increase use of out-patient facilities;
(iv) convert small hospital to health centre/hostel/day activity centre;
(v) redeploy or retrain staff for work in their existing institution or in another institution or in the community.
Senator Honan in the course of her remarks ridiculed the notion of five-day beds. The point is that all beds need not be manned on a seven-day, 24-hour a day basis, because many patients can be dealt with to finality within a period of five days. I have previously elaborated on that.
Fourthly, we have to reduce expenditure on pay. The actions taken in relation to the closure or change of use of hospitals could contribute under this heading. In addition, action could be taken under various other combinations. For example, we need to examine very carefully the extent to which we can:
(i) Maximise non-filling of vacant posts, consistent with maintenance of agreed standards of service.
(ii) Reduce locum cover. Prima facie, there are wide variations between boards in the extent to which savings are being achieved under this heading.
(iii) Restructure rosters to improve efficiency. There is insufficient information available to enable an assessment to be made of the potential savings under this heading. However, it is an option that should be quickly examined and the implications of change fully assessed.
(iv) Introduce permanent, part time staff. This would enable a more flexible approach to rostering and would enable staff to be concentrated on the work at the busiest times. This suggestion is already being examined in the Department as an alternative to widespread job sharing.
(v) Reduce the volume of premium pay. The key question is to what extent we can run our hospital services on a five or six day week basis. The rostering of staffs on Sunday is particularly expensive.
In the area of improving efficiency the Department of Health, with the cooperation of health agencies, have already carried out a number of studies. In the general hospital sector these have ranged over purchasing, heating/lighting, housekeeping and transport. Further cost efficiency studies are now being undertaken in the area of hospital admissions policy, the excessive use of hospital laboratory services and, arising from these studies, an examination is underway into the potential of five day wards and indeed day-beds as a real alternative to traditional practice for the many persons who do not require total continuous hospitalisation but yet who find themselves subject to long and inconvenient stays in hospital at present.
These new initiatives are not an academic exercise. The findings which emerge will be of considerable significance for the future of the services. Already, useful and practical recommendations have emerged from these types of studies and have been communicated to the executive agencies in terms of principles of good practice.
In the course of the debate reference was made to the disparity between costs in similar hospitals. In the area of comparative costing the Department have made available to various hospitals data as to how they compare with similar hospitals as regards costs and prices etc. This type of information will — I hope — help agencies to identify particular areas of weakness in their own operations as regards financial performance. It is also intended to develop and to refine these comparative cost data as an integral part of the accelerated movement towards greater value for money in the health services.
It is absolutely essential, in addition, that there be readily available detailed information and data on the financial consequences of decisions taken by the medical profession. We need to identify clearly the expenditure involved in treating individual patients and specified categories of patient, categorised by specialty or otherwise.
The new management information systems currently coming on stream, will be extremely useful in this regard by providing ample opportunity and scope for the introduction of much more sophisticated costing systems.
As I have already stated, the successful implementation of the national plan requires a co-ordinated, planned approach to the management of the service as a whole and tremendous co-operation among all parts of the service. It will not be enough for each agency to allocate the available funds between programmes, even if these allocations accurately reflect the philosophy, intent and decisions of the plan. Clearly, in the light of previous experience and having regard to the multiplicity of fronts on which the problems must be tackled, a detailed plan must be drawn up by each health board and agency, setting out in sufficient detail the precise actions which have to be taken in order to ensure that the level of expenditure is brought into line with the approved allocations. The decisions required to do this will have to be taken quickly. After all, the biggest challenge arises in 1985. As I have already mentioned, the major health agencies have been asked to produce plans on these lines.
Over the next month or so, therefore, the concentration must be on achieving three things. First, it will be necessary for each agency to draw up a realistic action plan setting out how it proposes to ensure that its expenditure in 1985 will be in line with the approved allocation, taking full account of the liability arising from any excess expenditure incurred in 1984. Secondly, in the case of health boards the available funds must be distributed between programmes to reflect the assumption made in the action plan and the policies for health set out in the national plan.
I am fully aware that all of this and the continuing effort through the period of the plan will place a great strain on health agencies and their staffs. Nevertheless, I am sure that most people will welcome a situation in which we now clearly know what has to be achieved over the next three years. What must be faced up to is the need to set real priorities in the provision of health services. This has become much more pressing than was previously the case. Here again the national plan sets out a clear framework for the development of the necessary strategy. In a nutshell, we will have to become much more selective in focusing and in targetting the aims of public expenditure generally, and this argument applies to the health services with a particular force. The most vulnerable groups will have to be protected and services for these groups in particular will need further development. Given the fact that the financing of our health services must be funded within a ceiling of fixed cash limits over the next few years, a reallocation of resources is now called for. I am confident that with the co-operation of all concerned the difficulties which will inevitably arise can be overcome and that the financial and planning targets set out in the national plan will be achieved.
In the time at my disposal I am unable to deal in detail — I certainly would not want to prevent Senator Killilea from making his contribution — with the points raised in the course of the debate on the motion before the House. Nothing that has been said provides any real evidence of a disimprovement in the standards of essential services. Indeed, despite the chorus of criticisms, the financial restraints which have had to be applied to the health services in recent times have been absorbed without any serious impact on the structure and volume of essential services. It has been acknowledged that despite the expenditure limitations we have excellent health services. We intend to ensure that within the framework of the national plan, the essential fabric of the health services will be maintained.
The motion implies that the Minister is not as concerned as he should be about maintaining the level and quality of health care. This is scarcely to be taken seriously. The Minister has demonstrated that he is totally committed to strengthening and improving the health services on the basis of the substantial resources allocated for the services in the period to 1987. It would be naive to think that difficulties will not arise, but the Minister is confident that if all concerned work together in a constructive manner these difficulties can be overcome. Accordingly, I consider that the motion is inappropriate and should be rejected.
