I am pleased to have this opportunity to bring the Supplementary Health Estimate before the Select Committee on Health and Children. The annual Estimates are the basis for funding health agencies in any one year. This gives agencies a proper indication regarding funding for the year and allows them to plan the services to be delivered with this funding. However, there are issues which will arise during the year which cannot be planned for and a number of these are provided for in today's Supplementary Estimate.
The gross additional requirement in this Estimate is for £158.5 million. This figure is partially offset by additional appropriations in aid of £47 million which gives a net figure of £111.5 million. Some £500,000 of the total requirement is for capital spending and the remainder is non-capital.
The Supplementary Estimate also takes account of the fact that a total of almost £5 million funding in the areas of the Irish Medicines Board, the North-South Food Safety Promotion Board, home helps' pay, the Springboard Initiative for children at risk, and health insurance consultancies will not now be required in the current year. I assure the select committee that the necessary funding will be made available for all these agencies in 2001.
Following the dissolution of the National Rehabilitation Board in June this year, my Department will surrender £18 million to the Department of Finance, which is the element of funding no longer required by this Department. This funding will in turn be transferred by way of Supplementary Estimate to the relevant Departments, namely, the Department of Enterprise, Trade and Employment, the Department of Justice, Equality and Law Reform and the Department of Social, Community and Family Affairs. These are the parent Departments for the organisations established to provide services formerly provided by the NRB.
The additional moneys sought are necessary in order to fund adequately a number of items within the health service, which have given rise to additional expenditure. A number of the items for which funding is sought relate to areas where there is an inevitable degree of uncertainty in forecasting the actual costs in any one year, and, consequently, the original Estimates may not provide fully for these costs. The agreed practice has been to seek supplementary funding in these areas when the actual amount needed becomes apparent during the year. The items recognised by the Department of Finance as falling within this category are medical indemnity insurance, superannuation costs, PRSI costs, demand-led schemes and the general medical service payments board, which consists of the community drugs scheme and certain capitation payments, such as the domiciliary care allowance. That these items would be finalised through the Supplementary Estimate in the context of expenditure trends in the year to date is of very significant benefit to health agencies in managing the remainder of expenditure within the level agreed at the start of the year.
Expenditure in these demand-led items is influenced by a number of factors which are difficult to predict in advance. The cost of providing medical indemnity cover for doctors working in hospitals continues to be of concern. The increasing frequency of claims and the growth in the size of awards, plus the associated legal costs, inevitably feed through in the form of increased insurance and indemnity costs. In August my Department circulated to all relevant parties a briefing paper containing proposals for major change in the area.
In future, indemnity cover for doctors will be provided on the basis of enterprise liability, whereby hospitals and health boards will assume vicarious liability for the actions of their medical staff, as they do for their other staff at present. This change should result in significant economies through the rationalisation of the existing fragmented insurance covers. It should also eliminate the need for separate legal representation for the multiple parties on the defence side in personal injury claims. Most importantly, it will facilitate the introduction of comprehensive clinical risk management programmes in Irish hospitals. This step is critical if we are to reduce the number of incidents which give rise to claims. Such systems have a major role to play in improving patient safety. Additional funding of £1.3 million is required for this area.
The additional superannuation costs for which funding is sought are due to the age profile of personnel in the health sector. Agencies are experiencing increasing numbers of retirements, including those opting for early retirement, and a consequent increase in the yearly budget provision is required. A sum of over £14 million in additional funding is required.
In relation to PRSI, modified social insurance status does not apply to workers recruited into the public service after 6 April 1995. This means that health agencies experience increased costs in respect of employers' PRSI contributions when recruiting such employees to replace existing staff. This item requires additional funding of almost £5.4 million.
Expenditure on the community drug schemes is a factor of the number and cost of claims under these schemes which, again, is difficult to predict in advance. As Deputies will be aware, there is a statutory right to relief for expenditure on prescribed drugs and medicines in excess of the expenditure thresholds which are laid down. There is an additional requirement of just over £41 million in respect of these schemes. Of this, £12 million is required in respect of 1999 costs.
An additional £21.75 million is sought to meet the costs of the general medical services, the GMS. The costs of the GMS, especially the costs of providing prescription drugs and medicines, have increased considerably in recent years and have proved to be greater than that provided in the annual Estimates. An amount of £10 million is in respect of speeding up the payments due to pharmacists through the development of electronic transfer arrangements and is a once off cost. The remaining funding is for the increased demand within the schemes.
A sum of almost £4 million is sought in respect of recombinant blood products. These are clotting factor products used in the treatment of haemophilia. Expenditure in this area can be particularly unpredictable since in certain circumstances very intensive treatment of a patient is required involving the administration of high doses of what are very expensive products. The introduction of these products in recent years has been based on expert clinical opinion as to their greater efficacy over alternative treatments. The increase in expenditure during this year arises from an increase in usage and an increase in the price of these products.
An additional total sum of £19.5 million is required in 2000 to meet the costs associated with the two independent tribunals provided for in my Department's Vote - the hepatitis C and HIV tribunals. The need for this additional funding arises from significant increases in the average amount awarded, the cost of appeals to the High Court and the variety and complexity of the issues being examined.
The issue of organ retention has resulted in significant costs, primarily for the children's hospitals and maternity hospitals. Additional clerical staff were required to deal with inquiries; pathology and social workers are working additional hours, and communication with parents and media have given rise to additional unplanned expenditure. A sum of £2 million is required to meet those costs.
The Eastern Regional Health Authority has been discussing with my Department capital proposals relating to the provision of a range of new facilities in the non-acute hospital sector for the Dublin area. Additional funding of £500,000 is being provided in the current year towards the costs of these facilities. It is intended that the bulk of the costs for this project will be met from the overall NDP funding available to the authority from 2001 onwards.
A sum of £5.5 million is included in this Supplementary Estimate to cover the cost in the current year of contracting at least 500 additional nursing home places and also to allow for the purchase of medical aids and appliances for older people. A major factor affecting the ability of hospitals to provide beds for patients over the winter period is the high number of acute beds which are inappropriately occupied by patients who have completed the acute phase of their illness. Many of these patients are in the older age category and require a further level of care in a more appropriate environment. These 500 places are being made available to patients from public hospitals who have completed the acute phase of their treatment in general hospitals and who require to be cared for in a less acute setting.
Additional management resources have also been provided to enable health boards to manage this initiative to ensure the optimum use of the contracted places. A sum of £4 million is required to meet the cost in the current year of the contracted places and management infrastructure. A sum of £1.5 million is included for the purpose of medical aids and appliances for older people. The set of measures which I have taken as part of the winter initiative should go a considerable distance in helping to alleviate service pressures in the acute hospital sector, especially in ensuring that hospital beds are more readily available for people who require acute treatment.
An amount of £5 million is being provided to fund a range of projects on a once-off basis. In the main this funding will be given to voluntary organisations towards the cost of projects which, due to the limited funding available, will not receive grants from the Department of Health and Children allocation of national lottery funds. These projects cover a range of issues, including the replacement of transport, refurbishment of premises and upgrading of facilities.
My Department, the Health Services Employers Agency and the Irish Medical Organisation have reached an agreement on all the major concerns of non-consultant hospital doctors. The proposals include a very significant improvement in the overtime rates paid to NCHDs. In addition, a senior manager is to be appointed in each major hospital with specific responsibility to manage NCHD hours. A concerted effort is to be made to improve the working conditions and to reduce NCHD working hours, with particular attention to long periods of continuous duty. There is also a multi-million pound training package to be put in place. This will allow doctors in training in Ireland to participate in further training programmes, attend conferences and courses and further their medical training.
Some of the issues which affect NCHDs' working conditions cannot be resolved immediately. Among these are the twin issues of working hours and the restructuring of the medical career hierarchy. The working hours of NCHDs have been the subject of negotiations at European level in the context of the proposed extension of the EU Directive on Working Time to doctors in training. Ireland has always stated that it will reduce junior doctors' working hours to an average of 48 per week at least as quickly as required by any EU directives. Additional funding of £36.8 million is sought for this element this year.
The major new nursing recruitment and retention initiative, which I launched last Wednesday, is aimed at addressing the current shortage of nurses and midwives. The initiative has three objectives, first, to attract nurses and midwives who have left the system back into it, second, to retain nurses and midwives in the public health service and, third, to address the need for more nurses in specialised areas of clinical practice. It is a shared objective of the Government, health service employers and the nursing unions that we have sufficient nurses and midwives to staff our health services now and into the future. I am confident this latest initiative represents a further important step along the road to achieving that objective.
Following from the Buckley report, a number of retired hospital consultants, who retired prior to 1991, felt that they should have received pension benefits equivalent to 50% of the salary of current hospital consultants. The view was that as the present consultants' work practices have been expanded so dramatically by both the 1991 and the 1997 contracts, absolute parity could not be acceptable. The Department was prepared to offer the percentage increases in line with the Buckley No. 36 and No. 37 reports but not the basic uplift granted in 1991. The total number of consultants, spouses and dependants involved is 357. Agreement has been reached by the parties involved and agencies are being advised to pay the appropriate amounts to the retired staff concerned by Christmas.
A sum of £4 million is being provided to meet the anticipated costs in the current year arising from the agreement reached on fees for general practitioners for administering influenza and pneumococcal vaccine. The indications to date are that there has been a good uptake of these vaccines, especially the influenza vaccine, this autumn.
During this year we made significant progress in establishing structures for partnership in the health services. We now have a well functioning National Partnership Forum, partnership committees in selected pilot sites and local partnership working groups. I see partnership as the best way forward for modernising our health services and it has a key role in implementing the programme of modernisation in the health sector as set out in the PPF. A sum of £2.8 million was set aside for partnership this year and it has been used in a range of areas, including facilitating the establishment of the process, training of partnership facilitators and participants and initial set-up costs.
Earlier this year the Government accepted in principle the recommendations of the expert group on various health professionals. The professionals covered comprise physiotherapists, occupational therapists, speech and language therapists, dieticians, social workers, chiropodists, care workers, orthoptists, audiologists and biochemists. The report deals with such important issues as career structures, pay scales, recruitment and retention, and training and education. The Government is providing £6.4 million in the current year to implement the recommendations of the report and is working closely with the Health Services Employers Agency and the unions representing these grades to progress the implementation process.
I am pleased to note that the Health Services Employers Agency, in conjunction with my Department, negotiated an important agreement with the relevant unions in relation to family support workers. This agreement will help ensure the provision of quality services to clients and will help to underline the importance of these vital staff in supporting some of our most vulnerable members of society. In accordance with the provisions of the Employment Equality Act, 1998, it is no longer permissible to remunerate staff on the basis of pay scales which provide for payments related to the age of the employee. Given this, it is necessary to abolish such age-related pay scales and this is now being done across the whole of the public sector on a phased basis in accordance with the provisions of the Act. The initial cost of this phasing out is £460,000.
An agreement was also reached between the Health Services Employers Agency and IMPACT in relation to the payment of a loyalty bonus to skilled IT staff in the health services who were engaged in year 2000 remedial work. A sum of almost £1.7 million is provided to cover the cost of the bonus. The additional costs to the administrative budget can be attributed to the creation of a number of additional posts, the pay award on age-related pay scales and increased travel and subsistence rates. The total additional requirement for all these items is £0.325 million.
The spending increases sought in this Estimate are partially offset by increased income available to my Department. My Department receives the 2% health contribution paid by employees and these revenues are an important source of funding in supporting service developments. In recent years the overall growth in the economy has led to significant buoyancy in these revenues. This Supplementary Estimate includes a revision of the estimate for health contribution revenues in the current year, providing £44 million additional revenue this year.
My Department also receives income in respect of EU nationals who have an entitlement to services in one EU country and under reciprocal arrangements can exercise this entitlement in other EU countries. The main source of this income is from the UK authorities. It is expected that income from this source will be £3 million higher than that provided for in the original Estimates.
This Supplementary Estimate will greatly assist health agencies in meeting the additional costs they are experiencing in a number of key areas. I commend it to the committee.