I welcome the Minister for Health and Children, Deputy Mary Harney. Briefing material provided by her Department has been circulated to members. We are meeting to consider the 2010 Supplementary Estimate for the Health Service Executive, referred by Dáil Éireann on 1 December 2010 for the consideration of the select committee. A proposed timetable for the meeting has been circulated. It allows for opening statements by the Minister and Opposition spokespersons, followed by a discussion and question and answer session. However, the timeline is indicative only. I understand people are under various pressures. I ask the Minister to make her opening statement.
Vote 40 - Health Service Executive (Supplementary)
The Revised Estimate for the Health Service Executive for 2010 provided it with €14.6 billion, a reduction of 4% in the outturn for 2009. The shortfall was made up of €659 million in pay cuts and €400 million in other expenditure. Notwithstanding the pressures and challenges this presented for the Health Service Executive, we are optimistic that the HSE will come in within budget, with the exception of the items I am dealing with today, which are not under its control.
The first item is a shortfall of €422 million in the anticipated income from the health levy. We are making provision for an additional €422 million to meet this shortfall. This money is collected by the Department of Social Protection in respect of all levies for the employed and by the Revenue Commissioners in respect of the self-employed. We are also providing €250 million for the voluntary early retirement and redundancy scheme, giving a total figure of €672 million.
Some savings have been achieved. The Department of Health and Children, for example, has achieved savings of €45 million, of which €35 million is savings in administration and legal fees and in some of the agencies such as the Mental Health Commission and Irish Medicines Board. In addition, €10 million in savings have been secured in the early childhood education payment, the cost of which was over estimated.
A further €12 million was saved in the Health Service Executive on ICT and €15 million was saved in the allocation for the H1N1 influenza pandemic. Approximately €15 million in savings was achieved in service development, including the recruitment of social workers. Some of these service developments were delayed by industrial action in the early part of the year. It is a timing issue and the recruitment process has almost been completed in line with commitments. In addition, €35 million has been received from the United Kingdom under EU regulations. These moneys are receipts for citizens who were insured in the UK and have health treatment in Ireland when they come to live here.
The total amount we are seeking in the Supplementary Estimate is €595 million. The four year plan published last week outlines the €1.4 billion in savings from the public health system to be achieved over the four years of the plan. We will be able to give more detail next week on the breakdown of almost €750 million of savings for 2011. In the context of these savings, we are also providing additional moneys of more than €100 million for medical cards, as well as further funding for the fair deal scheme, cancer treatment, home care packages and so forth. We will outline the relevant details after the budget next Tuesday.
On developments this year, the Health Service Executive has had a good year in respect of cost containment. Some of the evidence emerging in the summer led many people to anticipate a large overrun. The HSE has reduced overtime, the use of agency staff, travel and subsistence payments, corporate expenditure at head office and other costs. As a result, it will come in within budget with the exception of the items to which I referred.
At the same time, the HSE continues to develop services, particularly in cancer care, which has been moved to eight designated centres with a satellite centre in Letterkenny. We also have a number of rapid access diagnostic clinics, of which five are for prostate cancer and six for lung cancer. Phase one of the radiation oncology programme at Beaumont Hospital and St. James's Hospital has been completed. I recently opened a new pancreatic centre at St. Vincent's Hospital which will have a satellite centre in Cork. The Cork centre, which is currently located at the Mercy Hospital, will transfer to Cork University Hospital and all pancreatic surgery will be performed in a single location. To date the centre has seen 222 patients.
The number of colorectal cancer treatment centres has been reduced to 13. We will shortly announce details of centres for colonoscopies under the colorectal screening programme which is to begin on 1 January 2012. In advance of this, investment has been made in staff training, capital infrastructure for colonoscopy and other areas with a view to rolling out the programme.
The Health Service Executive has successfully implemented the fair deal scheme. Almost 13,000 individuals are benefiting from the scheme and additional money will be provided for the scheme in the budget. Additional funding will also be provided for the cancer programme, home care packages and so forth. That is the context in which I present the Supplementary Estimate and I ask members to support it.
At a meeting with the committee last week, I was asked about access to legal files for Thalidomide Ireland. We gave an undertaking to reflect on the speed at which we were able to make available this data. The Secretary General has undertaken to provide additional resources with a view to expediting the release of these legal documents. I understand that 90% of the documentation is ready and the remaining 10% should be ready in a matter of weeks when the additional resources are applied. The information will be released as quickly as possible. This has been a mammoth task for those involved as the documentation dates back 50 years. However, members on all sides were anxious that we make available this information as quickly as possible. We have reflected on the matter since last week's meeting and seek to improve the pace at which we can make it available.
I thank the Minister. All members will particularly welcome her concluding remarks on the release of information.
As one of the members who raised this matter last week, I welcome the Minister's announcement that additional resources have been provided and that 90% of the work has been done to provide the relevant documentation to Thalidomide Ireland. I urge that the remaining work be done in advance of Christmas so that the documentation can be provided.
I will not obstruct the Minister with the Estimates but I wish to raise a couple of issues. In the document the moneys seem to be apportioned between the various regions. Is that a normal accounting practice?
Yes, and at this stage we cannot be accurate. What we are providing for in the voluntary redundancy scheme is an enabling measure. We do not know yet how many people will withdraw from the application process. A total of 3,775 people applied under the two schemes. Already, 662 have withdrawn since they applied ten days ago. We are now working off a figure of 3,143. We cannot be precise until we see the breakdown in terms of the grades and salaries. We are putting in a figure of €250 million. We estimate a saving next year of a minimum of €120 million. At the moment those are the best estimates we can make until the process is finalised.
I also welcome the savings announced by the Minister on legal and other fees within the Department.
The Minister referred to an initial application from 3,775 people and that 662 have withdrawn. I presume the Minister has no way of envisaging how many others will withdraw within the timescale. Is there any way people can be refused permission to retire? If someone is in a key job and they have built up a high level of experience in an important area and there is no one suitable to take over the work, is it possible for such an applicant to be refused permission to participate in the scheme?
With regard to the savings, the Minister outlined that €15 million of the funding will not be spent. She gave a list of areas, including innovative service delivery projects, demographic issues for home care packages, cancer services and the implementation of the recommendations made in the Ryan report. I am concerned that money is not spent. I accept the Minister said it will roll over into next year. I seek clarification that no money will be lost to any of the programmes. I refer in particular to the home care packages, given that there is anecdotal evidence from around the country that those who need them do not get them because of the shortage of resources.
The Minister outlined a list of various developments in cancer services. The targets for waiting times for urgent referrals for colonoscopies are not being met in some parts of the country. That is something we are all most concerned about. Those targets must be met. I welcome the roll out of colonoscopy screening from 1 January 2012. Hospitals are tendering to do the work at the moment. Could the Minister ensure that they will also have the capacity to carry out symptomatic testing? If someone has symptoms and is referred for a colonoscopy the roll-out of the screening programme should not affect waiting times for those who have been tested and who have shown symptoms. That would be important. It is something the Irish Cancer Society is concerned about as well. I urge the Minister to ensure that any money available for cancer services is used and that the targets in various parts of the country are met.
I also welcome the savings on the H1N1 influenza funding that is not spent. I note that some of the vaccines were destroyed, which implies some money was lost. Will the Minister outline the amount of vaccine that was not used or could not be used?
Last week I raised the issue of collecting outstanding moneys from private health insurers. There was a particular problem in the west but I suspect that it was more widespread than that. Will the Minister provide an update on whether the money will be brought in by the end of the year?
I am most concerned at the amount of money being spent on agency workers. The extra costs of using agency nurses because of the moratorium was raised in the Health Service Executive west area. I have seen alarming figures on the cost of agency nurses, in particular, around the country. The Minister spoke about trying to address that issue. Either she or Mr. Magee referred to it at last week's meeting. Could the Minister provide information on how she will reduce the cost of using agency nurses, in particular? It is an extra cost to the various HSE areas?
Some of the so-called quangos, the various bodies under the Department, have been amalgamated already as recommended in the McCarthy report. Does the Minister have any plans to further reduce costs through the amalgamation of other quangos as a cost-saving measure? I accept some of them are doing worthwhile work.
I apologise for my late arrival; I understood the meeting was to begin at 2.15 p.m. I have read the Minister's explanatory note. Following on from what Deputy O'Sullivan has said, I do not know if she asked the Minister to quantify the spend on agency staff, doctors, nurses and others, in the past year, but that would be a useful figure to have.
I am not clear about a number of issues. When was the Estimate revised?
It was in March or April.
The Minister was way out in the calculation on the health levy. It is 17.5%.
Could the Minister please expand on exactly what is involved in the sum of €70 million under subhead B5, grants in respect of certain other health bodies, including voluntary and joint board hospitals? What does it mean and to what hospitals does it refer? I would also like further clarification on service developments and innovative service delivery projects. In particular, I would like an explanation on information systems and related services for health agencies, which is €140 million. I would like a breakdown on that as it seems like an awful lot of money. They are my main concerns.
I thank the Minister. I accept her figures and the necessity for them. I have no difficulty supporting the Supplementary Estimate. I ask about savings as a result of transferring more resources to primary care away from the acute hospital service. I have questions on the Croke Park agreement and whether any savings will accrue in the current year from it and what progress is being made in bringing more flexibility into the system. My final question relates to the GMS and whether there are any savings as a result of centralising the processing of claims. Will the Minister elaborate on the future of community welfare officers and whether they will move back to the Department of Social Protection? Are there any implications in that regard for the health service?
I too thank the Minister for her explanation. In terms of the early retirement scheme and the voluntary redundancy scheme, the fact that the deadline has been extended to 3 December means we cannot have more accurate information as people still have a few days to withdraw if they so wish. I welcome some of the savings highlighted by the Minister, in particular the €35 million in administrative savings. Could a more integrated transport system with the use of, for example, school transport that is only used in the mornings and the evenings be introduced?
I am somewhat concerned about the issue of agency workers. Some more work must be done on it. I am happy, however, to support this Supplementary Estimate.
A total of €20 million of the €60 million paid out in medical legal compensation went to the legal profession while a further €20 million was spent by the HSE on its own legal advice. Will the Minister explain what plans she has to reduce these costs? Will she explain the claims of €1 billion paid in overtime? Senior staff in the HSE, and other Departments, have retired on nice terms and conditions before, only to return as consultants on €800 a day at a later stage. Will the Minister reassure the committee this will not be the case with the forthcoming voluntary early retirement round in the HSE, as it would be self-defeating?
On behalf of the committee, I congratulate the Minister, her Department and the HSE on their work in the budgetary management process.
We are struck by the cost of agency staff. Is it feasible for hospitals to form panels of relief staff from which they could draw as an alternative to using costly agency staff, as has happened in the education sector?
The sums outlined for the voluntary early retirement and redundancy scheme are notional as we do not yet have the finalised data from the process. The figures in subhead B5 relate to the staff in the voluntary hospitals and section 39 agencies who also qualify for the redundancy and early retirement scheme. Of those who applied for the scheme, 662 staff have withdrawn their applications, reducing the overall number to 3,143. Until the process is concluded, I am not in position to give the final breakdown. Up to €250 million will be provided for the scheme, which we believe will be sufficient to meet those payments. It may seem excessive but we believe the final cost will be no greater than that.
There has been an emphasis on reducing the use of agency staff. The Croke Park agreement has a huge part to play in helping this by having at its core redeployment and greater flexibility. For example, if a hospital ward is very busy and another is not, the extra staff should move from the latter to the former to provide cover. Such work practices have to become the norm. Without them, a hospital will be forced to rely on agency staff.
It is not the case that agency staff are always more expensive, by the way. We have evidence now that agency staff are less expensive because they tend to be more junior staff rather than senior staff who would be paid a higher rate.
A health service for 4.3 million people will always have to rely on some element of agency or outside core staff providing cover on an emergency basis. I do not believe anyone has a problem with that. The problem arises when many routine staffing requirements are met through an agency response. At the joint committee meeting last week, the HSE chief executive officer made the commitment for a huge reduction in the use of agency staff next year. There are panels for nurses in all the Dublin hospitals and much co-operation between all hospitals on a regional basis. Staff, for example, at Ennis hospital recently redeployed to Limerick hospital. Such redeployment is at the heart of the Croke Park agreement.
The agreement's main achievement will be maintaining services with fewer workers rather than actual cash savings. We spend €1 billion on non-core pay in the HSE, of which €100 million accounts for agency workers. The HSE will be asked to provide substantial savings in this area in its forthcoming service plan. More medical cards for the GMS have been provided. Savings have been achieved with reductions in drugs costs, reimbursement to pharmacists and fees paid to GPs. Nonetheless, next year more moneys will be provided to cover medical cards because of the economic situation.
The community welfare officers will move on a secondment basis from 1 January to the Department of Social Protection. There are ongoing discussions with their unions on this matter. We do not believe this will have any adverse effects on their provision of services in the health area.
Provision has been made for capital expenditure of €40 million on ICT and there will be underspending of €30 million. This has mainly to do with timing issues and approval from CMOD, Department of Finance. There are strict procedures in place for the approval of ICT expenditure, yet it is the area in which we need to do most because our system is still very paper-based. One reason the HSE has not been able to provide all the details to everyone who has applied for the redundancy scheme is that it is having to go through employees' paper files, which is time-consuming and an old-fashioned way of doing business.
The ICT spend has been increasing but the approval procedure has been slow. It is mainly a timing issue and accordingly, we are applying the moneys to some of the areas where we have had overspending during the year.
The home care packages will be on target as there is no underspending in this Vote. The underspending in the roll-out of the radiation oncology network is due to timing.
Will the moneys allocated still be available the following year or will they be lost?
Yes, they will be available. There is no question of those moneys being lost. It is just a question of which year they will be spent.
The recruitment of 200 additional social workers is on target. However, we do not have the full-year costs for them.
The HSE, to its credit, has been making huge strides to reduce the costs of its legal services. It procures approximately €5 billion worth of services, including drugs, every year. We will place emphasis on asking those who supply services to the HSE to substantially reduce their prices in these difficult times. We expect the bulk of the reduction to come from the legal side. Those who supply a customer as large as the HSE should be mindful of what a good customer it is. We should all look after our good customers in these challenging times.
We will move to a central national procurement agency. The main advantage of a single entity here is that it can get better savings than various entities going separately to suppliers. Further savings will also be made in drugs procurement next year.
Regarding Deputy Jan O'Sullivan's question about quangos, there is a misunderstanding that if one puts agencies together, one saves money. In a public sector environment in which people have guaranteed jobs, unless one can fire people, one does not make savings. The savings are minimal. However, we have subsumed an enormous amount of organisations either into the HSE or into the Department. On the remaining one, the Office for Tobacco Control, the legislation was approved yesterday by the Cabinet which we hope to deal with the week after next and have it subsumed into the HSE on 1 or 2 January, whatever the first working day is - legally it will be from 1 January.
Many of these decisions have been extraordinarily controversial as regards those with an interest in this area, including the Irish Cancer Society in relation to the Office for Tobacco Control. Most people recognise that the Mental Health Commission is doing very good work as the regulator of mental health service. In time we want to bring that into HIQA, but the view was that since this was a new entity, as was HIQA, the last thing that should be done was to bring them together at this point. That will happen over time when it comes to the licensing of hospitals and so on, but I am not aware of any other outstanding agencies in the health area, subject to correction. Either the legislation must be enacted or it is in the process of being enacted. We got a very good bill of health from the Department of Finance recently on our efforts in this regard, but the amount of money being saved is not enormous. However, there are savings on administration, telephones, office space and so on.
On the H1N1 swine flu vaccine, we spent €34 million, and there were 1 million doses left on which we could not get our money back, and these have not yet been used. We were due to spend €88 million, by the way, and we spent €34 million, so there are 1 million doses left.
I will defend the Minister in making the decision. It was right to take the precaution of having these stocks available. It could have turned out to be much worse than it did. Nonetheless, it is disappointing that we have not been able to off-load the million doses. If we cannot, and they are out of date by the end of the year, could we not give them to a Third World country and get some value out of them for somebody?
I have asked a number of questions and I should like the Minister to address them. What about the issue of senior staff coming back, having already been made redundant?
I must apologise - they cannot come back and that is a very strong condition of the voluntary redundancy and early retirement scheme. Deputy O'Sullivan asked if any key staff decide to leave, whether we can stop them going. No, we cannot stop people going. We can only stop people from leaving if we are oversubscribed. We were not oversubscribed, but there is an agreement with the unions on redeployment. While many excellent people with fantastic experience are leaving, no one is indispensable. We can all be replaced, and so we should not get carried away with ourselves, in that regard.
We all know that. It is a matter for higher authority. What about the amount spent on agencies?
Mr. Breslin, who is much better than I am in this regard, says it is €120 million. Somehow, I had thought it was €90 million, but in any event it will be substantially reduced next year.
What about the €20 million the HSE spent on its own legal advice, in addition to the €20 million paid to the lawyers representing those who were paid out €60 million?
There is a misunderstanding here. Most of that is in the child care area. I shall get the breakdown for the Deputy, but most of the HSE's legal spend is in the whole child care space. It is not a question of people giving the agency advice. Obviously, it has to get legal advice, but the vast majority of the spend, to the best of my knowledge, is in the whole child care area. We are reflecting on whether we need the level of legal representation that is being used. There are very big issues here, and there are two schools of thought on the level of legal representation in these cases. However, a very large part of the spend is in the whole area of child protection and child care.
On the Minister's indication that the Department of Finance did not approve some of the ICT spending, or whatever-----
I did not mean to imply that. There is a very vigorous process for evaluating these projects. Much of the underspending is to do with timing issues, because the projects are behind in terms of where we had thought they might be at this time. In other words, they are running into 2011 rather than 2010. There is a rigorous process for all public service organisations in relation to any spending on ICT in particular, as well as on other areas.
Does some of that relate to the introduction of a unique patient identifier?
No, because the Health Information and Quality Authority Bill has to give us the authority to do that.
I do not want to finish on a negative note, but we are nearly 20% out on the estimate for the programme-----
What happened was that the €250 million we are looking for today relates to voluntary redundancy and the early retirement scheme. We had not that programme in place when we did the revised Estimate.
I am specifically referring to the health levy.
That is not calculated by us, but rather is a forecast by the Department of Social Protection, the Department of Finance and the Revenue Commissioners. There is a very complicated formula involved here. Essentially, we will get 22% of the pot of money that is collected. They overpaid us last year by €70 million, but have grossly underpaid us this year. To a large extent, it has to do with economic performance and employment and receipts generally. It is interesting that the self-employed contribution has remained on target. The rest of the employed complement is below target and that is the reason for the enormous shortfall.
Is that because of the enormous increase in unemployment?
It is in combination with the increase in unemployment, but thankfully that statistic is going in the right direction. We have the biggest monthly fall since 2004, I believe. It has to do with lower levels of earnings as well, because obviously since it is based on a percentage of what a person earns, reductions in pay will also account for the shortfall. The reductions in the private sector may be larger than anyone had anticipated.