With regard to nursing homes, the report of the Comptroller and Auditor General is welcomed both by my board and by me as chief executive officer. It is accurate, fair and correct in its conclusions as it applied to the Western Health Board. It raises some fundamental issues for health care funding and budgetary management in the health service. It illustrates the complexity of the legislative and regulatory arena in which we deliver services. It also highlights the tensions for health boards between the Health (Amendment) (No. 3) Act, 1996, and the sustained increases in service demand. The difficulties of protecting funding for individual services within the overarching accountability requirements are clearly illustrated.
The committee will be aware that the subvention scheme commenced in September 1993 in line with the Health (Nursing Homes) Act, 1990, and Nursing Homes (Subvention) Regulations, 1993. As with any new legislation, there was initial debate on interpretation and application of the associated regulations. Officers from my board attended training sessions provided by the Department of Health and Children and implemented the regulations as advised at that point. After some months of operation, staff in my board began to raise queries about the interpretation of Article 8.2 in particular. There were a number of requests to the Department to clarify these issues, both verbally and in writing, including the legal advice we had received. The board continued to act in accordance with the clarification and specific guidance issued. In effect, while one fifth of the non-contributory old age pension was disregarded in calculating means and assessing eligibility, it was subsequently not taken into account in making the subvention payment.
In December 1996 correspondence was received from the Department revising the guidance on Article 8.2. My board applied this guidance to all current and new cases in 1997. Additional funding made available by the Department in 1998 included a provision for arrears, but this proved inadequate because of the overall demand for new subventions, outlined on page 6 of my submission to the committee.
The board's continuing priority was to meet the demands of new subvention clients in the first instance. The intention at all times was to discharge our liability to pay arrears due to all 1,269 individuals under Article 8.2 as soon as the nursing home budget allowed. In 1998 the board only had £180,000 left in the nursing home budget by the end of the year without paying the arrears. At the same time there was a serious corporate budget deficit. Notwithstanding this, the £180,000 from the nursing home budget was retained within elderly services rather than pay the arrears and used for the most urgent cases requiring incontinence wear and home help services. The year 1999 proved to be extremely challenging for the subvention scheme with further pressures arising from increased demand, increased dependency levels and increases in hardship cases. While the easing of the sons and daughters provision was welcome, it compounded the financial challenges. In 1999 there was an overrun of £978,000 in the nursing home budget without paying the arrears.
In the year 2000 the board commenced payment of arrears and the bulk of payments were complete in 2001 as outlined on page 7. The remaining cases involve difficulties in identifying next of kin. Every effort is being made to conclude them. It is likely that a proportion will be referred to the State solicitor as intestate.
Assessment of family circumstances ceased in January 1999 in response to the statutory instrument. All arrears were calculated and the board commenced payment that year.
We paid an amount of £200,000 up until advice issued from the Department to await the issue of a national indemnity letter for each case. Payments recommenced when it arrived in October 2001. We expect to complete the process by March 2002, with the exception of cases where there is no next of kin.
In March 2001 my board debated all the issues relating to nursing home subvention, including arrears. Members recognised that there were still equity issues for clients who had income less than the non-contributory old age pension when Article 8.2 was applied in isolation. As a result, and notwithstanding the fact that there was no standardised approach nationally to the implementation of Article 10.6, our board used its discretionary powers to apply the article to all current clients with effect from last March. This cost of £900,000 was met from its own revenue. In the 2002 letter of allocation we have received an amount for implementing this on a current basis. Our board also now operates a formal policy on hardship where the cost of nursing home care exceeds the client's ability to pay having applied all these provisions. As prices increase, we envisage significant demands being made on an ongoing basis on the basis of hardship.
Our board would welcome greater clarity in the operation of the long-term care provision, including the following: the subvention should be a needs led entitlement which is fully funded; clients should have the option of having a subvented community choice or a residential based option; the contracting of residential care beds should be based on patient needs, with the minimum of financial administration for patients and maximum security for appropriate placement. The commitment in the new national health strategy to bring about this clarification in legislation and review the scheme is welcome.
I accept fully that the payment of arrears to clients and their families was delayed in the Western Health Board. I regret this and have apologised in public to all concerned. I want to reassure the committee that this matter will be rectified in full. I have taken actions to prevent a recurrence.