COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 7 May 2009

HSE — Financial Statements 2007.

Mr. Michael Scanlan (Secretary General, Department of Health and Children) and Professor Brendan Drumm (Chief Executive Officer, Health Service Executive) called and examined.

Chairman

I draw attention to the fact that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee, and the committee cannot guarantee any level of privilege to witnesses appearing before it. I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses, or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions within Standing Order 158 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I welcome Mr. Michael Scanlan, Secretary General of the Department of Health and Children, and ask him to introduce his officials.

Mr. Michael Scanlan

I am accompanied by Dr. Tony Holohan, chief medical officer of the Department, and Mr. Jim Breslin and Mr. David Smith from the finance unit. There are two other officials from the parliamentary affairs division.

Chairman

I ask Professor Drumm to introduce his officials.

Professor Brendan Drumm

I am accompanied by Ms Ann Doherty, national director of the National Hospitals Office; Ms Laverne McGuinness, national director of primary, community and continuing care; and Mr. Liam Woods, national director of finance.

Chairman

I ask the officials from the Department of Finance to introduce themselves.

Mr. Tom Heffernan

I am a principal officer from the sectoral policy division and I am accompanied by Mr. Dermot Keane, who is responsible for administering budgets.

Chairman

I thank the witnesses. I ask Mr. John Buckley to introduce Votes 39 and 40, chapters 13.1, 14.1 and 14.2 of the 2007 annual report, and the financial statements. The full text of chapters 13 and 14 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at www.audgen.gov.ie.

Mr. John Buckley

Almost €14 billion was spent by the HSE during 2007. Approximately €8.2 billion of that expenditure was on primary, community and continuing care, including certain grants, and €5 billion was spent on hospital services. A further €443 million was spent by the Department of Health and Children, of which €190 million went to various developmental, consultative, supervisory and advisory boards, of which there are about 16. I will confine my remarks to the relevant chapters of the annual report.

Chapter 13 outlined the status of the winding up of Irish Blindcraft. At the point the report was drafted, trading had ceased and the staff had been made redundant. An advance to enable the redundancy payments to be made had been provided by the Department. This was repaid from the proceeds of a commercial loan secured on the premises. Our concern around that time was due to the fact that the loan was dearer to service than Government borrowing and that its liquidation depended upon the sale of the property. In this regard there were some doubts about the legal capacity of the board and the trustees. In the event, the property was not sold. The Department has paid off the loan, together with accrued interest, and it is intended to transfer the property to the HSE.

There are two chapters dealing with the HSE. The first deals with its change management arrangements. Much of the rationale for the HSE is based on the aim of creating a unified national health service. In pursuit of that objective, the board is attempting to reconfigure the services it delivers through its hospitals programme and those it delivers in the community and, at the same time, to integrate both of these areas. The purpose of the chapter is to outline the scope of what is known as the transformation programme and its current status.

Considering first the services in the community, the aim was to create primary care teams, consisting of GPs, public health nurses, practice nurses, home help personnel and administrative staff, which were intended to serve areas with a population of between 4,000 and 10,000 people. Their operation was to be associated with wider health and social care networks, which are networks of primary care personnel such as speech and language therapists, dieticians, social workers, community welfare officers and psychologists. The wider network would cater for between 30,000 and 50,000 people. At the moment there are 110 primary care teams functioning. The last time we considered this area, around February, no wider networks had been established.

In the hospital services area, the aim was to reshape the service so that emergency and complex care was delivered through centres of excellence and routine care delivered on a local basis either in the home or through community services or local hospitals. Before the end of 2009 it was planned to integrate both services, creating a single services directorate and providing for clinical leadership in the delivery of services. This should be facilitated by the recent agreement with hospital consultants. I intend to review that aspect of the change programme in next year's annual report. In the meantime, the Accounting Officer will be in a position to outline the progress since the report was drawn up.

The second chapter on the HSE deals with budget management. It draws attention to the fact that budget management did not function well due to a number of factors, including a lack of alignment between financial allocations, staff number approvals and activity; inadequate budget review mechanisms and actions to maintain a balanced budget; and a disjoint between the central management objectives and the actions of local managers. While formally the service plan must be based on an agreed allocation, the evidence suggests that the likelihood of a deficit on the core programme was known to the HSE before the year began. However, action to reduce spending began only around the middle of the year. Although cost-saving measures had been identified at that point, they did not yield the targeted savings by the end of the year.

We concluded that the performance reporting system actually was adequate for the purpose, at least, of directing attention to key movements in cost and triggering remedial action, notwithstanding some lack of confidence in the system on the part of users due to a number of shortcomings, which included not distinguishing minor capital from revenue items and the absence of standardised coding at the level of initial recording in the financial records. Budget review mechanisms were not ideal in that while variances were identified, this in its own would not have been enough. They needed to be explained in terms of cost and activity movements.

Budget overruns in local units were ascribed to a culture of spending money in the expectation of a top-up which would be available at the end of the year. There were some signs that this was being addressed in that the units we examined broke even in 2008, admittedly after being given uplifts of between 10% and 18% in their allocations. The ultimate effect of the overruns was that while the budget was balanced, it was done at the expense of not carrying out planned activities or delaying the introduction of new services. The total diverted to meet core budget overruns was more than €400 million. Of this, €208 million was to provide for new services that were not commenced, and much of the balance was sourced from funds originally designated to meet the repayment of long-stay charges levied on persons who were eligible for nursing home accommodation.

Overall, the audit concluded that in order to get more rigour into the budgetary system, the HSE needed to focus the efforts of all managers at all levels of the system on providing an agreed level of service at the agreed allocation; to make better use of the performance reporting system to trigger early corrective action; to monitor local unit budgets actively and discourage overspending and the bailout mentality; and to ensure costings and headcounts are aligned for all activities.

The audit of the HSE appropriation account for 2008 is almost complete. My staff have reported that a balanced budget was achieved, and it appeared there was more robust monitoring of the budget in 2008. I wish to deal briefly with the format of the accounts before I finish. Concerning the format of the various accounts before the committee, I believe there is a need to bring some coherence and consistency to the multiple versions of the HSE's financial results so that users can understand how the expenditure of the organisation has been applied in any particular year. Currently, different bases are used for the presentation of the accrual accounts, the appropriation accounts and the annual estimates. This is something all of us must keep under review in the future.

Chairman

I thank Mr. Buckley and call on Mr. Scanlan to make his opening statement.

Mr. Michael Scanlan

I thank the Chairman. I am conscious of time pressure and therefore will not read my script verbatim. I am pleased to have another opportunity to meet with the committee and to discuss the 2007 appropriation accounts and the annual report of the Comptroller and Auditor General.

The principal objective of the Department of Health and Children is the improvement of the health and well-being of the people of Ireland. When measured against major health indicators and our EU counterparts, it is clear that Ireland has achieved very significant health gains over the past decade. Life expectancy in Ireland is now above the EU average for the first time. We have added 8.5 years to our life expectancy since we joined the EU in 1973. There has been a reduction of 38% in circulatory system disease between 1997 and 2005. Over the same period, the cancer mortality rate has fallen by 13% and is now close to the EU average. The five-year relative survival rate for breast cancer is about 80% for the period 1999 to 2004 — the highest rate of improvement in the OECD. Infant mortality is down by 35% in the past ten years.

We face a period of huge challenge in health with the sudden downturn in the economy and the deterioration in the public finances. Now, more than ever, all of us working in the health service need to focus on one overriding objective, namely, how to deliver the best possible outcomes for people within the resources available to us. This will require an increased focus on how money is spent, on the outputs delivered and the outcomes achieved. To succeed, we must recognise and build on the hard work and commitment of staff working at all levels in the health service, including in the Department of Health and Children.

Approximately 475 people work in the Department, spread across ten divisions. I shall comment briefly on some of the principal areas of work involved. As in other Departments, we deal with parliamentary work, legislation, international and interdepartmental work. We also deal with the normal policy and oversight work with regard to our own health agencies, apart altogether from the HSE. We have the lead role with regard to issues such as patient safety. We had the Commission on Patient Safety chaired by Dr. Deirdre Madden and my chief medical officer is leading its implementation. We deal with eligibility, blood policy, food and medicines, national partnership, assisted human reproduction, adoption and post mortem policy. We have long-term planning including workforce planning and policy development. We produce policy documents such as A Vision for Change, the cancer control strategy and the primary care strategy. We also have three cross-cutting offices in the Department: the office for the Minister of State with responsibility for children and youth affairs, the office for older people and the office for disability and mental health.

I wish to focus in particular on some areas of work with which we also deal, one being budgets which is relevant. It is important to say that although the HSE has its own Vote, in the way the system works the Minister negotiates and agrees the health Estimates with Government each year. It is the Minister who, like all Ministers, regularly reports to Government about the way in which the Vote is being managed throughout the year. Obviously, we work very closely with the HSE on these issues but ultimately the Department and the Minister report to the Department of Finance and the Minister for Finance. The same arrangements apply with regard to capital and ICT spending by the HSE and all health agencies. Similarly, concerning public service pay, which takes up so much of public service expenditure, it is the Minister for Health and Children who is responsible under the Health Act 2004 for ensuring that Government policy on public service pay, employment control, conditions of service, superannuation and industrial relations are implemented by the HSE and other health agencies. We work with colleagues in the Department of Finance, the HSE and other agencies on all these issues. My own staff are involved in national pay negotiations and in major health sector negotiations, such as the negotiation of the new consultant contract and the resolution of the nurses dispute in 2008.

Performance management is one of the issues on which the Comptroller and Auditor General usefully focused in his report. We are very conscious of the need to improve the link between policy development and implementation. For that reason, we have put a great deal of effort into working with the HSE to agree specific measurable target outputs and outcomes each year. We are partners in this and health can be seen no longer as a black hole. The HSE's annual service plan and the associated performance evaluation mechanisms now give a much clearer description of the nature and quantum of health and personal social services being provided to the people of this country.

Like any organisation, the Department also has its own internal support functions which deal with issues such as HR, finance, ICT, corporate services and legal services. The committee expressed particular interest in the issues of internal audit and risk management. We have an internal audit function in place, in line with the recommendations of the Mullarkey report. Our audit committee which has an independent outside chair operates to a written charter which sets out its role and functions in respect of financial reporting, internal control, risk management, internal audit and compliance. The internal audit programme is linked to the Department's risk register and 20 audit reports were completed during 2007 and 2008.

We also have a risk management committee in place which has overseen the development of a risk register database which is regularly reviewed and updated. The proactive management of risk is also integrated with the Department's business planning process, with business plans required to link business items with risks on the risk register. Reports are regularly made to the Department's management committee on the key risks throughout the Department and on the actions being taken to minimise these risks.

Understandably, there can be confusion concerning the respective roles of the Department and the HSE. Our customers are ultimately the same — the people who need and use the Irish health care system — and we work together on a daily basis to try to ensure that the best possible services are provided to the people of Ireland.

The Minister is politically responsible and accountable for both health policy and the delivery of that policy. The recent report by the task force on the public service highlighted the need for a new focus on the capacity of Departments, as the primary locus of policy formulation and advice for Ministers, to exercise their oversight functions.

In my view, the Department has contributed in no small part to the measurable and exceptional improvements in health outcomes experienced by people in Ireland over recent years. I wish to make it clear that there is always room for improvement. Looking forward over the next few years, we can improve the way we work in the Department. I have no doubt about that and frankly we have no choice. At the same time, I wish to say that the people working in the Department have every right to be proud of the work they do and the commitment they bring to that work. I thank committee members for their attention.

Chairman

May we publish the statement?

Mr. Michael Scanlan

Yes.

Chairman

I call on Professor Drumm to make his opening statement.

Professor Brendan Drumm

As Accounting Officer, I am pleased to be able to inform the committee that for the year 2007 the HSE succeeded in delivering the health and personal social services it was contracted to provide within the total gross Vote of €13.98 billion provided by Government. We also fully expended our 2007 capital budget. As noted by the Comptroller and Auditor General, we achieved both results despite significant financial pressures as a result of growing demands for services and demand-led schemes such as the general practitioner and medical card schemes, and especially in the area of drugs.

In 2008, which presented an even more challenging financial environment, we again delivered our service obligations in line with the Vote. During 2007 and 2008 we made significant progress in modernising how we allocate and manage our various budgets.

From the perspective of transforming how we manage and control our business, these improvements have enabled us to concentrate on allocating resources to high-performing services and to stop having to provide poor performing services with additional funding towards year end. We agree fully with the comments made by the Comptroller and Auditor General that we were dealing with an historic tendency of spending to a high level during the year on the basis that bailout funding would be provided later in the year. It is no small matter to try to change that type of thinking and culture across an organisation of this size.

We now have greater transparency. Supplementary budgets for service providers are now the exception rather than the norm. At the start of the year service managers are clear about their annual budget and that no additional funding will be available to them. This process is continually reinforced by our management teams. There is now a greater incentive for facilities and services to seek efficiencies and to maximize the impact of their resources compared to what might have been the tendency in years gone by. This process is being continuously reinforced by our management teams. There is now a greater incentive for facilities and services to seek efficiencies and maximize the impact of their resources as opposed to what the tendency might have been in years gone by. This is an area I hope, and I am determined we can pursue further in future.

Operating behind this approach is our focus on measuring how our various facilities and services are performing when measured against our investment and similar facilities and services in other parts of the country. I am pleased the committee has sought significant information from us in terms of the resources provided at individual unit level, which we are glad to provide. We believe that transparency brings an honesty to the debates we face every day in the media in respect of cutbacks and their impact on front line services.

Our monthly performance monitoring report and our recently launched HealthStat enable us to identify where we are achieving and exceeding targets. This provides us with valuable intelligence and an incentive for less well performing facilities to improve. We constantly hear in the media of crises and dangers to patients relating to the reduction in resources which we face in the present challenging times. I believe we must be constantly aware of the fact that we have a significant resource in the taxpayer but we need flexibility in terms of how we apply and how we can move that resource. The detailed information we now have, which includes information on the volume of services we are providing, staffing and expenditure, are assessed by our control group under the chairmanship of our director of finance, Mr. Liam Woods. These assessments ensure that services are being delivered in accordance with our national service plan and, where targets are not being met, that the appropriate action is taken. We have in place a successful value for money programme and a series of cost containment measures. They are aimed at ensuring that when service pressures result in budget over-runs, remedial actions are swiftly identified to bring the budgets back on profile.

In its letter of invitation the committee requested that I make reference in my opening statement to the operation of our internal audit and risk management functions. Our internal auditor, Mr. Michael Flynn, is present if required to expand on that function. The HSE internal audit directorate is led by a national director and comprises individual audit units based throughout the country. We also have a very active audit committee which is a sub-committee of the board of the HSE. It includes four independent non-executive directors. The internal audit directorate and the audit committee operate under charters provided by the board and the Minister for Health and Children. The national director of internal audit reports directly to the chairman of the audit committee and also has a reporting relationship to myself. I stress it is intended that we will expand the capabilities of internal audit and we are well advanced in this regard.

Historically, we have tended to audit important areas such as travel expenses, etc. However, in the context of the bulk of our work, which is clinical activity, we have seldom carried out any audits. For example, how many outpatient attendances does a hospital have? How many patients does a public health nurse see? How many inpatient discharges occur in a hospital? Historically, we have tended to accept all these figures at face value. We are now introducing a very significant clinical support role involving nurses working with our internal audit function. In the coming year a very different approach will be seen in respect of how we validate much of the data we present at such committees as this, and we will be pleased to share that data openly with the committee.

Quality and risk management are complementary and together form a key component of modern health care management. The HSE is committed to delivering high quality services to all patients and clients and to fostering a culture where safety comes first. This is being achieved by constantly identifying opportunities to improve our existing services and by incorporating up-to-date quality and safety standards into planning all aspects of new and reconfigured services. The development of clinical directorates will have a significant role in advancing the safety and quality of our services. We intend to establish standard pathways of clinical care such that the incidence of a patient with the same condition being treated differently in different parts of the service will be more and more rooted out. We will be able to set quality outcome standards that will be measurable. The HSE board has a risk committee which focuses principally on assisting the board to fulfil its duties by providing an independent and objective review of all risks. Our office of quality and risk was established in May 2006 and its function is to specify, enable and assure quality and safety in the HSE. Within this office we have also developed a quality and risk health care audit function which, in collaboration with internal audit, provides assurance of compliance with quality and risk standards.

In drawing my comments to a conclusion I wish to highlight that the transformation of our health services in a way that is financially sustainable is a very significant undertaking. Since taking up this post I have held the view that financial sustainability would always be a challenge, never mind the effects of the present downturn in the economy. Given the substantial improvements we have made in recent years to measure and manage our performance in services, finance and human resources, our shift towards more community based care and the significant support for change now visible among large numbers of clinicians, the pace of transformation is accelerating. The arguments of three and four years ago were based on simply providing more of the same, especially on hospital sites which often were not adequately performance measured and operated. Such sites were often the only point of health care activity for most of the community and the arguments have now moved on. There is now an acceptance that we are in this service to provide the people we serve with the best possible care and to provide it in a way which is easiest for such people to access. We are now well along the road of providing much of this care in the community, close to people and their homes and minimising the number of visits people must make to large, complex hospital structures. As part of the invitation to attend this meeting the committee requested information on a range of issues and we have submitted our responses to the committee in writing. However, if the committee has any further queries we will do our best to respond to them.

Chairman

I thank Professor Drumm. May we publish the statement?

Professor Brendan Drumm

Yes.

Chairman

A great deal of preparation has gone into this meeting. At the request of members we asked the secretariat to make a submission to the HSE to get a good deal of information. I acknowledge, generally speaking, that information was forthcoming and it has helped us greatly to prepare for today. We have a broad range of issues with which to deal. The House is suspended at present but there will be a vote at approximately 1 p.m. and we may suspend at that stage and reconvene if necessary.

Deputy Fleming will open with questions on budgeting issues, followed by Deputy Clune who will put questions on the change management programme. Deputy O'Brien will deal with accounts and Deputy Shortall will deal with service delivery issues. I call on members to stay focussed on their area of questioning and to be as brief as possible with questions. The time allocated for each person is 20 minutes. I will use common sense to extend that if a trail of questioning needs to be pursued. I also appeal to the delegation to keep the responses as brief as possible and to give as much information in as short a time as possible. There has been a tendency in recent times for responses to drag on and on without getting the answer to the question at the end of the day. I call for direct, short questioning and, in as much as possible, short, to-the-point responses. I call Deputy Fleming on questions related to budgeting issues.

Deputy Seán Fleming

I thank the Chairman and I welcome Mr. Scanlan and Professor Drumm and the various officials. I wish to deal with the issue of budgeting. This formed a separate chapter in the Comptroller and Auditor General's report. A number of issues were highlighted in respect of 2007 to which to some extent there has been a response. What lessons have been learned from what was highlighted? How exact and accurate is budgeting for the current year? It is a straightforward question which I direct to Professor Drumm.

Professor Brendan Drumm

It is a fair question. The lesson that always had to be learned was that budgets were finite. It is a very difficult business. I will be as brief as I can. It must be remembered our demand is driven by providers, in other words, not so much by patients but by the people who supply it, so we have to control that.

We run a system based on demand-led schemes which are statute-based and which, therefore, are to a large extent a bottomless pit, from our perspective, in terms of actually making those payments. However, that is not to excuse the fact that while those challenges are there, we had to embed a culture that budgets are finite. That was always going to take a period of time and we have made significant headway in getting rid of the culture of bailing out hospitals, which was mentioned in the report, late in the year because of outcries about specific patient issues that would not be addressed because of budget shortfalls. It is a significant challenge, not least in the PR environment, and we have achieved that. We had to learn that.

Deputy Seán Fleming

Professor Drumm stated he achieved that. I am looking at the HSE's new performance information system, HealthStat, which was produced recently. One headline says 27 of the 29 hospitals did not operate within their budgets in January 2009. Those are the delegation's figures and information. We have not gotten off to a good start this year if those are the figures for the first month.

Professor Brendan Drumm

I can let Mr. Woods deal with that. January has specific issues in terms of how financial budgets are set.

Mr. Liam Woods

On Deputy Fleming's broad question, we have, to the extent it is within our capacity to do so, implemented the conclusions of the Comptroller and Auditor General's report. A key issue which was flagged was the timing of the budget release and it can be noted the 2008 budgets were released in late 2007, so we have given clarity to budget holders as early as possible, which, the Deputy will understand, is very important in the environment in which we are working.

In terms of the specific point the Deputy made on variances in January, we track performance, in financial terms, across all 50 hospitals within our reporting framework. It is not unusual to have variances and we are watching the level of such variances. If variances are within 0.5% or 1% of a budget, the particular hospital may take action later in the year to bring that back on track. We are doing that on a monthly basis and, in control terms, we tend to meet weekly to oversee what is happening regarding the finances in the HSE.

Deputy Seán Fleming

How many of the 27 hospitals are more than 1% above their budget in the first month, if the delegation is watching them very carefully? If it is happening in 27 out of 29 hospitals, it seems to be widespread, based on the delegation's information.

Mr. Liam Woods

We are referencing 27 out of 50. In terms of HealthStat, there are 29, because that is the number included within it now. We are concerned here with a number out of 50. I do not have the performance statement for January, but recalling what I know about it, there are a small number of hospitals which have some significant issues we have to address, but most of the variances are not of concern at this stage.

Deputy Seán Fleming

I looked at the information providedto us in advance of this meeting and I see the HSE paid PA Consulting €1,600,785 last year to design and implement the HealthStat system and we find in the first month of its operation 27 out of 29 hospitals are causing difficulties. I need some reassurance on how this will be dealt with.

Mr. Liam Woods

There is an ongoing process pre-existing HealthStat, which is about monitoring the financial standing of each agency, either a HSE one or a voluntary one funded by it. We do that through our monthly control process, which we publish on our website monthly, once it is approved by the board.

Deputy Seán Fleming

If the delegation has detailed HealthStat figures, projections and its budget, how many hospital beds in hospital wards is it budgeting to close for the month of August? That is always a bone of contention. It must be within its service plan to close beds and wards in August. What is the budget on that for this August?

Professor Brendan Drumm

I do not want to confuse the two issues. On the HealthStat issue, we spent more than €1 million and continue to spend money, to some degree, on running it as a total measure of performance growth. It is not a performance management system, it is a system itself.

The most ineffective information in the report is the financial information. The most effective information is the clinical activity information, because there will be monthly ups and downs in financial information which will be dealt with through the control process. Our ultimate financial control arises if we deliver yearly on budget. That is our commitment.

Ms Ann Doherty

I do not want to delay the meeting. We have a service plan across the year. There is an annual budget for every hospital and we profile the budgets on a monthly basis. The Deputy is looking at the variance against a profile on a given month.

Deputy Seán Fleming

I am looking for the profile for August, not the variance.

Ms Ann Doherty

Regarding how we manage the system, I would be concerned we would focus on the number of beds which are closed. We are trying to a achieve a shift from inpatient to day cases and maximise the use of our resources. For example, August is a key holiday month and therefore we will have the maximum amount of capacity then because it is when the maximum number of people are on holiday. We will then ramp up capacity at another time of the year.

That is the balance across the service. I do not have the actual figure with me today. I am happy to provide it for the Deputy. It is a planning figure. We track it on a monthly basis and if there are variances on financial performance remedial action has to be taken, which then influences what one does at a particular point in time.

Deputy Seán Fleming

The reason I am following this is because I have listened to Professor Drumm speak on previous occasions, when he has talked about better utilisation of operating theatres on an ongoing basis during the course of the week. He has often said they effectively close at lunchtime on a Friday and historically, nobody wanted to do procedures and keep people in hospitals. The major theme we have in previous meetings was getting better utilisation for the hours.

The idea of getting more work done on a Friday afternoon does not appear to be running in the same direction as closing theatres at other times of the year. There are holiday periods but the theme on previous occasions was to get better utilisation of the facilities that are there.

Ms Ann Doherty

That is still the direction of travel. The Deputy asked specifically about August and I will answer his additional question. In terms of delivering our service plan, he may remember when it was published it focused on maximising day cases, which is a Monday to Friday service, in terms of an elective service, and also looked at maximising five day services. It is exactly what the Deputy described, namely, making sure the core hours of business are used effectively and efficiently.

Deputy Seán Fleming

Ms Doherty can understand the situation and she would say she does not like the emphasis on the number of beds and operating theatres that are closed during August. That should not be the emphasis. As a practising Deputy on the ground, I find the situation across all waiting lists deteriorating in the last year or two compared to a couple of years ago. I suspect in 2007 things were moving more quickly but they have since deteriorated. We do not like to talk about closed theatres and beds. We reflect the views of the public and have a duty to highlight these issues when there are waiting lists.

Professor Brendan Drumm

Perhaps the Deputy should be looking into the HealthStat for his local hospital and see how many patients were admitted on the day of surgery and what the day case rate is. He will find in places where there are waiting lists there are often low numbers admitted on the day of surgery. We have to work with the system to actually force it to operate within a certain constraint and we are becoming more efficient. We have data from all over the system that suggests the more beds we have open, the more people are admitted inappropriately and, in fact, far fewer people are admitted on the day of surgery.

We fully accept there are problems across different parts of the system but we are trying to introduce a culture of performance management which will change that. If we continue to focus on inpatient beds being open, then changing clinician practices to bring in inpatients for shorter periods of time, which is of benefit to patients as well, will prove almost impossible.

Deputy Seán Fleming

I will be fair to Professor Drumm on this topic. He might give us the full monthly profile for the 12 months including August——

Professor Brendan Drumm

We will do that.

Deputy Seán Fleming

——so we can see the complete picture and not just the August situation.

Chairman

Would Mr. Scanlan like to comment?

Mr. Michael Scanlan

If the Deputy would not mind, to return to his original question, the Comptroller and Auditor General's piece on budget management was important. I will try to be brief. I will discuss the lessons learned and some specific changes, as well as the ones Professor Drumm mentioned.

In 2008 the Minister for Finance sanctioned money to be spent, which is now conditional on how new development funding is spent. Money cannot be spent on new developments, other than as intended, without the prior sanction of both Ministers. This year there is a separate subhead in the Vote for new developments and a separate subhead for demand-led schemes. One tries to isolate and make the Government's intentions more transparent and see how one can achieve them. The other important development——

Chairman

Will Mr. Scanlan leave it at that because I am conscious of the 20 minute time limit?

Deputy Seán Fleming

We will be able to come back to that matter later. There is a paragraph in the Comptroller and Auditor General's report to the effect that a performance planning and review system has been put in place for senior managers which involves the development of key performance indicators. It states one of the most significant indicators upon which senior managers are being measured is the delivery of their budgets and financial plans. There is nothing in it about delivering a health service. Do people receive bonuses for ensuring they meet the financial management requirements? Is that a factor? Where does health care feature if budgets and financial plans are the most significant indicators by which managers are assessed?

Professor Brendan Drumm

There are several indicators and meeting budgets is a critical one but there are also several indicators relating to clinical services and the efficiency with which services are provided. It would be impossible and irresponsible to run an organisation like this if budgetary control was not close to the top of the list for every manager in the organisation.

Deputy Seán Fleming

Professor Drumm sent us a note on the amount the HSE had received from private insurers to cover the cost of private care in public beds. I raised this topic last year. At the end of 2008 the HSE was awaiting payment of €90 million from private insurers, representing approximately 30% of the bill as the charge for the year was €294 million. That seems to be a lot of money outstanding and I urge the HSE to have the money paid more quickly.

The next paragraph of Professor Drumm's letter shocks me. It refers to the impact of the 2008 consultants' contract and states income generated by the HSE from privately insured patients is likely to be reduced significantly following implementation of the 2008 consultants' contract. Under the provisions of the contract, a type A consultant deals only with public work. Consequently, where a type A consultant admits a patient to hospital, the HSE cannot raise a private accommodation charge for that patient, even if he or she has private health insurance. Professor Drumm adds that the implications are that the HSE's income from private insurance will fall significantly during 2009. The cash impact of this loss will not be experienced until late in 2009 but estimates indicate a potential loss of up to €50 million.

Last year Professor Drumm told me in conversation that he felt the proportion the private health sector paid to the HSE for private health care was nowhere near what it should be. I am shocked that it is a by-product of the consultants' contract that the HSE will be down at least €50 million. Is that this year or is it the annualised figure? It is a shock to learn that if someone with VHI cover is admitted to hospital, the accommodation charge which was appropriately raised in previous years will not now come to the HSE. That is a backhanded subvention to the private insurance companies. Will they reduce their charges to account for this? I know Professor Drumm cannot answer that question. I am shocked to see this coming to light as a by-product of the consultants' contract. Perhaps others are aware of it but it is the first time I have seen it.

Professor Brendan Drumm

Probably none of us saw it coming as a by-product. There is an issue——

Deputy Seán Fleming

I have to cut straightaway to the Secretary General of the Department of Health and Children. I want to hear him say he did not see this coming as a by-product of the consultants' contract.

Professor Brendan Drumm

I have to be honest. I was as central as anybody to the negotiations on the consultants' contract. We now have type A consultants. As they are not supposed to see private patients, there will always be an argument on the private insurance side that, therefore, they cannot bill for a private patient. We need to sit down with the Department of Health and Children and work with it to come up with an approach to this challenge. We need to call it out on how significant it is and come up with——

Deputy Seán Fleming

How many years did Professor Drumm spend negotiating the contract? Since I became a Deputy it has been under negotiation. Now we find a €50 million by-product.

Professor Brendan Drumm

It is a challenge that will come, for instance, from the insurance companies to paying for consultants who do not see patients privately. That is something we will have to take back to them and discuss first with the Department.

Mr. Michael Scanlan

The Deputy needs to be clear about the difference between a drop in income and the word that he used, "subsidy". If the number of private patients treated in public hospitals fell, there would be a drop in income, not an increase in subsidy. That is the key difference.

Deputy Seán Fleming

Subsidy to whom.

Mr. Michael Scanlan

If one treats the same number of private patients in hospitals as private patients and receives a smaller income, one can say that is an increase in subsidy. If one reduces the number of private patients, that is not an increase in subsidy.

Deputy Seán Fleming

We continue to treat the same number of private patients in public hospitals but are not now because of this——

Mr. Michael Scanlan

That is not what this says.

Deputy Seán Fleming

I do not understand what Mr. Scanlan said. He lost me.

Mr. Michael Scanlan

I am sorry.

Deputy Seán Fleming

It was nearly too subtle and I do not think others understood what he said. There will be the same number of private patients in public hospitals. This a definition issue. They are patients with private insurance who would normally have paid but because of this contract the hospitals will not be able to bill the VHI for the patient it insures. Public consultants will treat VHI patients. As a result, the taxpayer will not be able to charge the private health insurance companies for the patient with private health insurance. That is an extra cost to the HSE and the taxpayer. I did not know about this coming. The Department and the HSE should have seen it coming. They must have. Is the €50 million just the charge for 2009 or is it the annualised figure? This should have been highlighted before now.

Mr. Michael Scanlan

The Deputy is right in the way he describes it. The fact that one has private health insurance does not make one a private patient. It gives one the option to seek private treatment in our public hospitals or in a private hospital. One of the points on which we have been absolutely clear concerns accident and emergency services. Under the new contract or arrangements, one cannot opt to be a private patient, no matter how much private health insurance one has. We had major rows about this throughout the contract negotiations. One cannot opt to be a private patient in emergency departments. That is a policy decision taken by the Government. This is a policy issue but I will say what I can about it. My attitude is that one of the policy drivers in the consultant contract negotiations and, therefore, no surprise to me was the need to rebalance the mix of treatment in public hospitals in favour of public patients. It does not matter what level of insurance one has if one rebalances this mix. The income goes down but it is not an increased subsidy. People with private health insurance can choose to come into public hospitals as public patients or they can choose to go to private hospitals. There is a difference. This is not a surprise. We are talking about the actual figure.

Deputy Seán Fleming

This is my last point because others want to speak.

Chairman

Mr. Woods may have a point to make. From now on I do not want three answers to the one question.

Mr. Liam Woods

In response to the question about whether this is an annualised or a year to date estimate, it is a crude annual estimate and will need to be experienced to be fully understood. We are working to minimise it.

On the point about income collection, we are seeking to move it to one centre in Kilkenny to accelerate the rate of collection.

Deputy Seán Fleming

We will watch that process. I want to return to Mr. Scanlan on this issue. I understand and everybody accepts that everybody should be treated equally in an accident and emergency department as the result of an accident or other injury. There should not be an option to go private. Generally, there is no private accident and emergency system, although there are a few. I accept that there is no private insurance to cover the average accident and emergency department. Once a consultant sees a patient in the accident and emergency department and the patient requires surgery and admission, or is admitted without going through the accident and emergency department, it should be possible to bill the patient with private health insurance and the insurance company for the accommodation if the patient is going to be in hospital for one week or one month. That is the gap that costs €50 million, not the front door of the accident and emergency unit. We all accept accident and emergency wards are as they are.

Mr. Michael Scanlan

I agree with the Deputy.

Deputy Seán Fleming

Does Mr. Scanlan understand our concerns?

Mr. Michael Scanlan

Yes. I am happy to hear what the Deputy has to say about accident and emergency units. That view was not shared by the medical consultants during the course of the talks. They argued that because one has private health insurance, if one turns up in an accident and emergency department, one should be billable. I understand the point. My best advice, however, is that legally it is not the way our health system operates. There is private status when a person opts to be a private patient, not just because a person has private health insurance. I am entitled under Irish eligibility law to go to a public outpatient clinic and be admitted as a public patient to a public ward.

Chairman

With all due respect, people are asked at the door if they are public or private patients.

Mr. Michael Scanlan

That is true.

Chairman

It is the first question asked, regardless of the reason a person is coming in.

Mr. Michael Scanlan

I can confirm that because it happened to me personally; when I was asked that question, I said they had no right to ask me it, that I was there as a public patient.

Deputy Seán Fleming

This is an issue that shocks me personally. I have raised the topic of the consultants' contract negotiations previously. The contract was negotiated in the time of the boom. I suspect if we were negotiating it today, we would not be looking at the same figures. People might say it is history but the same was said about the expensive medical cards for the over 70s. A few years later we recognise it was a scandalous cost. This is the best advice from the medical consultants but who is running the country? What was our response? Did we roll over on some of these issues? Can we not put a mechanism in place to ascertain if a person has private insurance? To say after the contracts are signed and the agreement is in place that negotiations are under way with the private insurers is not good enough; it should have been done before the deals were finished.

Chairman

Point taken. The Comptroller and Auditor General is looking at the consultants' contract and will publish a report on the matter later this year. We will then return to the issue.

Deputy Seán Fleming

I will come back with other questions then.

Deputy Deirdre Clune

I have been asked to pose questions about changes in HSE structures. The aim of the primary care strategy was to have 530 primary care units in place by 2011. The target for this year is 210 teams and at present there are 110. Could we have an outline of the targets for this year?

Professor Brendan Drumm

This is the biggest change for the health service.

Ms Laverne McGuinness

In 2008, as part of our overall programme, we said we would have in place 97 primary care teams. At the end of December 2008, 94 of those teams were in place. Today there are 110 functioning teams in place. The plan is that at the end of 2009 we will have a full 210 teams and will have started a further 100, although they will not be fully functioning. By the end of the year there will be 310 primary care teams, 210 of which will be fully functioning, holding full clinical meetings with all of the disciplines, with the other 100 ready to come on stream in 2010.

Deputy Deirdre Clune

Many of them are in Cork.

Ms Laverne McGuinness

Yes. There are 36 in Dublin-mid Leinster, 29 in the west, 35 in the south and ten in Dublin north east. We have given details of the new 110 teams that will come on stream in 2009.

Deputy Deirdre Clune

There are 780 full-time equivalents and 360 GPs.

Ms Laverne McGuinness

Yes, 780 people are currently assigned to staff services; we have a full programme throughout the service. Therapists and public health nurses were organised separately; as they were not teamed together, collectively we have 2,700 staff who will be mapped on to these teams. This is happening as we speak. We will be able to give a full picture to the committee in a couple of months.

Deputy Deirdre Clune

Are those 2,700 staff part of the plan for 2009?

Ms Laverne McGuinness

Absolutely.

Deputy Deirdre Clune

Are they part of the 210 teams?

Ms Laverne McGuinness

They are part of the overall number of 310 teams, the totality of staff that will be remapped to the scheme. We are using existing staff to man the primary care teams and change the way of working. That is the main purpose of primary care teams, to change the way people work. Instead of a speech and language therapist, a physiotherapist and a GP operating on a solo basis and speaking to a client at different times, they will operate as a team in the best interests of the patient.

Deputy Deirdre Clune

Will every primary care team have these specialists?

Ms Laverne McGuinness

Yes. Every primary care team will have a core of a physiotherapist, a speech and language therapist, a public health nurse, a GP and a home help organiser. Most of them will have a community mental health nurse because we are going to co-locate primary mental health facilities with the primary care teams, where possible. We will also have a wider range of services, with psychologists serving a number of primary care teams. They would not need to be dedicated to one particular team.

There was a public private partnership initiative on the development of primary care centres, 150 of which have been approved by the board. The primary care centres will house a number of primary care teams. At the end of 2009 we hope to have nine of these primary care centres up and running with 12 of the teams in them. I have the names if the committee wishes to have them.

Deputy Deirdre Clune

Were they all developed as PPPs?

Ms Laverne McGuinness

Yes.

Deputy Deirdre Clune

In the current economic climate has the commitment to this model waned?

Ms Laverne McGuinness

There is a huge commitment.

Professor Brendan Drumm

We have huge interest. Mr. Brian Gilroy who pioneered this initiative is our director of estates and would say there is still a great deal of interest. We are confident the programme will be delivered in its entirety by the of 2011 with 500 teams on 200 sites. In Mallow, for instance, there will be three primary care teams in one development, covering 30,000 people.

Deputy Deirdre Clune

Will there be three teams per site?

Professor Brendan Drumm

Yes. In a town such as Mallow it makes sense for them to come together in one location, albeit as three teams.

Deputy Deirdre Clune

Is the target of 530 teams by 2011 going to be met?

Ms Laverne McGuinness

By 2011 we plan to have 530 primary care teams in place. Some of them are in development. As part of the overall strategy, the thinking is there would be additional funding and a large number of additional staff might come into play soon. Given the current economic climate, we are going to use the staff we have available and place them in primary care teams. There will be coverage by 530 primary care teams. As some of them might not have two dedicated therapists, they will have to share between teams. It is a different way of reorganising staff to achieve maximum benefit.

Deputy Deirdre Clune

Will the moratorium affect the staffing of the teams?

Ms Laverne McGuinness

Fortunately, on the moratorium, there is an exemption, particularly for the therapist and social worker grades. The Government recognised the strategic intent to shift from secondary care to primary care to community care. It has protected social work and therapy services because it wants to move in this direction.

Deputy Deirdre Clune

Originally there were ten pilot schemes. Were any lessons learned from them?

Ms Laverne McGuinness

Yes, there were initial pilot schemes and we are carrying out an evaluation. The teams currently functioning are being evaluated by our population health department and the evaluation will be completed in June. Some teams developed dedicated diabetes clinics and others have end-of-life care or wound clinics. We want to reach a standard whereby, say, wound clinics are made available by every primary care team and diabetes clinics are run between two or three teams as part of the wider network. The other factor is the efficacy of the preventative aspect. Part of the strategy is to ensure that, rather than going on a journey to a hospital, people can access services as close to home as possible.

We have also done several launches of primary care teams throughout the country to create public awareness. The public have been invited to those to make them aware of the primary care teams and the services being made available to people throughout the country. The launches have been very successful and will continue as part of our work programme in 2009. We have heard from patient advocates who have attended how beneficial the primary care teams are in addressing their needs.

Deputy Deirdre Clune

Has there been an improvement or change in the connection and communication between the primary care teams and the hospitals?

Ms Laverne McGuinness

There are several different connection points. Nurses are a key link, and GPs are another in terms of access to diagnostics. We have developed community intervention teams, and a nurse acts as a link between the community intervention team, the hospital and the community. Some of our nursing staff from the primary care teams, for example in Roscrea, have gone into hospitals to assist with the area of delayed discharge. However, there is still relationship-building to be done.

Professor Brendan Drumm

Deputy Clune has touched on the biggest challenge to the teams' success. For most of our staff, a huge amount of what they do on the acute side is within hospital walls. Mallow is a good example. If we cannot get the staff there to take services out, even diagnostic services, the approach will fail. Until now, hospitals have seen no place in the community where they could go out and treat their diabetic patients. That was the job of GPs, dieticians and others. At least hospitals will now have places where they can go to provide their services. However, Deputy Clune is right to suggest that breaking down the hospital walls is probably the biggest step we now have to take. It is a massive change for our staff to see that, instead of going to work in a hospital every day, they might drive to a primary care centre to provide what was traditionally a hospital-based service.

Deputy Deirdre Clune

Has there been a change of policy on how they operate or is this something the HSE hopes to do? Does it depend on particular units or individuals? The position needs to be stronger than that, does it not?

Professor Brendan Drumm

The Deputy is right. It needs to be stronger than that, but much of it will come down to care pathways. Most of what we deal with is chronic illness. Most of it involves the elderly and the diagnosis of chronic lung disease, diabetes and strokes. Through the new clinical directors, we will establish care pathways, so people will know that if a patient turns up in hospital with diabetes or a stroke, there is a standard pathway they should follow. That standard pathway will include the fact that they should be back out in their community as quickly as possible and that any therapy they require should follow them there. How advanced are we in developing standardised care pathways? We are only at the beginning, but we think it can be accelerated fairly quickly based on the new consultant contract and the huge buy-in we now have from clinical directors. Also, as we measure hospitals' performance, they have an incentive to move people out, because the average length of stay is now a big performance measure. However, Deputy Clune is right; it is early days and there is much to be done.

Deputy Deirdre Clune

I can see the value of the approach. The reconfiguration of hospital services is another major part of the change structure. The Comptroller and Auditor General's report states:

A number of critical dependencies will need to be managed as part of the overall project management including putting appropriate community support in place, enhancing the ambulance service, developing the infrastructure in Drogheda and resolving human resources/industrial relations issues.

The report specifically mentions the north east and the mid-west. I know this is historical and that changes have been put in place under the reconfiguration, but what lessons has the HSE learned? We are facing into the Cork-Kerry reconfiguration, about which there has been a great deal of controversy in the media, and there is concern about the confidence of the local community. It is essential to have the changes in place before any services are taken from the hospitals.

Professor Brendan Drumm

We have learned a great deal. One of the first things we learned is that we need local clinicians to be up-front in accepting the need for change. The hospital infrastructure was to change 40 or 50 years ago under the Fitzgerald report. We are now changing it, some 50 years after the original suggestion. I could be pejorative and say that, historically, the biggest preservers of the hospital infrastructure and the biggest inhibitor of change has been clinicians, who had their own fiefdoms in local hospitals. We learned from our earlier directions that we absolutely needed to bring clinicians on side. We have always succeeded and made the most headway where we have done that. We start from the point that nobody wants to change.

We have learned that trying to enforce change without figures is a waste of time, so we have quoted the amount of money that has been spent and the amount of activity in a hospital and said this cannot be justified based on the overall needs of the people in the area — the north east or the mid-west, for example. We have asked people to think of the benefits that would come to local people if the money was reinvested centrally into an organised structure. We have shown people that paying up to €4,000 or €5,000 a night in doctors' overtime in an institution that has not done an overnight piece of surgery in three years is not a return for the taxpayer. That does happen. As we have rolled out those figures, we have gained a huge amount of clinician buy-in to the need for change.

The public are hugely frightened by messages that go out saying their services are going to be withdrawn and everybody will die at the side of the street. Often, such messages are put out irresponsibly, even by people who work in the services. We face a huge battle in trying to reassure the public. We have learned that there is a constant need to reassure people. Deputy Clune is right. One of the challenges is to ensure that most of the changes occur at a time when we have already backed up the services. That is now a bigger challenge. In the mid-west, for example, we invested in putting in the advanced ambulance people and we were able to invest in many changes in the north east as well, but in future we might not have as much liberty because we will need to see the savings and reinvest them. Up to now, we have been able to cover that, but for a year or two, until the savings come back into the system, that will be a bigger struggle.

Deputy Deirdre Clune

Will there be a different approach in Cork-Kerry?

Professor Brendan Drumm

Ann Doherty is the person to answer that.

Ms Ann Doherty

As the Deputy knows, Professor John Higgins is the clinical lead for the reconfiguration in the south. One funding resource that is available to us this year is the innovation money. I think the report mentions using it as a seed fund to front-end some of the changes that need to happen. Once the changes are in place and we have realised the money to invest full time in those services, we can roll the money on to another area. Professor Higgins is working with all the stakeholders and communicating the changes that need to happen so they are understood, and some money has been earmarked to help the changes to happen. As they happen and we change the profile of the service, we will be able to put in the full resource behind it. That is not dissimilar to what we are doing in the mid-west and the north east. It is just that it is not a permanent resource. It is an enabling resource that will then be moved on to the next need.

Professor Brendan Drumm

We have the audit of the first months of the change at Ennis and Nenagh. In essence, overall attendance — not admissions — at accident and emergency in Limerick increased by 4.7 patients per day and out-of-hours attendance increased by 7 patients per day, so the number of patients attending out of hours increased by more than the overall number of patients. In Clare and north Tipperary, numbers increased by 4.6 and 1.6 per day, respectively. That is the number of people travelling to Limerick to be seen in the accident and emergency unit as against the reports that the world would fall apart. I put that information before the committee. Sometimes change is not as great as we perceive it to be. We need to work with the public to try to get that message out.

Deputy Deirdre Clune

That is very important. On the issue of change and the transfer of breast care services from the South Infirmary Hospital to Cork University Hospital, we have had correspondence to this committee and a response from Professor Tom Keane. There is much concern about the costs and the timeframe. We are informed that €5 million has been allocated for the transfer of the breast care services from the South Infirmary Hospital to Cork University Hospital and yet a letter, dated September 2008, from Mr. John Magner to Mr. Tony McNamara, CUH, sought an estimate of the costs because no funding had been available for these developments. Will Professor Drumm explain the up-to-date position and whether an estimate is in place for the transfer and, if so, what the capital costs will be?

Professor Brendan Drumm

The capital costs were outlined in Professor Tom Keane's letter in terms of redevelopments at CUH. The bottom line is that when the cancer control programme was set up, the HSE committed to Government that it would implement that programme and fully supports it. The change required in the cancer control programme, so far as we are concerned, is fully funded. I have no reason to believe the capital requirements in CUH will not be delivered on time to support that programme.

Deputy Deirdre Clune

On that point, an estimate of costs was sought in September 2008. Has that estimate been provided?

Professor Brendan Drumm

That I do not know.

Deputy Deirdre Clune

There is no provision within the capital programme for these developments as of September 2008.

Professor Brendan Drumm

I will get somebody here to check it out for the Deputy.

Mr. Michael Scanlan

I am not sure if I can help. My understanding is that it was only in the last three or four weeks that approval was given for capital of about €5 million——

Deputy Deirdre Clune

Only in the last three or four weeks?

Mr. Michael Scanlan

It was only very recently. What the Deputy is reading——

Deputy Deirdre Clune

September 2008.

Mr. Michael Scanlan

There have been recent developments. I think a figure of €5 million was allocated to sign a contract for that programme down south.

Professor Brendan Drumm

I will confirm it for the Deputy in a moment. Mr. Brian Gilroy is checking it.

Deputy Deirdre Clune

Is that on target for August 2009?

Professor Brendan Drumm

Yes, the target will be met.

Deputy Deirdre Clune

The target will be met but will——

Professor Brendan Drumm

There is a big reconfiguration of a ward there together with the diagnostics as well as the out-patient and ambulatory support.

Deputy Deirdre Clune

There is much concern around the BreastCheck unit which is being developed at a cost of €10.3 million on a site which is a new build since December 2007. Is it intended to move this unit which is in a brand new building? To the general public, it appears to be such a waste of money when resources could have been used more efficiently.

Professor Brendan Drumm

I think Professor Tom Keane's letter alludes to it. First, BreastCheck is a separate organisation. The Deputy is correct. If we were starting from today I am sure everybody would have done it differently in terms of that investment. We have to accept that there was no cancer control programme in 2002. The cancer control programme has come in and is being driven, certainly by the HSE and the Department with full support. We have all fully bought into it. The honest answer to the Deputy's question is that we have a unit that is on a different site. I hope the HSE will be able to work with the breast screening board to begin to look at how that could be optimally utilised going forward. It is their decision as to whether BreastCheck moves. If it moves, clearly we do not want to end up with a fabulous building that is not utilised by the health services. The Deputy will be aware that we are working very closely with the board of the South Infirmary Hospital to move significant services from Cork University Hospital, which have to move, if the whole thing is to work. Services such as plastics and so on will move out of Cork University Hospital. We have to look at how that facility could be utilised if it becomes available. There will be a tremendous amount of work in moving on to the South Infirmary site.

Deputy Deirdre Clune

On the transfer of the unit to Cork University Hospital, Professor Drumm is aware that much of the work is done in the South Infirmary Hospital. Many people would say this does not make economic sense. Why not establish the BreastCheck services in the South Infirmary Hospital off campus but answerable to the cancer centre? Has that approach been looked at?

Professor Brendan Drumm

That is an idea that has been put forward everywhere. Can units work as satellites? Cork has probably the best set-up structure in Ireland in terms of a city and its population base. CUH is the most comprehensive health centre in the country and is the only hospital that essentially has every sub-specialty. Sometimes one hears it is a Dublin hospital but CUH has all the specialties such as radiotherapy, plastic, reconfiguration and so on, on site. For a city the size of Cork, with an ideal catchment area for running a health service as a single unit, there is no doubt that it is better for people if they are attending a site where all those services are available on the single site. Is there a cost? At start up, there is a cost. Looking five years down the line at whether it is a much better outcome, there is no doubt that it is. It is the best outcome. The money was there at the time to do it and we did it. It is part of a project in a wider sense, outside of cancer. I can see health services in Cork evolve into a really exciting structure.

Deputy Deirdre Clune

What has Professor Drumm to say specifically on the issue of breast cancer services off site?

Professor Brendan Drumm

It is not ideal. In the case of cancer services, one wants to be able to go in and have all the diagnostic people, the plastic reconstructive people, the radiotherapy people, the oncologist on site as well as the surgeons, a major part of whose work at present is provided at the South Infirmary Hospital. It is back to what is convenient for patients and ultimately the convenience of patients in this structure will be superb. That is not to say that patients who make the move to attend the South Infirmary Hospital will not be delighted with the care they have got. We appeared before the joint committee recently and Deputy Flynn made the point that the people of Castlebar who have taken up the service since it moved to Galway are delighted with the service they are getting. Ultimately, it is a much better service, it is comprehensive service and on one site. The change is difficult for everybody involved.

Deputy Deirdre Clune

I thank Professor Drumm.

Deputy Darragh O’Brien

I will turn first to the Department of Health and Children and ask about its staffing levels. I will put the same question to the HSE. What are the staffing levels within the Department of Health and Children for the years 2006, 2007 and 2008 and the increases or decreases, year on year?

Mr. Michael Scanlan

I have a graph in front of me rather than figures so I am trying to read the graph. There has been a 20% reduction in the numbers employed in the Department since the end of 2002. In 2004, there were approximately 650 members of staff, by 2007 the number was just under 600 and in March 2009, just under 550, at approximately 536. The staffing levels have been coming down. In fairness, that covers a whole mix of things happening. For example, the staff of GRO left the Department and transferred to the Department of Social and Family Affairs.

Deputy Darragh O’Brien

What is GRO?

Mr. Michael Scanlan

The General Registration Office — the register of births, marriages and deaths.

Deputy Darragh O’Brien

Fine.

Mr. Michael Scanlan

Equally, the staff in the child care programme that operated in the Department of Justice, Equality and Law Reform came into the Department and, more recently, we had the transfer of youth work staff from the Departments of Education and Science and Community, Rural and Gaeltacht Affairs to the Department. During the years staff have moved in and out but the top level figure is that the numbers have come down from 650 in 2004 to 536 now.

Deputy Darragh O’Brien

My question is to Professor Drumm. In December 2008 the Health Service Executive had a workforce of approximately 111,000. His correspondence to the committee of 1 May states that the management-administrative grades equate to just over 18,000 or 16%. There are 39,000 nurses and 18,000 administration-management staff. Will he answer the first question again on the staffing levels in 2006, 2007 and 2008. Has any reduction been targeted in that area?

Professor Brendan Drumm

The only increase in staffing that we would be allowed would be in regard to specific developments that the Government put in place. We have not put in any extra posts above the ceiling. I can probably give the Deputy the exact figures; I will come back to him in a moment. There are the 2007 and 2008 figures and the 2006 and 2007 figures. Regarding the response we have given the Deputy, it is extremely important to bring clarity to that. I have heard mention on the airwaves that 49% of people——

Deputy Darragh O’Brien

That is why I am asking the question.

Professor Brendan Drumm

That just shows the level of mischief that goes on. Somebody sat down and added the figures for health and social care professionals and other patient and client care, which is mainly nursing assistants and home care providers, to the management-administration figure and came up with 49% even though of the totals we have indicated, and taking 17,000 or 18,000 as the management-administration figure, that means that 73% are clinical front-line people.

We have tried to point out to the committee that of the 17,000, the vast majority of them are the secretaries to consultants in the hospital or in the outpatient clinic who meet the patients. The number of back room people in the organisation is in the order of 4,000 to 5,000. The figure of 49% being played out in the media by health commentators and consultants is mischief and totally irresponsible. The figures are available and we will provide them to anybody. The management-administration total is 16% and most of that is front-line active staff, as we indicated in the note beside it. We will give the Deputy the figures for 2006 and 2007.

Deputy Darragh O’Brien

It is important to clarify that point and I am glad Professor Drumm did that. The management-administrative function within that is important also, and that is sometimes overlooked when people talk about administration as if it is not required.

Professor Brendan Drumm

How can an organisation of 110,000 or 112,000 people be run without any management? Even in regard to the 4,000 indicated, without a human resources or a finance component, as the Deputy said, it is incredible.

We accept the need to reduce our management-administrative figure across the system, especially in these times, and that is our major focus. We have given the Deputy the figures for the staffing across the hospital system, which he asked for, and I will continue to argue that we also must take up a huge challenge in terms of our staffing numbers on the front line.

Deputy Darragh O’Brien

In regard to benchmarking, how does the management-administration figure of 16% equate to comparable health systems in Britain or wherever?

Professor Brendan Drumm

If we look at Northern Ireland or Britain, we are below their administration level.

Deputy Darragh O’Brien

Has a target been set this year? Professor Drumm mentioned in his response that he is looking to reduce these numbers and gain efficiencies, particularly in non-front line services. Have targets been set for 2009?

Professor Brendan Drumm

Yes. In that regard we are very dependent on the voluntary redundancy scheme brought in by Government——

Deputy Darragh O’Brien

For those over the age of 50.

Professor Brendan Drumm

——because there is no point in us having targets if we do not have a way for people to leave our system. Initially, we saw our numbers dropping by approximately 2,000 people in the early wave of that scheme but we may well be significantly challenged by the numbers who come forward, which may be significantly above that.

Deputy Darragh O’Brien

Regarding the early retirement scheme that was announced, what has been the reaction to that within the HSE? Does Professor Drumm envisage a large take-up?

Professor Brendan Drumm

It is probably too early to say. Our director of human resources is here. Would it be appropriate if he were to answer that question?

Chairman

Yes.

Professor Brendan Drumm

He is Mr. Seán McGrath, who can give the committee much more detail than I can on that.

Mr. Seán McGrath

In regard to the voluntary severance scheme, we are awaiting some riding instructions from the Department on it to launch it officially. Anecdotally there are significant pockets of professionals interested in it including managerial, clerical and some in front line positions as well. As the Deputy is aware, it is targeted at staff over 50 years of age. Each case will have its own merits but until we officially launch it the take-up cannot be determined. However, the initial responses through our HR departments and through some line managers is that there are pockets people and pockets of professionals who are probably more likely to take it up or be interested in it initially, but it will be on an individual case basis.

Deputy Darragh O’Brien

I am not sure if this is a question for Mr. McGrath but what is the position on moving staff? Deputy Clune mentioned the primary care centres and there are some details in the correspondence about the difficulties the HSE has had in that regard. Since we met the representatives last year, how has that process improved? I am glad to hear it is pushing ahead in regard to primary care centres, which is crucial, but how is the procedure for moving staff into those primary care centres being managed and how successful has that been?

Mr. Seán McGrath

Overall, the movement of staff to the primary care teams has gone well for those we have created. A bigger issue arises to do with redeployment or reassignment of staff. The Government moratorium clearly sets out that there will be redeployment of our resources because in most cases we have a sufficient resource but we need to use it to the betterment of the patient. Our engagement with the trade unions on that is vitally important for us, be it through national partnership or through sectoral engagement that we have with them. We have had significant traction but, overall, we have no official agreement with the trade union movement to say we can move Seán McGrath from A to B.

Deputy Darragh O’Brien

The HSE has no agreement in that respect.

Mr. Seán McGrath

No.

Deputy Darragh O’Brien

This is crucially important because the HSE must manage it within the resources available to it. Page 6 of the HSE's response deals with the north east area and in terms of the example given it has clarified that. The HSE's letter of 1 May deals with some of the difficulties it had in the north-east area with moving staff. With no union agreement, how confident is the HSE in that regard?

Mr. Seán McGrath

To take the north east, for example, we are in a process with the Labour Relations Commission on that. There are localised activities that we are dealing with. I am referring to the issue nationally. We are making progress in certain areas, for example, in the mid-west or in the north east.

Professor Brendan Drumm

The Deputy is touching on what is a major issue for us. If the Deputy looks at the activity figures we have given for our hospitals and the number of staff, we can have 3,000 staff with 100 admissions. People thought that was an outlier. These are not outliers. These are standard across the system.

To return to Deputy Clune's point, we have a huge number of staff within our hospital structures. We have a great need to reconfigure the hospitals and to reconfigure the community in the absence of the capacity to redeploy people, within reason, because we cannot move people 50 and 100 miles. In the absence of the capacity to redeploy people without it involving major industrial relations negotiations at every turn, this will be a huge problem because it will be a massive change in terms of where we will provide our services.

The second issue the Deputy touched on is the voluntary severance scheme, which will involve savings to Government and not to us because those savings go back to Government, which we do not have a problem with — we always have a problem with money but——

Deputy Darragh O’Brien

The HSE has no choice.

Professor Brendan Drumm

——we have no choice. "Choice" is a good word but we must accept that. I am sure it will bring down our numbers but to give us a voluntary severance scheme, which will mean many people over 50 will be attracted to leaving the organisation, without being able to redeploy people with any ease is potentially a disaster, to be honest.

Chairman

Mr. Scanlan might like to come in on this issue.

Mr. Michael Scanlan

The Deputy has raised an important point in that if there is a moratorium on recruitment and a VER package were introduced, all that would happen is we would lose staff and services would suffer. Such thinking must be joined up with reform proposals, as the Deputy has done. We must return to consideration of management administration and there is scope to reduce our management administration. Professor Drumm knows this. There are initiatives under way in that respect. That would free up staff who could be redeployed to posts that would be vacated by people who want to leave. Such flexibility is necessary. I wanted to make that intervention. I am delighted to hear this debate taking place.

Chairman

The McKinsey report deals with management restructuring and an examination of regional structures or a reversing of the centralisation programme. Where is that report and what is happening on foot of it?

Professor Brendan Drumm

Our timing is good in this respect. We went public with an announcement to our staff yesterday that we are moving to establish administrative lead roles or management roles in four area levels based on the four areas currently in place. That means we will appoint four regional heads in those areas during the next few months who will drive the integration programme. It will not be a hospitals programme or a community programme. We will move to a regional structure.

Chairman

I am a little puzzled by this. We received information on the list of consultants hired. I note Mr. Molloy, a consultant, was hired. Is that correct? McKinsey & Company was brought on board to examine regional structures. The executive commissioned Professor Lyons to examine the same issues. How are the findings of all these reports coming together? A considerable amount of money was spent on the McKinsey report. Did it not cost almost €1 million?

Professor Brendan Drumm

I can deal with each of those. Mr. Eddie Molloy was with us for a relatively brief period in 2005 when the HSE was first established during which he worked out how the management processes within the HSE, as it then existed and operated, would work. A year or so later we executively drove forward towards adopting a model of integrated care, which was to bring together our hospitals and community to facilitate the movement of people across walls, so to speak. That was the work McKinsey & Company undertook. It examined how we would provide an integrated health service, the delivery of which has been a challenge across the world. We can be a leader in that area.

The work undertaken by Professor Lyons was different. He examined a process and how patients move through that process, in other words, in an integrated structure how the mid-west area would work when it would be reconfigured or how a diabetic or stroke patient would be dealt with. That work very much focused on how clinicians would engage with the system under an integrated model. The work undertaken by McKinsey & Company was very much based on how a management structure would be put in place to deliver an integrated approach. Therefore, there were differences in that respect.

Chairman

Where is the report?

Professor Brendan Drumm

The McKinsey report?

Chairman

Yes.

Professor Brendan Drumm

I suppose we can provide it to anybody.

Chairman

Could we have a copy of it because it cost in excess of €500,000 or even more. What was the exact cost of the report?

Professor Brendan Drumm

Approximately €1 million, I am told.

Chairman

Could the committee have a copy of that report to enable us gauge the thinking behind it?

Professor Brendan Drumm

Hopefully it will make a lot more sense now because we are moving to implement it.

Chairman

Deputy O'Brien can resume.

Deputy Darragh O’Brien

What Mr. Scanlan said about the redeployment and use of existing resources was interesting. Professor Drumm has stated clearly that the HSE is confident it will be able to deliver the primary care strategy, which obviously will be subject to dealing with staffing and union issues. I do not want to hear delegates from the Department of Health and Children and the HSE who appear before the committee next year advise us that this strategy could not be delivered because of the impact of an early retirement package and the consequent reduction in staff. The HSE is engaged with the unions, as is correct.

How can we have confidence that this strategy will be delivered by 2013 without the issue of staff redeployment being nailed down? I do not want to hear delegates report next year that owing to the introduction of the early retirement scheme, €X thousand has been lost in this area and another €X thousand has been lost in another area and that is the reason the strategy could not be delivered. I am sure these factors are being taken into account.

Professor Brendan Drumm

Absolutely, but it is a huge challenge. The first big challenge is to get the general practitioners, who probably pose the biggest challenge, to move from being sole traders, especially in a city environment. The incentives for general practitioners to engage in a rural environment are huge. They work on their own, often in isolated areas, they are at everybody's beck and call and a more comprehensive structure would give them advantages. In a city area, isolated GPs can often operate very easily on their own and are often much slower to coalesce to form a primary care team. That is a significant stumbling block, but work on this has been greatly moved forward by giving them control through a public private partnership-type approach of much of the infrastructure involved, as they would have already invested in their own.

In terms of reconfiguring our own teams, one of the advantages is that this is new infrastructure. We have five old buildings in Wexford town that no one would want to work in. Therapists are based in one building and social workers are based in another one. An incentive is presented with the infrastructure coming on line. We hope to reach a tipping point whereby the real driver for this will be the public. With our primary care teams structure, we will probably be delivering to close to 1 million people. As members of the public begin to say this is a service they want, everyone will begin to sign up to it. I cannot guarantee that we will not face stumbling blocks but we are confident in this respect.

Deputy Darragh O’Brien

I probably mistakenly indicated an extra two years for the delivery of that strategy. It is to be delivered by 2011, not 2013.

Professor Brendan Drumm

We will grab those. We have plans to put the infrastructure in place by that time.

Deputy Darragh O’Brien

I will deal with the property aspects of the portfolio shortly. Professor Drumm in his correspondence covered in some detail the sale of properties from which the proceeds are to be invested in mental health services. It related to the sale of St. Loman's. I understand the HSE requested those funds from the assistant secretary in the Department of Health and Children in January this year. I would like an update on that. Has the HSE received that money yet? When it receives it, what will it do with it? Why has the Department of Health and Children not given that money to the HSE yet? An official from the Department of Health and Children might reply to those questions first.

Mr. Michael Scanlan

That is an important question. The assistant secretary who requested it is seated to my left. The request was submitted to us and since we received it we have had discussions with the HSE. The HSE has taken away the submission just to tweak it. That is my understanding. The discussions took place with Mr. Gilroy, who is seated at the end of the table. As to why we have not handed over the money, as part of the process involved we have to seek sanction from the Department of Finance for the 2009 capital plan and this will be part of what we will submit to the Department of Finance. We will need the sanction of the Department of Finance to do this.

Deputy Darragh O’Brien

Mr. Scanlan has not sought sanction for that from the Department of Finance yet.

Mr. Michael Scanlan

No.

Deputy Darragh O’Brien

What did the Department have to discuss with the HSE? In 2006 it was effectively agreed that the sale of these properties would be invested in mental health and psychiatric services. Can one of the delegates clarify that?

Mr. Brian Gilroy

The lands were sold. The expressed view at the time, as articulated in the report, A Vision for Change, was that the sale of mental health service properties would be reinvested in suitable mental health services infrastructure. At that time A Vision for Change was only in the process of being adopted.

Chairman

It was more than a view or a commitment, it was Government policy at the time.

Mr. Brian Gilroy

Yes. After that happening, considerable work was involved aligning the infrastructure requirements in A Vision for Change with the capital plan for mental health services in place at that time. That took some time. The letter submitted to the Department of the Health and Children in January this year specifically concerned the proceeds of the sale of St. Loman's and outlined the planned reinvestment of only that money.

Deputy Darragh O’Brien

The proceeds of the sale of St. Loman's money was €36 million.

Mr. Brian Gilroy

Yes. Subsequent to receipt of that letter, work has been ongoing on the entire programme required for funding the implementation of A Vision for Change, which involves more than €350 million. It is a detailed programme setting out the full sale of lands of all the mental health institutions and the reinvestment of same. The follow-up to that it is hoped this programme will be back with the Department within the next two weeks.

Deputy Darragh O’Brien

Mr. Gilroy is dealing with the full basket of money for the programme between the two Departments and not only the €36 million proceeds of that sale.

Mr. Brian Gilroy

Yes.

Mr. Michael Scanlan

The other thing the Department of Finance must do is join up the €36 million. If we are ready to proceed with particular projects this year, we have to join that up with this year's capital plan. As the Deputy knows, the capital allocations were only settled recently after the supplementary budget, so we have had to review all that with Mr. Gilroy.

Deputy Darragh O’Brien

It is understood that things are changing, but one can take it that the €36 million is there and also the other €6 million. As the Chairman said, it was very clear that it was Government policy. We have a capital development programme for this year which deals in areas of psychiatric care. I am assuming that the money you have been discussing since January relates to investment in the capital programme for this year. Does it?

Mr. Michael Scanlan

It does. In fairness, times have moved on and the Chairman is absolutely right about Government policy. I do not want to speak for the Department of Finance but our capital——

Chairman

I am looking at the report of the Mental Health Commission and responses to the effect that there would be 200 community mental health facilities to replace the antiquated and much criticised facilities that were referred to in the report. Mr. Scanlan quoted 200 for 2009. That document was supplied to the Oireachtas Joint Committee on Health and Children on 24 March this year. How many of those 200 will be provided this year?

Mr. Michael Scanlan

I do not know. I do not have the details with me. I do not have that report. Mr. Gilroy may know. The only point I am making is that we have to get finance sanctioned for our total capital for this year, which would include what the Chairman is talking about.

Deputy Darragh O’Brien

I understand that completely, but I am saying that the request went from the HSE to the Department in January this year, prior to the supplementary budget, so what has happened from January to now? I am assuming the funding concerning the sale of those properties will go into the HSE's capital development programme. Am I wrong in saying that?

Mr. Brian Gilroy

The Deputy is correct. The reason the discussion has been ongoing is that we have identified in the submission the €36 million, which is the St. Loman's money, to be reinvested this year in mental health. However, the follow on to that is particularly because of the way the finances have moved. For example, I propose spending €6.4 million on a child and adolescent unit in Cork, but that project requires another €1.3 million next year. Therefore, although the reinvestment of the St. Loman's money will contribute to the €6.4 million, the reason for the discussions on the overall programme is that there is a subsequent spend. If I got the €36 million this year, it carries a liability into future years. The work we have been doing with the Department is to quantify that liability and identify how it would be funded. That is why the programme stretches. The €36 million will be across a variety of projects. Some will finish this year but most will carry on.

Deputy Darragh O’Brien

It is fully understood that the HSE must go to the Department of Finance. I realise that but when will the discussions between the HSE and the Department of Health and Children come to a conclusion?

Mr. Brian Gilroy

They have come to a conclusion and we are finalising our whole programme submission. As I said, we will have that in to the Department within the next two weeks.

Deputy Darragh O’Brien

Okay. Mr. Gilroy has obviously highlighted which projects are dependent on that money for delivery this year.

Mr. Brian Gilroy

Yes.

Deputy Darragh O’Brien

Which ones are dependent on that money?

Mr. Brian Gilroy

There are a number of child and adolescent units. There is one in Galway, one in Cork and one in St. Vincent's in Dublin. There is an acute mental health unit in Letterkenny and similarly in University College Hospital, Galway. There are residential units in Bloomfield in Dublin, Ballinasloe, Clonmel, Ardee and Grangegorman. There are community facilities in Mayo and Waterford. There are a series of day units in Dublin, Wexford, Tipperary and Louth.

Deputy Darragh O’Brien

Needless to say, substantial developments are depending on this.

Mr. Brian Gilroy

Yes, they are substantial across a number of projects.

Deputy Darragh O’Brien

Turning to the capital development programme itself, within what Mr. Gilroy has highlighted have we prioritised which developments can be done this year? Have they been front-loaded? What ones does he expect to be under construction this year?

Mr. Brian Gilroy

It is important to point out that with regard to the discussions on the capital plan, we do not have an approved capital plan for 2009. Because of the varying budgets, the intended Vote has been constantly under revision, so we are currently working on a revision of this. This was the plan as it stood in December 2008, but subsequent to that we have seen further reductions.

Deputy Darragh O’Brien

Do we have a plan now?

Mr. Brian Gilroy

We have a plan but it has not been approved by the Minister. The recut version of this plan will be back in the Department in the coming weeks and then it will go to the Minister and the Department of Finance.

Mr. Michael Scanlan

I can confirm that. In fairness to my Minister, she has not approved anything so I do not think it would be appropriate to comment on the projects.

Deputy Darragh O’Brien

I will come back later.

Chairman

Is the McKinsey report now Government policy? Has it been approved in total by the Government or what parts of it have? What is its status?

Professor Brendan Drumm

I should be clear about what McKinsey was asked to do. We proposed to go with an integrated model of care, which would connect hospitals and the community together. We asked McKinsey to validate with us whether that would stand up to international comparisons. Integrated care is the holy grail of systems across the world. We hear of Canadian and Australian systems which all suffer from the same thing, namely, no connection of any substance between hospitals and the community. We decided that we would go full out to do this within the HSE. We believe the island could allow us to do that. We needed somebody to validate that it would not send us off in a completely wrong direction. We would then use that validation to come to the Government and say "This is the direction we think we should be going in structurally.

We have brought in experts who have looked at it and have compared how it would work as against any models they have seen internationally". So McKinsey was not asked to do anything for us other than that work. We took that back to the Government and went through a lot of close interaction with the Department. The Secretary General can give his view on it.

Mr. Michael Scanlan

To broadly confirm what Professor Drumm is saying, the McKinsey report was not submitted to the Government as a policy issue or anything like that. We are talking about internal organisational structures. The Minister would be aware of and would support the structural changes, but Professor Drumm would be the first to say that structure alone will not deliver integrated care. It is just part of what one needs to do it, in fairness.

Professor Brendan Drumm

Absolutely. To return to Deputy Clune's points, the majority of this will ultimately be delivered by change in the way people operate. Equally, it is hard for people to sign up to change if the structure does not support that, but most of it is people change. We will provide you with that, Chairman.

Chairman

What concerns me is that this report cost over €1 million, but for the life of me I do not see what value for money the HSE got.

Professor Brendan Drumm

We have made reports in other areas. We made reports on reconfiguration of services in areas. We made reports in my own area on children's hospitals. The truth is that one could write an awful lot of them oneself, to be honest. They are not rocket science but the problem is that it is hard to get buy-in to the proposed change unless there is independent validation of it. To put it in context, we have given the committee a list of consultancies. Our organisation is essentially spending €15 billion a year, or thereabouts, and our spend on consultancies per annum is €15 million. In the overall context of what we do, I suspect it is absolutely tiny by comparison with any other organisation on a pro rata basis.

The constant criticism is that the €15 million could have gone to nursing or front-line services. If the committee examines the figures we have provided, one could argue that we should be spending far more to try to get efficiency from the system.

Chairman

I am not questioning that at all. I am speaking specifically about the McKinsey report.

Professor Brendan Drumm

One could argue that we could have come forward and said "That's the way we think it should work". We probably did most of that, so the Chairman is right.

However, in the real world, where we face resistance to change, it can be very hard to bring about a change of that magnitude. This is a massive change for this organisation without having validation of it. I would have sympathy with what the Chairman asked, that is, how much of it could he have written up in a day himself? I accept that is true with many of these reports.

Chairman

Was one person dealing with the McKinsey report being paid €10,000 per day?

Professor Brendan Drumm

Several people worked on the McKinsey report. It was done over a short period of time, so there were four or five people working on it. We can give the Chairman the breakdown. At times, there were four or five people, including clinicians and a number of international people from Canada and the UK, working on it. We would be happy to give the Chairman a breakdown. Much of what he said is right.

Deputy Róisín Shortall

I welcome our visitors. This committee's job is to ensure that taxpayers get value for money and the services they have a right to expect, given the massive spend in the Department of Health and Children and the HSE.

This committee's job is also to measure performance based on particular performance indicators. At the outset, Mr. Scanlan referred to some performance indicators such as life expectancy, survival rates from cancer and so on. I certainly welcome the progress made there. Equally valid in terms of performance indicators are the whole range of services the HSE is committed to providing and its performance in that regard. As public representatives, we are very conscious of the shortcomings in those services.

There is a whole range of major areas in which the HSE seems to be trundling along. Year after year, it comes back and makes excuses for poor performance in those areas. I am thinking of primary care, waiting times, step down beds, mental health services, intellectual disability services, drugs costs and all those key areas. The reality is that performance across all those areas and other areas has been pretty poor.

When applications are made for performance-related bonuses, all these areas are quoted in terms of work being done. However, when we look at what the performance has been in the previous year, it has been poor enough in those areas.

I know some of these areas have been touched on but I wish to ask some specific questions. I refer to the two key planks of service provision in regard to hospital care and primary care. I accept fully there is a policy element in this and that politics is involved but the main plank of health policy in respect of hospitals has been co-location, which is now in complete disarray.

The more important plank is primary care. Commitments were entered into in Towards 2016 in regard to primary care teams. Under that national agreement, we are supposed to have 400 primary care teams by this year. That is a very measurable performance. How many are there currently and how many are expected by the end of the year?

Professor Brendan Drumm

I will take the overall comment to start with which concerned shortcomings in services. I do not believe we have been making excuses for them. We have been very honest about where our shortcoming are. The Deputy identified some of them but we would differ on others.

For instance, we accept there have been huge problems with waiting times but nobody measured outpatient waiting times. We were the first to do so, and did so without being asked. We said we wanted honesty in the system and that we would bring down waiting times.

Deputy Róisín Shortall

We will come to that. Perhaps we will deal with the primary care teams.

Professor Brendan Drumm

Primary care teams were also mentioned. We could probably have 400 primary care teams up and running very quickly but we decided very early on what was a primary care team. We will have 400 primary care teams but at present, we have 110 properly structured primary care teams which we are auditing in terms of their performance. We could easily have moved ahead rapidly and said we have 400 people thrown together in clusters who are a team.

Deputy Róisín Shortall

I am not saying people thrown together.

Professor Brendan Drumm

I am explaining how we——

Deputy Róisín Shortall

The HSE was charged with the responsibility of providing 400 primary care teams.

Professor Brendan Drumm

We said we would not provide 400 fully functioning primary care teams to the standard we believe they should be provided. We set a standard and asked how many we could provide to an optimal standard. The answer is that by the end of this year, we will provide approximately 210 but they will be at a much more robust level. If one asks anybody engaged with them, they will say there is a huge degree of positivity about them.

The easier approach would have been to go with huge numbers and not have the robust structure in place. We made a judgment call to row back from that figure and put in the proper structure. We believe that is the right way to move forward and that they actually work better.

Deputy Róisín Shortall

We must measure against what the commitment was. By the end of this year, the HSE expects to have 210 out of 400 in place. It is over 50% of expected performance. That is very measurable.

Professor Brendan Drumm

I will go back to the point I made earlier about auditing what performance is. To be honest, I could generate 400 primary care teams without the slightest difficulty by the end of the year. If one wants them, one can have them. That is the easy answer.

Deputy Róisín Shortall

What does that mean?

Professor Brendan Drumm

It means one can call anything a team. One can call three people who drive to the same car park once a week a team. We said we would establish what the measures should be because that was never established. We said we would establish what a team should be. To us, a team is people meeting and having patient conferences on a weekly basis with everybody participating. That is a very different structure. We must be careful what we measure.

Deputy Róisín Shortall

The public suffers because of the huge gaps in services at community level. We are all only too conscious of those it seems because of a disagreement in regard to what a community care team means. What is the problem between what was signed up to under the national agreement and what Professor Drumm understands it to be? Can Mr. Scanlon explain that?

Mr. Michael Scanlan

I do not have Towards 2016 with me but I am sure the Deputy is right about the numbers. My memory of the commitment in Towards 2016 was 400 primary care teams in development. I recall when we were negotiating Towards 2016 that the view at the time was that if one went back to the primary care strategy, it had envisaged a wider approach to staffing the teams. Times had moved on and there were many staff in our community services already. What Towards 2016 was seen as doing was advancing a particular model of primary care teams.

What has happened since is, as Professor Drumm outlined, that more analysis was done of what exactly we mean by a primary care team. That is the essence of what he said. To that extent, there has been a smaller number reaching a higher standard.

Ms Laverne McGuinness

That is exactly it. It was that there would be 400 in development. "In development" means they would not hold clinical meetings. A primary care team can only function if it holds a clinical team meeting. What does that mean? It means that all the therapists, the public health nurse and the doctor will meet about a particular patient and look at the needs of that person. That is not what was envisaged in 2016 but rather teams in development.

When I spoke to Deputy Clune about the primary care team programme for 2009, I said that, by the end of this year, we would have 210 fully functioning primary care teams and another 100 in development. Those 2,700 staff currently in the system and any new staff will be mapped on to other teams. There will be more in development.

Currently, in addition to the 110 teams which are functioning, there are others which are in development and which will be fully functioning by the end of the year. Another 100 will then go into development. We will still be on stream to meet our target.

It was important that we had something which we could tangibly say to the public was a primary care team. If they developed all over the place, it would be very hard for the public to see what benefit it would get from them. Now we can say a large number of them have diabetes clinics and offer wound assessment and home therapy services. Occupational therapists are visiting people who are well enough to receive treatment at home. As a result, these individuals are not obliged to attend hospital in order to avail of the service.

Deputy Róisín Shortall

We all agree with the theory in that regard. Under the agreement, there are supposed to be 500 in place by next year. However, the HSE is falling far short of that. The reality is, however, that for many people there is only a theoretical primary care service available. That is not much good if one is seeking the services of an occupational therapist, if one needs someone to visit one's home to change one's dressings or if one requires home help.

Professor Brendan Drumm

If 3 million or 4 million people were covered by primary care teams by the end of this programme, we would be light years ahead with regard to the pace of change we brought to the system as compared to any other system. This is an immense change programme for everyone involved. We could never state that fully robust primary care teams would be up and running throughout the country in three to four years. We could use the term that such teams would be "in development" and I have no difficulty in doing so.

Deputy Róisín Shortall

Is Mr. Scanlan of the view that the target set in this regard is completely unrealistic?

Mr. Michael Scanlan

No, I do not accept that. At the time I took advice from within the HSE with regard to what the term "in development" means. The view was that one could deliver that number of teams — to the requisite standard — over the period in question.

Deputy Róisín Shortall

Where does the public come into this argument between the Department and the HSE?

Professor Brendan Drumm

It is not an argument with the Department.

Deputy Róisín Shortall

Members of the public are seeking services but these are not available to them. The HSE was given the responsibility of providing the primary care teams and it has not done so.

Professor Brendan Drumm

There are many matters for which we will accept responsibility. The primary care team programme has been extremely successful. Some 18 months ago practitioners and everyone else informed us that the programme would never be successful. However, the infrastructure plan that will come into place in 2011 is already complete. There are very few programmes in this country that are being driven as successfully as that relating to primary care.

Deputy Róisín Shortall

For 50% of what was originally envisaged.

Professor Brendan Drumm

We will put in place robust teams. If people want us to deliver 400 or 500 teams that will be classed as being "in development", we will do so.

Chairman

The discussion is becoming repetitive.

Professor Brendan Drumm

We could do that but we want the teams we put in place to be robust.

Deputy Róisín Shortall

In my view, and by any standard, the HSE's performance in this regard is poor. Unfortunately, the public will be obliged to pay the price.

Only seven hospitals met the target of ensuring that people should be obliged to wait less than 90 days for an outpatient appointment. What is the HSE doing with regard to dealing with this problem?

Professor Brendan Drumm

I reiterate that ours is the first organisation which ever measured it. We never asked the question relating to this matter on a previous question. The HSE is the first organisation to ever measure outpatient waiting times. We came to the conclusion that the mechanism we were using to measure access to the system was not accurate. What we were measuring at the time was the length of time people were waiting for procedures. We knew that we were going to be beating ourselves up by doing so but we decided to put in place a new system of measurement.

Deputy Róisín Shortall

What action is the HSE taking with regard to the fact that waiting times are so long?

Professor Brendan Drumm

We have a major programme of change in place in our hospitals. We are targeting every waiting list and ensuring that professional people in those hospitals will provide additional clinics. In certain hospitals, there has already been a significant reduction in waiting times. We have asked all the hospitals to reach particular targets by the end of the year. The targets in question will vary from hospital to hospital. I am confident that there will be a dramatic reduction in outpatient waiting times during the next 18 months. Much of this will be based on the fact that we have targeted the problem and, for the first time ever, measured it. The organisation can be very proud of the fact that it has taken on what could have been seen as something it wanted to hide. Instead, we have put it up front, set targets and directed the National Hospitals Office to put in place processes.

We have engaged in a benchmarking process throughout the country which will identify the number of new patients seen by each consultant in a clinic. For the past 40 years, no one in our hospitals knew what anybody was doing in respect of their activity levels. We will be setting targets which will show people what they must achieve in the context of the number of new patients they must see. Those targets will be absolutely fair because they will be informed by what those who are providing the best service are achieving. From one consultant-led clinic to another, there has already been a fourfold, fivefold or sixfold improvement in the number of new patients being seen.

Deputy Róisín Shortall

On intellectual disability and mental health services, when Professor Drumm came before the committee last year, I asked him about a situation that existed at St. Peter's centre in Castlepollard. A number of the patients at the centre were awaiting the provision of community residential services. In 1998, the then health board purchased and refurbished three houses but these lay idle for ten years while people were waiting for appropriate and decent living conditions. Following the committee's consideration of the matter and a great deal of media attention, money was allocated — some €400,000 — to refurbish those houses for the second time and suitable clients were identified and assessed. These individuals were informed that they would be living in the houses in question by December last. This did not prove to be the case and they were informed that they would be living in them by last month. Last week, the families of the people concerned were informed that regrettably the HSE does not have adequate staff resources to allow it to open the houses. In light of the fact that almost 11 years has passed since these dwellings were purchased, what does the HSE intend to do about them?

Ms Laverne McGuinness

The houses in question were bought by one of the former health boards in conjunction with Mullingar housing association. The Deputy is correct that the committee addressed this matter on a previous occasion. The cost of renovation was €508,000. That money has been spent, the renovations have been carried out and there are some 17 clients to move. The process of prioritising the clients in the context of which houses they will be placed in has already been dealt with. There are human resource requirements in this regard. The reason for this is that if people are being cared for in larger facilities, fewer staff are required than would be the case if they are living in individual houses. We have identified the human resource requirements and we are working through resolving the position in this regard in light of Government policy on the moratorium on recruitment. That is the current position.

Deputy Róisín Shortall

When I raised this matter last year, I was informed that it was not the fault of the HSE but rather that of the former health boards. I was also informed that a lax system under which properties were bought and refurbished had previously been in place and that this operated independent of any commitment to having the necessary staff available. I was further informed that this was the old way of operating but that the HSE was now running matters in a much more planned way. In the interim, the additional money to which I refer was spent but the HSE still does not appear to have the necessary staff available.

Ms Laverne McGuinness

The first issue in this regard is that we were obliged to save that money in order to spend it. We managed to do this in respect of the capital renovation. However, there is a moratorium in place in respect of recruitment and we are obliged to operate within the parameters of that moratorium. We will now have to consider the matter to which Deputy O'Brien referred, namely, how to redeploy staff to these houses from other facilities. It is now a matter of redeployment because, under the moratorium, we cannot recruit new staff. We are not just talking about therapy staff for this particular assignment. That has some implications for it.

Deputy Róisín Shortall

A substantial sum of money was spent on refurbishing these properties for the second time without the HSE having secured the services of the necessary staff.

Ms Laverne McGuinness

The moratorium is impacting in respect of this matter. The moratorium only came into——

Deputy Róisín Shortall

When will these clients be transferred to the houses in question?

Ms Laverne McGuinness

At the time we stated that the renovations would be completed, the plan was that the clients would move into the houses towards the end of April. However, the moratorium was put in place at the end of March. That has slowed matters down somewhat. This does not mean that we are throwing the plan out or that the clients will not be transferred to this new accommodation. We need to discover how we can redeploy staff to the houses in question because under the moratorium we cannot bring on board the new staff we require.

Deputy Róisín Shortall

This is a repeat of what happened 11 years ago.

Ms Laverne McGuinness

It is quite different.

Deputy Róisín Shortall

The bottom line for the clients is that proper facilities are not available for them. A promise was made to their families in this regard. From the point of view of the taxpayer, a substantial amount of money was paid out on refurbishing these three houses but the HSE did not secure the necessary staff to allow them to be opened. For how long more will they lie idle?

Ms Laverne McGuinness

That is not the issue. We cannot recruit the new staff necessary to relocate the clients to the houses in question. We now have to go back and try to redeploy staff. To do that, we have to go through several union negotiations. We cannot reassign people — that is the issue that was raised in the House — from one place to the other unless we successfully negotiate with them and their unions. This is a result of the moratorium but our intention most sincerely is to move as quickly as we can to facilitate the clients——

Deputy Róisín Shortall

Can Ms McGuinness anticipate a date?

Ms Laverne McGuinness

I cannot at this stage until I find out if there is a successful conclusion to the negotiations. I cannot give a date.

Deputy Róisín Shortall

This is nonsense. This is again about one hand not knowing what the other is doing.

Professor Brendan Drumm

No.

Deputy Róisín Shortall

The HSE proceeded to spend money on a facility without having secured the necessary staff.

Professor Brendan Drumm

No, the moratorium came into play. We accept it. How were we to predict the moratorium? That is not being fair.

Deputy Róisín Shortall

It is not fair on clients who need decent, modern facilities.

Professor Brendan Drumm

Let us not use the clients unfairly here.

Deputy Róisín Shortall

The reality is they have been waiting 11 years for this facility and there has been a great deal of taxpayer's money——

Professor Brendan Drumm

Is the Deputy blaming us for not predicting the moratorium?

Deputy Róisín Shortall

The HSE should have secured the necessary staff, given it has spent more than €500,000 refurbishing this facility for the second time.

Professor Brendan Drumm

We cannot employ the necessary staff. I will not play games on this. We do not deal with the moratorium. It is Government policy; we accept it.

Chairman

It is inappropriate to use the word "games". Deputy Shortall is asking valid questions.

Professor Brendan Drumm

I withdraw that.

Chairman

The building was scheduled to be completed a few weeks ago. Surely at that stage, the HSE should have had the arrangements in place before the moratorium, which is only in place a matter of weeks.

Professor Brendan Drumm

Under the moratorium, we cannot appoint people——

Chairman

I am talking about prior to the moratorium. The building was scheduled to be completed in December. A moratorium was not in place at that stage. Surely the staffing arrangements should have been in place. Professor Drumm should not allege that people are playing games.

Professor Brendan Drumm

We will not use the moratorium other than to apply it as Government policy. We should be able to redeploy staff to this facility and give the committee a date. We cannot do that.

Chairman

No, the HSE should have had staff in place prior to the moratorium if business was done correctly. The staff should have been in place because the building was completed in December. It is almost a re-run of other projects around the country.

Professor Brendan Drumm

The building was completed in April. We did not deploy staff before the completion of the building.

Chairman

The moratorium was not introduced until 28 March.

Deputy Róisín Shortall

The HSE should have negotiated that. It claimed industrial relations difficulties as well in 1998.

Professor Brendan Drumm

What should we have negotiated?

Deputy Róisín Shortall

The redeployment of staff to the facility if the HSE was spending all this money on it.

Ms Laverne McGuinness

The last time we appeared before the committee there was not even money to do these renovations. That is the reality.

Deputy Róisín Shortall

The money had been spent ten years previously and it never opened.

Ms Laverne McGuinness

I cannot get into that. The money had not been spent. We had to go to tender to secure the redesign of this particular premises. That happened in October. We said it would be ready in April. That has been done. We had identified the staffing, we had prioritised the clients who would go there and, with the moratorium, which we fully accept is Government policy, the reality is even if somebody was available to start work on the Monday and Tuesday, that did not go ahead. It did not come into effect until 25 March. One could have had a contract almost set up for somebody to start on the following Tuesday but it did not happen.

We are now looking locally to see how we can assign staff to redeploy them to go in there but we have to negotiate that and, unfortunately, that takes times. We are talking about a number of weeks before we will have that in place. I know full well that families are looking to have their people moved into these houses and we are working to find an arrangement that we can implement as quickly as we can. It takes time when one is negotiating with unions and local staff on redeployment.

Deputy Róisín Shortall

It is highly unsatisfactory. We will have to go through this again.

Chairman

How many other health units are completed but empty because of the moratorium or because arrangements were not made while the projects were being undertaken? Two facilities on the northside of Cork city are built and empty.

Professor Brendan Drumm

If the arrangements had been in place, we could not overcome the moratorium because the people who have even completed interviews cannot be appointed. The arrangements——

Chairman

The two units to which I referred have been completed for some time. People should have been appointed prior to their completion in order that they could be in situ when they were completed.

Professor Brendan Drumm

If they have not taken up their posts, we cannot——

Chairman

I would like a report on all units that are vacant because of the moratorium or where arrangements were in place.

Mr. Brian Gilroy

We provided in the response a list of vacant premises we have.

Chairman

I refer to newly built or reconstructed premises that are lying idle because of staffing problems.

Mr. Brian Gilroy

Which units is the Chairman referring to in Cork?

Chairman

Teach Mhuire and Ross House in Mayfield. They are side by side.

Mr. Brian Gilroy

We can come back with answers on those and any of the ones that currently——

Chairman

They are only two examples and one wonders how many more newly built structures or units are lying idle.

Deputy Róisín Shortall

I refer to mental health facilities and intellectual disability services. The HSE's performance in delivering A Vision for Change is very poor. Its performance is also very poor on the commitment that all proceeds from the sale of such facilities would be ploughed back into modern services. What is the position on St. Brendan's? It is many years since the decision was taken at Eastern Health Board level. I was on the health board in the mid-1990s when the decision was taken to dispose of St. Brendan's and to reinvest the proceeds in modern day services.

Mr. Brian Gilroy

That has been superseded by the Grangegorman Development Agency Act 2005.

Deputy Róisín Shortall

How much did the HSE generate from that valuable tract of land?

Mr. Brian Gilroy

The Act requires us to transfer the lands to the agency for it to develop the DIT campus and health facilities on those lands.

Deputy Róisín Shortall

Will the HSE not receive any of the proceeds?

Mr. Brian Gilroy

The lands are not being sold. None of the land has been sold yet. The agency is currently working through the master planning of the site, which will have the DIT campus and the community and health facilities. We are working closely with the agency. I am a member of the agency board and there are proposals there but because of the way funding has changed, I cannot give a clear answer about how it will play out. However, we are working through proposals with the Department and the Department of Finance ultimately.

Deputy Róisín Shortall

Does Mr. Gilroy know anything about what the HSE will get out of that deal?

Mr. Brian Gilroy

Yes, about what is proposed, which is what the agency board has passed. There is a commercial element to the overall site and the yield will return to the health service for reinvestment in mental health.

Deputy Róisín Shortall

What value has been put on that?

Mr. Brian Gilroy

Assuming we are looking to take out the yield in a couple of years, the expectation is it will be in excess of €50 million.

Deputy Róisín Shortall

Is Mr. Gilroy saying that will then be put into services?

Mr. Brian Gilroy

That is included in the list I referenced about the expanded letter on which we are working with the Department around A Vision for Change. That is just one element.

Deputy Róisín Shortall

Will Mr. Gilroy provide the committee with a list of the moneys accruing to the HSE from the disposal of all similar properties in recent years?

Mr. Brian Gilroy

Yes, we did that a few times.

Deputy Róisín Shortall

Can Mr. Scanlan reaffirm the Government's commitment that all the proceeds of the sale of old institutions will be reinvested in modern services?

Mr. Michael Scanlan

In what sense? It is not up to me to reaffirm it. That is Government policy.

Deputy Róisín Shortall

Is it still the intention that the proceeds from the sale of institutions and their lands would be reinvested in mental health and intellectual disability services?

Mr. Michael Scanlan

That will depend on what the Minister for Finance decides ultimately when we submit our capital plan for sanction.

Deputy Róisín Shortall

As far as Mr. Scanlan knows, is that still the policy?

Mr. Michael Scanlan

That would still be the Minister's wish; it is fair to say, or her policy.

Deputy Róisín Shortall

It would be interesting to see those figures if we could have them. I want to ask the Secretary General about drugs costs following the striking down by the courts of the Department's proposals regarding pharmacists last year. What is the Department's intention now with regard to reducing the cost of drugs?

Professor Brendan Drumm

We made proposals but I am not sure if they were struck down. We were told that the power had not transferred to the HSE from the Department of Health and Children, that it was a technicality. Those proposals faced huge resistance not least in the Dáil and from the public at large. We found massive resistance to the attempt to reduce the drugs bill.

Deputy Róisín Shortall

What are the HSE's plans now to reduce the drugs bill?

Professor Brendan Drumm

The court made it clear such power lay with the Department of Health and Children.

Mr. Michael Scanlan

Sorry, Deputy, I think the correct title is the Financial Emergency Measures in the Public Interest Act 2009 which provided for our Minister, although some other Ministers as well, to go through a process that was laid down very carefully in the Act to review the payments made to a whole series of professionals. I must be careful about what I say because of what happened in the past but we have completed that process in the case of several of those groups. The Minister made her decisions in that respect and my memory is that as recently as last Friday, some of the statutory instruments, the regulations that are required, were signed by both Ministers and that has been promulgated. The Minister is about to make a final decision with regard to pharmacists and I would not wish to say any more than that here today but the Deputy will have an answer to that question very shortly.

Deputy Róisín Shortall

When we discussed this last year there was general agreement that the mark-up by pharmacists was only one element in the cost of drugs. We talked about the need for more generic prescribing and about the problem of over-prescribing by GPs. I raised the issue about incentivising the prescribing of certain drugs by pharmaceutical companies and the need to address the ethical issues that would have been involved for GPs. Has any progress been made in those areas?

Professor Brendan Drumm

We made progress in some areas. Generic prescribing as it stands in Ireland will deliver minimum savings because generics are priced practically to the same level as off-patent drugs. We had an agreement which has been fulfilled by the manufacturers, called the IPHA agreement, which has delivered very significant savings to us over the past three years and it has brought down the cost of non-patented drugs by 35%. This was an agreement between ourselves and the manufacturers while this agreement came with the wholesalers and the retailers who are the same bodies anyway in most cases. In essence, we have brought the price of non-off patent drugs massively down and in fact generic drugs deliver very little on top of that, based on the current pricing of generic drugs.

We are working with a larger group including general practitioners to start examining the top five or seven drugs to see if we can reduce the expenditure on those by looking at prescribing practices. We are also looking at the issue of how we can incentivise, not only the use of generic drugs, which will not save that much, but also bringing down the price of generic drugs because the price of such drugs jumps from the production line to the front counter by probably 300% or 400% because of commercial arrangements in existence between the production line and the front counter. We have to find a way to change that. We need to bring down the price of generic drugs before significant savings are seen. We are working on those areas.

Chairman

There is a vote in the House. The committee will suspend business for it.

Sitting suspended at 12.45 p.m. and resumed at 1.15 p.m.

Chairman

Deputy Shortall has a few more questions to ask. We will try to finish by 2 o'clock if possible as I know many people have other commitments. We will need to reconvene as many issues are outstanding.

Deputy Róisín Shortall

My final question relates to the number of hospital beds. As of 13 April, 877 people inappropriately occupied acute beds. This is an area with very slow progress in terms of providing step-down beds and community services. What is happening on that front? Regarding the adequacy of the number of hospital beds, and arising from the budget and what would seem to be the abandonment of co-location, what now is the strategy of the Department of Health and Children on the provision of hospital beds?

Mr. Michael Scanlan

The Deputy mentioned earlier that co-location was a policy issue. All I will say on co-location is that when she references the budget I assume what the Deputy is talking about is the announcement by the Minister for Finance about the change in the tax. I am not sure if the finance Bill has been published yet, but the Budget Statement indicated that the normal transitional arrangements would apply. I just say that to the Deputy as a matter of fact.

In terms of hospital beds, yes, I have figures for the number of beds that are occupied by delayed discharges — to use that term — or with people inappropriately placed in them, and numbers that, I think, the HSE provided in terms of beds that are closed for any one of a number of different purposes. The same is true in any year. I think the figure is 1,400. That is certainly the total figure I saw, which is both the delayed discharges and bed closures.

Deputy Róisín Shortall

There were 877 delayed discharges.

Mr. Michael Scanlan

There are further beds that are actually closed.

Deputy Róisín Shortall

The vast majority of those are waiting for residential care places — step-down beds.

Mr. Michael Scanlan

Right. Professor Drumm is probably in a better position to tell the committee about the plans for providing the beds. From the point of view of the Department, the fair deal legislation needs to be enacted. I understand many of the people waiting for step-down beds are specifically waiting to get into public step-down beds, or into what we call "contract" beds. That is understandable, to be honest, because a different level of support applies depending on the type of bed one is in.

Deputy Róisín Shortall

When will we have the fair deal?

Mr. Michael Scanlan

The fair deal legislation is being considered by the Dáil at the moment. It is planned, subject to the decision of the Oireachtas, to have it in operation by 1 September this year.

Deputy Róisín Shortall

Is that still the case? It has been suggested that not enough money is available to implement it this year.

Mr. Michael Scanlan

Provision was made in this year's Estimate for part-year implementation. Issues may arise in respect of next year as a consequence of the changed fiscal environment. There is a definite intention to proceed with it.

Deputy Róisín Shortall

Fine. On the need for additional acute hospital beds, what is Mr. Scanlan's view of what, if anything, is likely to come from co-location at this stage? Are there alternative proposals for adding to the total number of hospital beds?

Mr. Michael Scanlan

I do not yet have a figure for the number of beds likely to emerge from co-location. It will depend on how the various projects proceed. Mr. Gilroy has been in closer contact with those who are proposing the developments at each of the sites. It is clear that the difficulties in the financial markets have had an impact on the capacity of such people to finance these projects. I do not have a view on how many beds will emerge from co-location. When I attended a meeting of this committee a year ago, I expressed the opinion that the number of beds does not matter as much as the number of patients who are treated appropriately in our acute hospitals. Some of the issues that were raised earlier, such as waiting times for access, are more important.

Deputy Róisín Shortall

The general acceptance that the number of beds was inadequate informed the Government's policy on co-location, for example. It was argued that the additional beds should be provided in the public sector. We do not seem to be making progress on any front; for example, the step-down beds.

Mr. Michael Scanlan

I agree with the Deputy that the policy of the Government was to increase the number of beds. That was to be done in two ways — through the co-location initiative and through the health capital programme. The fast-track initiative was developed to increase the number of step-down beds. HSE officials will confirm that extra beds have been brought into commission and are being constructed as we speak. I do not doubt that demand exceeds supply in certain parts of the country, such as the Dublin area.

Deputy Róisín Shortall

Would it be possible for Mr. Gilroy to update the committee on where things stand with co-location? Will we get any additional beds from that initiative?

Mr. Brian Gilroy

We have signed project agreements in respect of four hospital sites — Beaumont Hospital, the Mid-Western Regional Hospital in Dooradoyle, Cork University Hospital and St. James's Hospital. Matters have progressed to various stages at the other sites. The planning process is under way at all four of the sites where agreements have been signed. Planning permission has been granted in one case. Appeals to An Bord Pleanála are pending in two cases, with decisions expected in the coming weeks. The initial round of planning is taking place in the other case, which is St. James's Hospital. Since the project agreements were signed, the HSE has been engaged in intensive work. Like everyone else, we have been affected by the way things have panned out with the credit crisis. We have worked through the various requirements. A clause in each project agreement allows variations to be made to facilitate banking arrangements, if so required. That is what we are working on at the moment. That work is at an advanced stage.

Deputy Róisín Shortall

Perhaps Ms McGuinness from the HSE can update us on the step-down facilities and community care services.

Ms Laverne McGuinness

I will speak about step-down facilities and beds. According to the service plan, the overall programme for this year involves 1,207 beds. Some 492 of them are replacement beds and the rest are new beds. Some of the new beds are public fast-track beds and others are coming on stream as part of the normal capital initiative. There is a full schedule of them. None of them was planned to be on stream in the first quarter of the year. They will be developed in the second, third and final quarters of the year. Any revenue funding made available to open those beds is being used to purchase additional contract beds until the new building is in place. We have bought an additional 235 beds, the vast majority of which are in the Dublin, north-east and mid-Leinster areas, where we are encountering the bulk of our problems. They are all in place and are being occupied as we speak. We are operating at the full capacity for which we are given funds to provide beds. I understand that approximately 75% of delayed discharges are caused by having to wait for beds. I agree with Mr. Scanlan's remark that several families will not move their mothers, fathers or loved ones while they are waiting for a public contract bed. That is why the introduction of the fair deal is important.

We must bear in mind that, in addition to residential beds, there has been significant investment in home care packages and home help hours. In so far as it is possible, we are trying to keep older people at home, which is where they want to be, for as long as we can. There have been two recent developments under the winter initiative. Community intervention teams are being used to free up acute hospital beds, avoid hospital admissions and enable patients to come out of hospital more quickly. There are four community intervention teams in place, two in Dublin and two in Limerick. They cover a population of approximately 1 million. They have helped to avoid admissions and facilitated the early discharge of approximately 6,000 patients. It is significant that 4,000 of the patients in question were facilitated by the two Dublin teams. There is a range of initiatives. There is rapid access between St. Mary's Hospital and Smithfield. That is particularly aimed at older people. General practitioners and hospitals are consulted with the aim of avoiding admitting older people if it is more appropriate to treat them at St. Mary's and at the rapid access clinic. Approximately 7,000 people go through that in any given year, or 600 a month. It is a very significant development. Our ethos involves trying to keep people at home for as long as possible, through the provision of home care packages and home help hours. Approximately 8,700 people are currently availing of home care packages. Some 12 million home help hours are provided every year. That is really where the strategic intent is.

Deputy Róisín Shortall

What is the current position in respect of access to home care packages?

Ms Laverne McGuinness

The extent of access to home care packages is dictated by the size of the budget available to us. We are exceeding our target, which is to provide 8,700 packages, by providing almost 8,800 packages. It is budget-led. There is a funding cap on home care packages.

Deputy Róisín Shortall

I accept that. If 877 people are in acute beds inappropriately, massive costs are involved in that. If an adequate number of step-down beds and home care packages were provided, that would free things up in the acute hospitals.

Professor Brendan Drumm

That would be the case if we were to close those beds behind the people in question. There would be no savings. We have to fund the movement of such people into the community. People claim that money could be saved by eliminating the costs associated with these beds, but it would only become a saving if the beds in question were closed.

Deputy Róisín Shortall

If the beds were freed up, progress could be made with the waiting lists. The State would then not have to pay on the double through the National Treatment Purchase Fund. People would get their procedures done.

Professor Brendan Drumm

We do not have access to the National Treatment Purchase Fund money. We are concerned with the envelope of money we use. If we move people into the community, we cannot then equally fund the bed from which they are moved.

Deputy Róisín Shortall

No, but the HSE would be in a position to provide acute hospital care for more people who need it.

Professor Brendan Drumm

Yes, if we had the funds to do so.

Deputy Róisín Shortall

We would not pay on the double, through the National Treatment Purchase Fund.

Professor Brendan Drumm

If we had the funds to move people into the community, we would do so.

Deputy Róisín Shortall

I thought the whole idea of the HSE was that there would be no more turf wars within the health service.

Professor Brendan Drumm

Is the Deputy referring to a turf war between the HSE and the National Treatment Purchase Fund?

Deputy Róisín Shortall

We were promised a seamless health service, but we do not have it.

Professor Brendan Drumm

The Deputy is right to suggest that we seriously need to consider moving these people to the community and taking that funding out of the hospital side. It would have significant implications for the hospitals, however. It would be a more sensible approach.

Deputy Róisín Shortall

What is the Department's position on that?

Mr. Michael Scanlan

The Deputy has touched on a key point. It goes to the root of the issue of budgetary management, which is what this debate was initially about. When one is running a public health system, one tries to deliver the best service within a capped budget. Efficiency on its own is not enough for us. We always have to live within the budget we have. It is true that one could get better value in terms of those people. Obviously, they would get a better service if they were in a step-down bed. That would mean taking the money out, however. One cannot just leave the capacity behind and start to re-use it. We could not cope with that within our fixed budget.

Deputy Róisín Shortall

What about the point that the Department then pays on the double through the National Treatment Purchase Fund for people who are not able to get procedures done in public hospitals? There is a logjam in the acute hospitals.

Mr. Michael Scanlan

I am not sure it is true to say we are paying on the double. The NTPF was set up to concentrate on the so-called long waiters because the acute public hospital system was coping with so much of the waiting list but was not dealing with the long waiters. That was the main focus of the NTPF. I accept the Deputy's point that we still need to join up better the NTPF with whatever capacity we might be able to free up in our public hospital system. However, I have to say in that space that the Minister has given a clear direction to the NTPF that no more than 10% of its activity and spend is to take place in public hospitals. The reason for this was that previous experience suggested that money put into the public hospital system under the waiting list initiative became part of its core funding, whereas under the NTPF this money is targeted at particular individuals and follows the patient. One is trying to grapple with two legitimate policy objectives, it seems.

Deputy Róisín Shortall

The patient is losing out.

Chairman

Dr. Tony Holohan who was appointed chief medical officer late last year is with us. Patient safety is one of Dr. Holohan's responsibilities. Although I do not believe everything I read in the newspapers, one article by a reputable journalist published in the Irish Independent states that medics have left 821 objects inside surgical patients. What steps are being taken by the Department to deal with this serious issue?

The recent HealthStat figures show hospitals which fail to make the grade. One of the hospitals referred to by Professor Drumm, Cork University Hospital, did not receive a high performance rating in the HealthStat study. What steps are being taken by the Health Service Executive and the Department to address an issue of great concern to patients, namely, patient safety in hospitals, whether in terms of negligence or MRSA and related infections? I ask Dr. Holohan for his views on these issues.

Dr. Tony Holohan

Perhaps Professor Drumm will deal with the question related to HealthStat. In relation to the issue of patient safety and the specific statistic the Chairman mentioned, this is an example of the kind of errors which occur in health systems around the world. Patient safety is something from a policy point of view which has come to the fore in developed health care systems in the past five years and probably the past ten years in the United States, the country which has led the way in this area. That is one example but there are many other perhaps even more common examples around issues such as medication error and so on.

In this country, we have had our own experiences, of which the Neary incident was obviously one of the most significant. In response to that case the Minister established the Commission on Patient Safety and Quality Assurance in health care which was chaired by Dr. Deirdre Madden from University College Cork. The commission produced its report which was brought to the Government and approved in February, if memory serves me correctly. One of its central recommendations was that an implementation steering group be established to drive forward all the recommendations of the report. This has placed responsibilities on a very broad range of organisations in the health system, principally the Health Service Executive but also the Health Information and Quality Authority, the Medical Council and the other regulatory bodies, the Irish Medicines Board and the Department.

One of the substantial centrepieces of that is the commitment to develop legislation in the area of patient safety and quality, a central part of which would be licensing legislation. This would envisage a situation whereby, on the basis of minimum standards, one would have licensing of health care facilities, whether public or private. That is a commitment we have as part of that. The overall implementation steering group is to be chaired by me. As we speak, the group is getting going and was in fact due to meet today but we had to defer the meeting because of what has been happening with influenza.

A substantial amount of work is taking place. I know much has happened in the HSE and I am sure representatives of the organisation will be happy to speak about some of that. I know some of the changes the HSE referred to in answer to some of the questions are specifically directed at enhancing its capacity to deal with this important agenda.

Chairman

Are we winning the fight against MRSA and related infections?

Dr. Tony Holohan

I would categorise it as an ongoing battle as opposed to something that can be won at a particular point in time. This is due to the nature of health care and the fact that we will have increasing numbers of patients as time goes on and technology improves who are both dependent and at risk of infection. At the same time, however, we have better and more complex antibiotics to give such patients.

We will always see a certain level of infection with antimicrobial resistant organisms. What we can expect to see and are seeing is improvement, in particular in MRSA. The rates of MRSA are coming down in response to some of the initiatives that have taken place. We all concede there is still some room for further improvement. Some other countries, for example, the Netherlands, have led the way and have the kind of standard to which we should aspire. To be realistic, however, we cannot ever expect to eliminate this problem which will continue to be a feature. This underscores the fact that hospitals need to be seen as places where people should only be if they need to be in hospital because, among other things, they can be at risk of picking up antimicrobial resistant organisms. One of the best ways of preventing that from happening is not to be in hospital in the first place.

Ms Ann Doherty

To echo Dr. Holohan's comments, I very much welcome the publication of the report and the patient safety commission. Prior to its publication, since the establishment of our organisation, we have been very focused on trying to develop new systems and processes to make the system safer. We have a quality and risk framework which we have been rolling out across the system. Key to this are the processes of audit and standards. The development of our own clinical directorate is very important in this as well.

As Dr. Holohan stated, this is about the long haul rather than the short haul and continuous quality improvement. Some of the things we have been doing include learning from different incidents that have occurred and applying this learning across the system, be it in safe site surgery or in relation to hospital hygiene and infection control. That is a sample of some of the things we have been doing.

Professor Brendan Drumm

A number of issues which sound simple can have a huge impact. These include, for instance, the use of locums who may not have been experienced to fill in for full-time consultants on weekend cover. That is something we are now essentially removing from the system. This is a big challenge to the system because we often ran a system whereby one had to be qualified to the nth degree to do the job but one could have somebody covering for one with very few of those achievements on his or her curriculum vitae. Of course, even if cover is provided for only one day in the month, an unfortunate incident could still arise. That is one of the areas we will take on.

We will continue to battle MRSA but we are also hoping that public education programmes and so on will take pressure off general practitioners in terms of antibiotic prescribing because that is a huge driver.

Chairman

To cite the findings of the HSE's HealthStat programme, under which red, amber and green ratings are given to health care institutions, 26 hospitals received an amber rating and four hospitals, including Cork University Hospital, Our Lady of Lourdes Hospital, Drogheda, and University College Hospital, Galway, received an overall rating of red.

Professor Brendan Drumm

I apologise for not addressing that question when the Chairman first brought it up. We have been running HealthStat for about one and a half years because we needed to embed it and give people some certainty about how it works. We set the bar fairly high. If all hospitals are given a green rating, we will be the best in the world. That is where we have to set the bar. We should not have hospitals in red. Members will have heard people like Tony McNamara interviewed on the radio when the HealthStat figures first came out saying that Cork University Hospital accepts that such a major structure should not be in red.

HealthStat is a dynamic process which involves not only the issuing of figures. We meet month to month with six or seven hospitals from across the system which are directly challenged by me and others on specific areas of performance. We then target a number of the areas where hospitals are not reaching the national standard and there is an action to be followed up. The hospitals must come back and state whether they have fixed the issue and, if not, why they have not fixed it. It is a dynamic and challenging process for the hospitals. Having said that, the hospitals have seen HealthStat as a real opportunity to be in a much better position to manage their structure and to be able to say they are being held to account. I assure the committee that people in Cork University Hospital will be very focused on moving themselves from the initial red status. That gives them something to work towards and they will be focused on that. We are just developing HealthStat in the community.

Chairman

Deputy Clune mentioned breast services in Cork and services being moved from a hospital that has a good rating, namely, the South Infirmary. The Mercy Hospital also has question marks over its future role. It is ironic that services are being centralised in a hospital that has a red rating while the future is in doubt for hospitals with a superior rating.

Professor Brendan Drumm

A couple of issues arise in that regard. First, that could be a logical conclusion. Second, it is fair to say that it is a big challenge for large hospitals to cross the bar in the HealthStat programme. They have far more services and there are more places where one can trip and fall. It is inherent in the system that the size of a hospital will create a challenge. I do not excuse the hospitals in question because they also have significantly greater resources, but in terms of long-term planning——

Chairman

That does not follow. I am sorry for interrupting Professor Drumm but St. Vincent's University Hospital is one of the best performing hospitals.

Professor Brendan Drumm

Absolutely. There is no doubt that the large hospitals can get good results but there is a certain advantage to being smaller. I do not excuse anybody. We all want to see Cork University Hospital improve.

We cannot plan the medium to long-term development of services based on where the HealthStat programme is currently. If we did, then our planning could go way off the wall and we could end up with services all over the place. Beaumont Hospital and Cork University Hospital are the only two neurosurgery centres in the country and neither of them is reaching the mark in HealthStat and if our response is to move neurosurgery to two other centres then in that case we could end up with planning going all over the place. We must ensure Cork University Hospital reaches the standard.

Chairman

The current suicide problem appears to be affecting every community in the country. Targets were set in the Reach Out programme but I was concerned to see in documentation supplied to the Oireachtas Joint Committee on Health and Children that no statistics are kept on self-harm incidents in outpatient departments of psychiatric units. That seems to be a fatal flaw in the approach to what is now an epidemic in some communities. How does the Health Service Executive plan to address that major defect in the service?

Professor Brendan Drumm

Perhaps Ms McGuinness can answer that question as I do not have the answer to it. We can investigate the matter. We are building HealthStat at community level and we could build that information into it. It sounds like something we should measure.

Ms Laverne McGuinness

It is measured in the acute units. The issue arose at one of the meetings. No information is captured electronically in that regard but some hospitals keep individual records. However, that information is not made known on a national basis and we do not have a sense of the picture nationally.

Chairman

Does that mean when somebody who has self-harmed presents again at a hospital that no record is available?

Professor Brendan Drumm

Patients have an individual chart.

Ms Laverne McGuinness

There is an individual record. The matter is being addressed because we recognise that once there is a repeat episode a link is required from the acute psychiatric services into the community mental health services. The record is not automatically kept but we are addressing the issue.

Professor Brendan Drumm

The Chairman is asking whether we have an overall figure for the number of people who attend.

Ms Laverne McGuinness

There are no national figures, there are individual records.

Chairman

How can we deal with what is a major social and medical issue when we do not know the scale of the problem?

Ms Laverne McGuinness

We have figures for the number of attempted suicides. We have individual figures but not national figures for when people present to accident and emergency services. We have statistics for the number of suicide attempts nationally, be it in the community or the hospitals but the figures have not been broken down. We are examining the information.

Professor Brendan Drumm

The Chairman's point is reasonable, that we do not log if a person is considered to be at risk of suicide by a psychiatrist. Perhaps we should do that. We do not have figures for people in that category. Perhaps we need to go back to the psychiatrists to see whether they would be willing to engage in that. We do not have figures to indicate that, for example, 1,000 people presented in mental health clinics that were at risk.

Chairman

Would Dr. Holohan like to comment? It is a question of patient safety if the statistics are not being logged.

Dr. Tony Holohan

Through the national parasuicide register we have national statistics on the number of people who deliberately self-harm. I agree with Professor Drumm that that does not necessarily equate to the number of people at risk of suicide because not every incident of deliberate self-harm would necessarily represent a risk of suicide. As Professor Drumm indicated, the statistics for persons who would meet a psychiatrist's designation of somebody at risk of suicide is not logged.

Chairman

I will not stray into policy but a target was set by Government in the Reach Out programme to reduce the incidence of suicide by 20%. That programme was published in 2007. What progress has been made on reaching that target?

Ms Laverne McGuinness

There has been an active campaign on the Reach Out programme and overall suicide prevention. The campaign to protect one's mental health has been publicly advertised both on radio and television. I do not have the figures with me but the incidence of suicide has reduced slightly. There was a reduction in the figures for 2006 to 2007 on the 2005 figures. I do not have the final figures for 2008 but I can provide them to the committee.

Chairman

Is Ms McGuinness saying that suicide rates have reduced?

Ms Laverne McGuinness

The numbers of suicides have reduced over the years.

Professor Brendan Drumm

It is probably marginal.

Ms Laverne McGuinness

It is marginal but they have reduced. The committee previously inquired about suicide prevention officers and they are now in place throughout the country. They are targeting what needs to be done in order to tackle suicide. I understand the concerns that have been expressed. Statistics have proven that in periods of financial decline in particular the likelihood of an increase in the rate of suicide is high. Prevention is being targeted at this stage.

Professor Brendan Drumm

We will give the Chairman the annual figures. One would want to be careful as they might not represent a success on our behalf but reflect the fact that we started collecting information more successfully a few years ago and that could account for the sudden rise at that time. If the rate of suicide levels off it might not necessarily be due to our interventions. We will get those figures for the committee. The rate has levelled off and slightly decreased.

Chairman

I understand.

Mr. Michael Scanlan

I have some figures with me and I am happy to share them with the committee. They show that in 2003 there was a total of 497 suicides. In 2004 the total was 493. In 2005 the total was 481. I have provisional figures for 2006 and 2007. The target was based on the 2005 figure of 481. Bearing in mind the caveats that Professor Drumm outlined, the 2007 figure was 460, which is a reduction of approximately 5%. In fairness to the Chairman, the CSO has still to validate the latest figures.

Deputy Róisín Shortall

What is the procedure after a person attempts suicide and presents at an accident and emergency service? One can assume they are dealt with physically.

Ms Ann Doherty

It varies from one accident and emergency unit to another. Some units have interventional nurses working with them through the mental health programme in order to follow patients back into the community and to link in with the mental health services, as appropriate. All accident and emergency units log people who present with evidence of deliberate self-harm and repeat visits are noted. Where it is available, liaison psychiatry is the third arm of that system and referrals can be made to it. Experience demonstrates that some people will not avail of those services and that is something we need to develop further.

Deputy Róisín Shortall

There are complaints about people who have made serious suicide attempts being discharged in the middle of the night from accident and emergency units. Is there a follow-up after discharge?

Ms Ann Doherty

It varies in the different settings. It would be helpful if Deputy Shortall could provide a specific example privately that I could follow up, as that would be a significant concern.

Deputy Róisín Shortall

I will do that.

Chairman

I am sure Professor Drumm expects my final question, which concerns the property portfolio. Last year, I described Our Lady's Hospital in Cork as the largest derelict site in Cork city. Not only is it the largest, it has got even larger since I mentioned it last. It is the highest and most visible also. It has been subject to a number of arson attacks and wanton destruction. It is a listed building, yet nothing has happened since last year.

Mr. Brian Gilroy

I do not know if the Chairman or members received the briefing paper we produced. It was submitted reasonably late. We have a paper we can give members that lays out the chronology. This is one of the sites that is subject to the application going into the Department for the overall programme. We are in discussions with the council regarding the disposal of part — or a considerable part — of the site. Many parts of the site have been disposed of already. The piece that remains and the one in question, particularly with regard to security——

Chairman

It is not a "piece" but the largest part. It covers 70% of the acreage of the overall site and is, therefore, not just a piece. It is a huge tract with two large buildings.

Mr. Brian Gilroy

We have carried out security reviews. There are now motorised patrols because the site is very isolated. Permanent manned security on the site was not deemed safe for the security staff and therefore there is a motorised patrol, which remains in place. The site is subject to our application for disposal in the course of this year or, at the latest, by Q2 of next year.

Professor Brendan Drumm

It is relevant to note that because significant parts of the site, which the Chairman knows better than I do, were sold off heretofore, a right of way had to be left. This means one cannot secure the site, only the individual building. A right of way had to be left to the lands that were sold, even though they have not necessarily been developed. That has created the problem.

Chairman

That is not entirely correct.

Professor Brendan Drumm

We will give the Chairman the benefit of the doubt.

Chairman

The land that was sold was vacant since 1994 and the land that I am dealing with was vacated around 2003. It was valued at several tens of millions of euro at the time but I suspect the value has diminished by one third at this stage because of the failure to dispose of it. What I am hearing now is exactly what I heard last year except that, as Mr. Gilroy is stating, patrolling on foot has been removed. Motorised security means somebody driving around in a car once or twice per day and perhaps once per night. The matter may be glamorised by stating motorised security. The place is wide open and the buildings will be levelled by arson attacks. The value of the land bank has been reduced by at least one third because of inaction on the part of the Health Service Executive in dealing with its property portfolio in this case.

Mr. Brian Gilroy

To be clear, the value that the Chairman has quoted has never been the value of the sites. The building is listed and, in itself, is a liability and not an asset——

Chairman

I am talking about the lands.

Mr. Brian Gilroy

——given the cost of protecting it. What I am saying is that one cannot sell the lands without selling the building. There is, therefore, an inherent liability. The last of the services, St. John's unit – the community workshop – was only closed in January this year.

Chairman

With all due respect, I know the place and live within half a mile of it. St. John's workshop is only a glorified shed that was at the back of the listed buildings. Therefore, it had no impact at all on the disposal of the other buildings and even on their safeguarding.

Mr. Brian Gilroy

I agree on the safeguarding but it did have an impact on the disposal. Across all our mental health campuses, there is no point in selling small pieces here and there. We are having to decommission them and must consider the importance of the application for the reinvestment in the land. In order to decommission even more, we need to invest in the facilities to which people are to move. That has reached completion. As I stated, the figures the Chairman has quoted have never reflected the value of the lands.

Chairman

Mr. Gilroy is incorrect again. The vacation of those buildings was not dependent on obtaining accommodation elsewhere. They were emptied in 2004 and have remained vacant since then. They have been deteriorating and have been attacked by arsonists and gutted inside. Permanent security has been removed from the site only in the past two months. The area in question is frequented by all sorts of people engaged in anti-social behaviour, including drug peddlers and drug takers. Cork City Council is in the process of declaring it a derelict site under the Derelict Sites Act.

Mr. Brian Gilroy

St. Kevin's closed in 2003; it is only one building. St. Dympna's only closed in 2007 and, as I said, St. John's closed. The small detached house on the site was still occupied up to the end of 2007. We carried out reviews in the intervening period on the possible redevelopment of part of site, particularly St. Kevin's. The cost proved prohibitive and that is why it is now going forward for sale. All that work is complete. We are in discussions with the council with regard to it possibly acquiring the site but they are preliminary discussions. If the council does not acquire the site, it will be sold.

Deputy Darragh O’Brien

I have two brief questions following on from my earlier comments. Last year, we discussed in some detail the hospital in the home scheme, which was integrated into a programme by the HSE. It was privately run and the savings in bed days amounted to approximately 15,000. A scheme operator in Dublin was going to integrate the scheme into its own and run it itself. Has this been successful and is the integrated scheme up and running?

Professor Brendan Drumm

Yes, we are expanding our community intervention schemes. We have another scheme being established in the Dublin north east region. Increasingly we are increasing the capacity to deal with intravenous therapy in the home. We have other schemes up and running in Dublin, and also in Limerick and Cork. We are continuing to expand the schemes.

The hospital in the home scheme was expensive.

Deputy Darragh O’Brien

We had different views on that matter last year. We both have a point of view but the scheme is now gone and the HSE is now running the integrated programme.

Professor Brendan Drumm

Our continued efforts are to keep running community intervention schemes which take up on that work.

Deputy Darragh O’Brien

I would very much appreciate if we could receive something in writing on the progress in that regard. Obviously this is not just a Dublin issue. There was a lot of concern when the scheme was shut down. It was believed to have been working very well. Now that the HSE is responsible, I would like to know the current position, the number of patients involved and the savings in bed days.

Professor Brendan Drumm

We can give the Deputy that information. It is a Dublin issue.

Ms Laverne McGuinness

We will give the Deputy information on bed days by type.

Deputy Darragh O’Brien

Okay. If I could have the information in writing, it would be brilliant.

My final question relates to the more detailed capital programme this year in respect of inpatient and outpatient facilities for cystic fibrosis patients in Beaumont Hospital. I raised this matter last year and work has been ongoing. Perhaps the delegates will comment on the cystic fibrosis in St. Vincent's Hospital, which has been raised in the Dáil. Could I have an update on the facilities in Beaumont Hospital?

Mr. Brian Gilroy

As I said, we do not have an approved capital plan for 2009; I cannot make particular commitments until we have it.

Deputy Darragh O’Brien

Last year, we received a written commitment in respect of the delivery, early this year, of the specific isolation rooms in Beaumont Hospital. The administration ward was to be moved. If the delegates need to get back to me in writing, that will be fine. I do not want to hold up the meeting.

Mr. Brian Gilroy

Okay.

Deputy Darragh O’Brien

It is crucial that we get a handle on it. It was not subject to 2009 funding. An extra €2.1 million was given last year and the figure increased to €3.6 million. Could we have some details on this?

Ms Ann Doherty

I will forward that information to the Deputy.

Chairman

When will the capital programme for 2009 be approved?

Mr. Brian Gilroy

In the recent April budget we received further notification, as a result of which we must revise the capital plan. We have to consult widely through the services. It is not just a capital issue because there are knock-on implications. We hope to resubmit the revised version in the coming weeks based on the cuts about which we were notified a couple of weeks ago.

Chairman

I thank Mr. Gilroy.

Deputy Seán Fleming

I have a few further questions. I ask the HSE and the Department to notify us of any further knock-on or consequential costs of which they could be aware as regards the consultants' contract and which are not directly related to payments to consultants such as the fall in income from private health insurers. That is just one example, but there could be more. I am asking for a full assessment, not just for 2009. Some €300 million comes from the private health insurance sector to the HSE each year. If the majority of consultants over a period of time are to be type A, as we call them, the amount of income will change dramatically. That is only one example. The officials will be more familiar with other possibilities, but that cannot be the only knock-on cost. There might be insurance or legal costs to do with negligence cases. I should like to see the overall liability picture for the taxpayer, not just the amount it will cost consultants. Perhaps the officials might submit a paper on the matter to the committee. They might also update us on the health repayments scheme, indicating payments to date, how much is left, how many cases are still in the system etc., because we continually receive queries in that regard. They might also let us know the current position on the children's hospital on the Mater Hospital site. If the officials do not have information on some of these aspects, they might send it on. However, they might have some details of the health repayments scheme.

Mr. Michael Scanlan

As of 10 April there were almost 20,000 offers of repayment — 19,982 offers, totalling more than €394 million, had been made. If it is easier for the Deputy, I will give the information to him in writing.

Deputy Seán Fleming

Perhaps Mr. Scanlan might send a note to the committee.

Mr. Michael Scanlan

Yes; it might be easier to do that.

Deputy Seán Fleming

He can also give us a note on the consultants. Will somebody comment on expenditure to date as regards the Mater Hopsital site or on the progress which has been made?

Professor Brendan Drumm

I do not know the precise expenditure figure to date, but there is a big development on the Mater Hospital site.

Deputy Seán Fleming

I am concerned with the children's hospital site.

Professor Brendan Drumm

The children's hospital site is being developed by a development board. As far as we know, the project is proceeding apace in terms of the overall development. The board is developing a design brief for the development — Mr. Gilroy has the details — which will lead to a detailed design. A project group is up and running in this regard in Parnell Square. Perhaps Mr. Gilroy might comment further.

Mr. Brian Gilroy

The site on which the hospital is to be built was transferred last year to the ownership of the HSE which will license the development board to build a hospital on it. Work has been ongoing, with all the stakeholders driving a design brief. The intention is to have the brief concluded by June or July this year. At that point it will be in a position to create an exemplar design and present the business case, as required for all projects over €30 million. That will start to happen in the third quarter of the year. The idea is to use a design-build method for construction; therefore, the exemplar design will only bring the project to a certain point. It will then go through market. There will be much more clarity by the third quarter.

Deputy Seán Fleming

There are two other issues about which I want to ask. I see in the Department of Health and Children figures for the year in question payments to the State Claims Agency in respect of costs relating to criminal negligence cases. The outturn for the year was €10.925 million. Professor Drumm talks about quality and risk management — a big issue. The figure for 2008 under that heading indicates that the payment came to €42 million. I am sure there was one big reason for incurring an extra €30 million, which meant there was a fourfold increase on the figure for 2007. Is there a simple explanation?

Mr. Michael Scanlan

Yes, I hope. The Deputy is looking at the clinical indemnity scheme, which effectively means the State carries the risk, as opposed to the old system under which individual consultants took out insurance and the State recouped the cost. In essence, this refers to the level of exposure under the clinical indemnity scheme reaching a plateau. We always knew that in stepping from one methodology to another the number of claims would start low and grow back up, while the number of claims under the old system would start to go down. Am I making any sense to the Deputy?

Deputy Seán Fleming

I am not fully sure what Mr. Scanlan is saying.

Mr. Michael Scanlan

Effectively, there was a system of private insurance under which the individual consultant took out an insurance policy and we paid the individual consultant. We changed to State insurance, which meant an interaction between the two. It is like running down the old, with the new running up.

Deputy Seán Fleming

In other words, prior to this, many claims did not come through the Department. How much was being paid under the old system because it is an enormous jump from €10 million to €42 million in terms of medical negligence payments between one year and another. It is a phenomenal increase — 300%.

Mr. Michael Scanlan

To be honest, I do not have the 2008 figures with me and shall have to check. Neither do I have with me what we paid for insurance policies in the past. However, the actual payout would have been made by the individual, either by the Medical Defence Union or the Medical Protection Society.

Deputy Seán Fleming

Will these costs increase further with more consultants coming in under the consultants' contract?

Mr. Michael Scanlan

This does not just cover consultants; the whole idea was that it should be integrated. We had consultants, junior doctors, hospitals, the whole lot under the one system. The State Claims Agency now manages everything. I will get the Deputy more information on trends.

Deputy Seán Fleming

I should be obliged because the figures seem to reflect a massive increase.

I have a question for the HSE, perhaps for Ms McGuinness. How many community welfare officers does the HSE have? They were to be transferred to the Department of Social and Family Affairs and we keep hearing about difficulties in this regard. How many are still employed?

Ms Laverne McGuinness

In relation to community welfare officers, the plan still is that they will transfer to the Department of Social and Family Affairs. Almost 1,000 are to transfer, with a related administrative cohort. Amendments were brought to the Government in recent days as regards their transfer.

Deputy Seán Fleming

I have a specific question about the decisions made by community welfare officers. I understand people who lose their jobs are going to community welfare officers to look for mortgage interest supplement. I know Ms McGuinness might say this is ultimately paid by the Department of Social and Family Affairs. We shall ask that Department too, but it is HSE staff who are making the frontline decisions in this regard. That is why I am asking her these questions.

I have come across a number of cases recently in which people had mortgage interest to pay amounting to several hundred euro a month. Because one or both parties had lost his or her job, they approached the community welfare officer. The amount of money sought, in some cases, was less than the normal rental subsidy the HSE pays out every day of the week, yet the people concerned are being told in writing by the community welfare officer that, in his or her opinion, they should not have taken out a mortgage in the first place, as it was above their means, the interest rate was excessive, etc., and that they should never have entered into such an agreement. How can an HSE community welfare officer come to a financial decision on mortgage issues? In the HSE's opinion, it seems the bank or financial institution which gave the loan was wrong in the first instance. That is, in effect, what it is saying in the letters. To whom has the HSE talked in this regard? I have asked the Department of Social and Family Affairs about the matter and it states it is talking to the bankers' federation to secure an agreement on how such cases are to be handled. My main concern is that community welfare officers seem to be out in the field on their own, making individual decisions. What briefing were they given on how to arrive at such conclusions? Did they receive any instructions? If so, I should like to see them because a number of these cases will be winging their way through the appeals system. I am sure we have all come across such cases. I have come across several.

Deputy Róisín Shortall

There is a need for new guidelines.

Deputy Seán Fleming

I cannot understand it. Perhaps it is unfair on community welfare officers in that they are being asked to make these decisions. However, they are making decisions which affect people's lives and I do not know how they arrive at their conclusions. Will Ms McGuinness talk to me about the process involved?

Ms Laverne McGuinness

I will get back to the Deputy on the process and the individual cases he is quoting on it. There are thresholds that were in operation and there have been changes in the guidelines. I will deal with those in the note and I will get back to the Deputy about it.

Deputy Seán Fleming

I would like Ms McGuinness to send us the details, because it is a growing issue on the ground. I am sure every TD is coming across these individual cases.

Chairman

On the related issue of medical cards, people with long-term illnesses and who had medical cards due to medical needs rather than income levels are now seeing their cards cut when they come up for renewal. The parameters that were used in the past are being ignored.

Ms Laverne McGuinness

Is the Chairman talking about the long-term illness cards being cut, or the medical cards?

Chairman

I am talking about the medical card that was given based on medical needs over a long period of time. Is there an instruction gone out to community welfare officers or superintendent community welfare officers to cut back on this kind of medical card?

Ms Laverne McGuinness

No instruction has gone out at all to cut back on the level of medical cards. Medical cards can be granted on a number of grounds. A person can be granted a medical card if he or she is entitled to it under the legislation regarding income guidelines, while a person can also be granted a card on the grounds of discretion. Discretion can be based on whether or not the person is marginally over the financial guidelines, but primarily it is based on medical need. The long-term illness card is for a specified number of illnesses——

Chairman

I am talking about the medical cards based on medical need that have been allowed for decades. They have suddenly been cut and I see a trend in this recently. Is this because of financial cutbacks? Has a directive been given to cut these cards when they come up for renewal?

Ms Laverne McGuinness

There has been no such directive. Every card is reviewed upon renewal, so discretion is used at each individual renewal time.

Chairman

Has the discretion been removed from the decision makers?

Ms Laverne McGuinness

Absolutely not. Discretion is still local and is based on financial need or medical need, and it is reviewed each time the card comes up for renewal.

Deputy Róisín Shortall

The processing of applications is being dealt with centrally in Finglas and people are not using discretion there. I have had cases where people have submitted substantial medical evidence and it is not being taken into consideration.

Ms Laverne McGuinness

There are two issues. First, discretionary medical cards have not been centralised in Finglas Our intent is that the processing and issuing of medical cards are centralised in our primary care reimbursement service in Finglas. This is done for a number of reasons. It is far more cost efficient to do it and we make savings of €10.4 million. As well as that, we will reach our targets where we will be able to issue cards in a much more efficient way. We hope that 15 days will be the target. When somebody looks for a medical card, we hope that it will be issued in that time. That does not mean to say that the assessment of a card for issue will not have some local engagement with it, but there will be a set of rules under which it will be issued. The saving is €10.4 million and that is one of the areas that we are looking to standardise and to centralise, thereby bringing that saving to the HSE, as it is primarily an administrative function.

The discretion for discretionary medical cards is still held locally with the local health manager and the community welfare officer, or the principal medical officer.

Deputy Róisín Shortall

What about the over 70s?

Ms Laverne McGuinness

Over 70s medical cards are dealt with in Finglas. These are new cards and they are not discretionary as they are for over 70s. Those income guidelines have been significantly increased for people who approach the age of 70.

Deputy Róisín Shortall

There is medical evidence submitted that it is not being examined.

Professor Brendan Drumm

We would be concerned about this and perhaps it comes back to the Deputy's question. We are centralising what is essentially a procedural issue, which is a person has a certain income and is entitled to a medical card and has so many children. That is purely a management issue and can be done with 100 people rather than 300 people. I can remove much duplication through this.

The discretionary card is separate, but there may well be a story emanating out there that the discretionary cards have been centralised. It might be in people's interests——

Chairman

There is evidence involved.

Professor Brendan Drumm

I would be worried about that because it might be part of a different issue.

Chairman

I can provide you with two or three examples at least.

Professor Brendan Drumm

We need to revisit that. Things may have fallen as part of another battle.

Deputy Róisín Shortall

I have three short questions. There is a charge of €910 for the use of private beds in public hospitals. Is that the full economic cost? Are there moneys outstanding owed to the HSE by insurers?

Professor Brendan Drumm

It is not the full economic cost. Private hospitals anywhere in the world are not billing on a global fee. They are billing on what they actually do for the patient. If somebody comes in and has a plaster applied, he or she is charged for it. He or she is charged if given an expensive drug on the oncology ward and so on. The cost per patient for us is massively variable. If we end up with a patient on chemotherapy, the cost could be way out of line when compared with what a private hospital would bill on an itemised basis.

Deputy Róisín Shortall

What is the economic cost of the bed?

Professor Brendan Drumm

Is that across the system?

Deputy Róisín Shortall

Yes.

Mr. Liam Woods

The economic cost of a case is just over €5,000 on average. The answer to the Deputy's question depends on each case, because it will depend how long somebody is in the bed and on the cost of the particular procedure.

Deputy Róisín Shortall

Take a case mix. What is the average economic cost for a private bed in a public hospital?

Mr. Liam Woods

We are approaching on average the full economic cost. That is not the case always, where the input cost——

Deputy Róisín Shortall

Mr. Woods has provided the figure of €910 as the charge that is levied on insurers.

Mr. Liam Woods

Yes, that is a statutory charge.

Deputy Róisín Shortall

Is that the economic cost?

Mr. Liam Woods

It depends on the case.

Mr. Michael Scanlan

The charge is actually set by the Minister, in fairness. I do not know whether it was the Department or the HSE that sent in the rate. The actual charge has gone up. It was €300 in 2002, but now it is €900. There have been increases over the years of 15%, 10%, 16%, 15%, 25%, 10%, 25%, 10% and 20%, which were very significant. Government policy is to move towards economic charging and members have seen those increases. I have figures which are average and which vary depending on the type of hospital. In some cases, we are now getting close to, and in other cases above, that rate. In other cases, we are not going above.

The Department is already planning to undertake a study in conjunction with the Department of Finance, the HSE and an outside expert to look later this year at the full economic cost. While it might be the case that we are not recovering our costs, we could actually be more expensive than a private sector hospital. That is what we have been told by other sources. That goes back to the average length of stay. If a private hospital can do the procedure more efficiently and more quickly, we are charging more and yet we are not covering our costs. We need to put those two bits together and we will have a study later on this year on that.

Deputy Róisín Shortall

I want to ask about professional staff across the HSE. What percentage of posts are currently vacant? I am talking about nurses, therapists, doctors and so on.

Mr. Seán McGrath

I will have to get back to the Deputy with that.

Deputy Róisín Shortall

The first-hand experience over time is that at community level, there are a substantial number of vacancies, particularly in disadvantaged areas, where arguably the services are most needed. For theoretical services such as child health services, there should be developmental tests and so on, but this is just not happening because there are no public health nurses. There are many vacancies in the poorer areas.

Do the witnesses have serious concerns about the impact of the early retirement scheme and career break scheme, and the impact they will have on front-line services?

Professor Brendan Drumm

If the early retirement scheme proves as attractive as it may do to people over 50 in the nursing profession, where we have 35,000 nurses, we can certainly deal with efficiencies coming into the system. People thought I was talking about an outlier when I spoke about 400 doctors and 100 admissions, but I am not as the 4:1 ratio is pretty common.

The way to deal with that is to redeploy people. In the context of a voluntary redundancy scheme and a moratorium on recruitment, the inability to redeploy staff within ten or 15 miles or whatever will present a huge challenge. We will end up with people leaving all over the place, including from units where we need the service to move upwards, whereas in other places we need to move it downwards because of reconfiguration. We have no way of controlling those requirements if we cannot bring about significant redeployment. That is the greatest challenge we face.

Deputy Róisín Shortall

What is the scope for redeployment in the case, for example, of therapists where there is already great pressure as a consequence of inadequate numbers?

Mr. Seán McGrath

It is important to note that certain grades, including social workers, the therapy grades and so on, are exempt and will not be entitled to avail of the severance scheme. In the case of those staff, the current complement will be increased this year by more than 450. The focus will be on community services. We want to take the resources in hospitals and bring them into the community. We have already done this successfully in the case of primary care teams. We are saying that staff cannot be let go unless there is a flexibility in regard to local services. That is what we are doing at local level. We need to do the same at national level in conjunction with the trade union movement and the professional people leading it.

Deputy Róisín Shortall

Will the voluntary severance and career break initiatives be available to nurses?

Mr. Seán McGrath

Sure.

Professor Brendan Drumm

Perhaps Mr. McGrath might expand further on the current rules and regulations for the redeployment of nurses and so on.

Mr. Seán McGrath

The current situation is very tight. We do not have a compulsory redeployment or reassignment policy within hospitals or across institutions. The ability for a nurse manager to transfer a staff member from one ward to another or between institutions is not part and parcel of the tool kit.

Deputy Róisín Shortall

How can that be progressed? Is it on the table in the national talks?

Mr. Seán McGrath

We are progressing it both within the national talks and within the health sector talks with the trade unions.

Professor Brendan Drumm

There is a concern that people could end up in the wrong place within the system.

Deputy Róisín Shortall

What progress has been made on the information and communications technology, ICT, strategy? What is the estimated cost of implementing it in full? Can the delegates offer assurances there will be no repeat of previous mistakes?

Professor Brendan Drumm

The previous mistake was PPARS, which had nothing to do with the Health Service Executive.

Deputy Róisín Shortall

Representatives of other agencies have appeared before the committee to outline a history of problems with ICT systems.

Professor Brendan Drumm

To be fair, I do not want to wash my hands completely of PPARS. The system has provided us with the best data we have in terms of issues like service performance, staff performance, health statistics and so on. It would be of great benefit to us if the system were in place everywhere. PPARS was set up, as were many ICT structures, in a situation where there was no incentive for anybody to use it because nobody was measuring absenteeism in any way at management level. If we were trying to install PPARS today throughout the system, the data would be entered because there is a desire to manage absenteeism.

We have brought a comprehensive ICT strategy to the board. The expansion of the national integrated medical imaging system, NIMIS, project is a huge priority for us to get over the line because it offers a huge up-front benefit to patients in terms of introducing great efficiencies into the system. The need for a common financial system is a huge issue for us because it gives us control——

Deputy Róisín Shortall

What timescale is the executive working to for full implementation of that system?

Professor Brendan Drumm

We are into the tendering stage for the NIMIS.

Mr. Liam Woods

We expect full implementation will take five to seven years.

Professor Brendan Drumm

However, we will see full roll-out of the NIMIS in Sligo and Limerick in the first wave, which will happen within 12 to 18 months. Thereafter, it will be rolled out gradually throughout the State.

Chairman

Are all promotions made by internal competition or is there public competition for senior positions?

Mr. Seán McGrath

We use the Public Appointments Service, PAS, for higher-end administration and consultant jobs and so on, that is, at general manager level up to chief executive officer level. We have internal competitions for clerical grades and nursing promotions.

Chairman

In regard to senior management positions, are all appointments made via public competition?

Mr. Seán McGrath

Yes, they are managed by the PAS.

Deputy Thomas P. Broughan

I apologise for having to leave the meeting on other business. I am sure most issues have been covered in the course of this lengthy session. I thank the Comptroller and Auditor General for his cogent analysis of a complex issue, which was very helpful for members. I thank the chief executive officer, the Secretary General and their staff for the helpful information they provided. Has the centralisation process for medical cards been dealt with?

Chairman

Yes.

Deputy Thomas P. Broughan

That is fine.

Chairman

At this stage we have covered everything. It helped enormously that considerable preparation was done by both delegates and members. Some of the questions asked were not answered, through no fault of the witnesses. We expect to receive those answers in due course. I invite Mr. Buckley to conclude.

Mr. John Buckley

Our reports on the budget management process and the transformation programme were essentially status reports that allow us to set the position for 2008. Thereafter, we can see how things evolve. We looked at three areas today, namely, accountability for certain elements of performance, accountability for financial spending and accountability for change management.

On performance, I welcome the move towards greater measurement of performance through the performance management system and healthstat. In addition, the assurances that the measures will be validated using internal audit are welcome. From my perspective, there is a need for care in choosing and interpreting indicators. We must be careful with indicators and measures to ensure they are not manipulated by those who want to present a certain version.

On financial expenditure, I welcome the changes in regard to the ring fencing of new developments and the demand-led schemes and the movement towards earlier budgets. The Health Service Executive is challenged to maintain business as usual while transforming itself and moving to new systems and processes. That means changing structures and systems and, most importantly, changing people. One of the themes that came out of the debate is how difficult it is to achieve that. The point we try to push is that where change involves people, there is a need for local action plans so that local variability can be taken into account. There must also be some type of verification process so that the implementation of these local action plans, whether they involve the introduction of clinical directors or whatever, can move at whatever pace is appropriate to the local unit. These were some of the themes to emerge. Overall, I welcome the responses made in the interim on foot of the recommendations in both chapters. While they are gratifying, unfortunately, as auditors, we obviously must maintain an attitude of pervasive doubt and continue to review their implementation.

Chairman

I thank Mr. Buckley.

Is it agreed that the committee note Votes 39 and 40? Agreed. Is it agreed to dispose of chapters 13.1, 14.1 and 14.2, as well as the HSE financial statements for 2007? Agreed.

I thank members, Mr. Buckley and his staff and, in particular, the Department and the HSE for their co-operation.

The witnesses withdrew.

The committee adjourned at 2.30 p.m. until 10 a.m. on Thursday, 14 May 2009.