COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 26 Jan 2012

Chapter 48 - Nursing Home Care Costs

Mr. Cathal Magee (Chief Executive Officer, Health Service Executive) and Mr. Tony O’Brien (Chief Executive Officer, National Treatment Purchase Fund) called and examined.

Chairman

I remind members, witnesses and those in the Visitors Gallery to turn off their mobile phones, as they interfere with the sound quality of the transmission of the meeting. I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give to the committee. If they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they do not criticise or make charges against a Member of either House, a person outside the Houses or an official by name or in such a way as to make him or her identifiable. Members are reminded of the provisions under Standing Order 158 that the committee should 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 policy or policies.

I welcome Mr. Cathal Magee, chief executive officer, Health Service Executive. I invite him to introduce his officials.

Mr. Cathal Magee

I am accompanied by Ms Laverne McGuinness, director, integrated services, Mr. Liam Woods, finance director, and Mr. Brian Gilroy, commercial director.

Chairman

I invite the representatives of the National Treatment Purchase Fund to introduce themselves.

Mr. Tony O’Brien

I am chief executive officer of the National Treatment Purchase Fund and joined by Mr. David Allen, director of finance.

Chairman

I invite the official from the Department of Public Expenditure and Reform to introduce himself.

Mr. Tom Heffernan

I am from the sectoral policy division of the Department.

Chairman

I invite Mr. John Buckley, Comptroller and Auditor General, to introduce the 2010 annual report and the various chapters under discussion. The full text of chapters 43, 44, 46 and 48 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at audgen.gov.ie.

Mr. John Buckley

The chapters that fall to be considered today relate to primary care reconfiguration, the nursing home support scheme and protecting the State's interest where capital funding is provided for voluntary service providers. The challenge for the health service is to get maximum value by having its services configured in a way that best aligns with the task environment in which services are delivered. It determined as far back as 2001 that self-organising teams should form the core of primary care delivery mechanisms. These teams function in the context of wider networks known as health and social care networks. Moving away from the existing care group structure to a new mode of organising is a process that needs to be managed effectively in order that services are maintained while the new structures are being put in place and the new team-based way of working is embedded in practice.

In 2009 the HSE set itself a target of having a full national network of primary care teams in place by 2011. The status report we have produced suggests considerable challenges remain to be met. Putting some figures on it, there were no health and social care networks in place by the end of 2010. In addition, the functioning of the new primary care team structures was patchy, with only half of them reporting they had care plans for individual patients, while just over half had regular attendance by GPs at team meetings. Moreover, only a minority of primary care staff had as yet been assigned to teams and all staff continued to report within the existing care group structures. Furthermore, only 8% of team staff were fully co-located at that point. Based on the findings, it was clear that the HSE needed to address the wider management of the change process, including taking measures to embed a team mode of delivery. In addition, it needed to assign staff to the teams and put a structure in place to manage them.

A key efficiency consideration in team-based working is the location of the team members. Ideally, co-location should in the longer term provide the best solution, except obviously in areas of widely dispersed population. In the meantime, to achieve effectiveness and coherence, it is important that primary care services operate on a team basis, with members being linked through information and communications technologies, as well as personal contact.

In regard to the property solution, the HSE opted for leasing after comparing five main options, including leasing. In this respect, we considered that the appraisal process could have been more comprehensive and come earlier in the process In fact, the initial procurement step involving setting benchmark rental costs for the first major set of projects was approved on the same day as the appraisal of options was presented to the board.

The chapter points to some technical issues relating to the appraisal method, but I must be careful and emphasise it is unlikely they would have had an impact on the final decision. Some process shortcomings included the following, namely, first, the procurement decision should have been based on an appraisal that identified all the costs and benefits associated with each option, including factoring any costs projected to be released by disposal of property into all of the options; second, there should have been an alignment between the discount rate used and the cash flows. Both should either include or exclude inflation on a consistent basis. The method applied would have favoured leasing over purchase but not sufficiently to alter the result. At a programme level there should have been an overall estimate of the cost of the programme that would form the basis of an affordability test.

Overall, putting the two chapters together, the findings of the two reports could be synthesised into something on the following lines. A major initiative of the scale of the primary care team project needs to be planned and managed as a change management programme, with all elements, including property acquisition and disposal, forming part of this holistic approach. This type of change programme would need to have both the necessary delivery structures and systems to ensure the planned change was implemented and verified. The extended time for delivery of the programme makes it important that there be interim reviews, especially since changes inevitably occur in economic circumstances and developments in technology can facilitate joined-up team working to a greater extent, even where staff are dispersed.

Chapter 48 looks at the first year of operation of the nursing home support scheme. It outlines the arrangements for procuring private nursing home places and for the administration of what is called ancillary support, which is effectively a loan. This involves the State making payments of some of the costs subject to recovery in due course from the estates of recipients. Ancillary support is made available in around one sixth of all cases.

Persons may be accommodated in either private or public facilities. Publicly provided facilities cost almost half again the cost of private facilities. A further feature of the scheme was its retrospective application to persons who switched from the existing subvention scheme. The scheme ran into cost pressures from a combination of factors, including negotiated prices exceeding those estimated at the time; continuation of services through subvention and contract beds which had been expected to decline; and an increase in the length of stay of residents, which emerged.

Chapter 46 deals with the arrangements to protect the State's interest when it provides funding for facilities constructed on the property of voluntary bodies or hospitals. One hospital had mortgaged all its property, including facilities constructed with State assistance. The principal facility that had been funded in this instance was a clinical science building for which a grant of €200 million had been made available in 2004. The State had not got a charge or other security over the related facilities in that instance. The matter came to notice when the HSE sought to put security arrangements in place in respect of funding for a new ward block.

The HSE has sought to get around the difficulty by having a grant agreement drawn up under which the hospital undertakes to provide specific services at the new facilities; having a deed of covenant executed that obliges the hospital to use all previously funded facilities as a public hospital; and negotiating a right to buy back the site on which the new facilities will be erected should the prior security of banks be called in.

More generally, in response to audit queries, the HSE has now confirmed that other mortgages of publicly funded facilities at voluntary hospitals have not been identified, that its current practice is that deeds of charge will apply to all capital grants in excess of €200,000 and provisions to govern any disposals will be included in service level agreements.

Chairman

Thank you, Mr. Buckley. Would Mr. Magee like to give his opening statement?

Mr. Cathal Magee

I thank the Chairman and other members for the invitation to attend the committee and discuss matters arising from the four chapters of the Comptroller and Auditor General's annual report 2010. In accordance with the process, we have submitted detailed commentaries on each of the four chapters and detailed up-to-date reporting on some of the data included in the original chapters.

As regards chapter 43, the development of primary care teams follows the strategic direction set out in the primary care strategy back in 2001. At the end of December 2011, there were 425 teams in operation, which is 87% of the revised HSE target of 489. The pace of development over the decade has been slower than anticipated. The 425 primary care teams are at various stages of maturity and development. They provide services to a population of more than 3.4 million with more than 3,000 staff and in excess of 1,592 GPs participating.

The HSE welcomes the audit carried out by the Comptroller and Auditor General on primary care teams and accepts the recommendations set out in the report. The HSE has already made significant progress in addressing some of the shortcomings highlighted and has implemented many of the recommendations. The audit recommended that considerable work is needed to achieve greater integration with local secondary care and we are working towards that objective. The implementation of clinical care pathways for chronic diseases will lead to improvements in integration with our hospital services and simplify access for patients. We are also working with each hospital to simplify patient discharges from hospitals to the care of primary care teams.

The governance and management model, including the change management model, for primary care teams is currently being reviewed to take account of future models of care proposed under the programme for Government. A joint working group comprising officials from the Department of Health and the HSE has been set up by the Minister of State, Deputy Shortall, to develop the primary care model in line with the programme for Government.

As regards chapter 44, in parallel with the development of primary care teams, the HSE has been pursuing an initiative to procure appropriate primary care centres to accommodate these teams. Having all primary care team members located in one primary care centre is the preferred option which allows services to be delivered on a single site, providing a single point of access for the user and encouraging closer team working among health professionals.

There is no contractual commitment on GPs to participate in primary care teams. Accordingly, in the development of primary care centres, a condition was required to ensure GP presence in those centres and their participation in the teams.

The assessment of delivery options for the centres was undertaken with an imperative that primary care teams would be co-located with GP groups in a single location. This was already policy and therefore any evaluation of the most economically advantageous way of delivering the centres would start with this core delivery requirement.

On chapter 46, which concerns protecting the State's property interest, the HSE agrees with the Comptroller and Auditor General's conclusions. The HSE has always registered security against third party assets where capital grants are made to section 39 agencies. In the case of the larger voluntary hospital sites, the HSE has taken security, since 2008, over all the main hospital assets whenever a capital grant is now made.

When the HSE sought to put in place this security arrangement with the St. Vincent's Healthcare Group, SVHG, in 2010, when it was funding the now under construction €30 million ward block, it emerged that a €200 million grant for the clinical science building had been made to SVHG in 2004 - prior to the HSE - without the funded assets being secured in favour of the State, that is, through a legal security instrument. The St. Vincent's Healthcare Group, in obtaining bank funding for its private hospital, had given funders a floating charge on all its assets. The creation of this security made it impossible for the HSE to secure first ranking security for the State over the entire public hospital. The HSE brought this issue to the attention of the Comptroller and Auditor General at that point and went into negotiations both with the bank and the hospital group to come up with at least the most satisfactory alternative. The situation at St. Vincent's Hospital cannot be repeated on any assets funded since 2008 due to the 2008 protection of the State's interest introduced by the HSE. We have circulated a copy of those regulations.

On chapter 48, the nursing home support scheme, known as fair deal, was introduced in October 2009. It is a demand-led, means-tested, resource capped national scheme. Its purpose is to introduce more equitable and transparent financial support for people in long-stay residential care. It provides a uniform co-payment system of financial support irrespective of whether the person is in a public or private bed.

At the end of December there were 22,341 people supported under the scheme.Additionally, there were 583 persons whose application was determined to final stage but who were still on the national placement waiting list. It is projected that 23,611 people will be supported under the scheme during 2012, which represents a projected net increase of 1,270 persons.

This concludes my statement and, together with my colleagues, I will take any questions that you may have, Chairman.

Chairman

Thank you, Mr. Magee. May we publish your statement?

Mr. Cathal Magee

Yes, Chairman.

Deputy Anne Ferris

I welcome Mr. Magee and all the other witnesses to the committee. I thank him for supplying the report and, more importantly, the updated information. As he knows, the chapters we were going on were the 2010 ones, so the updated information he has supplied is very useful. I have some questions on chapters 43 and 44 concerning the primary care teams and the primary care centres. As Mr. Magee indicated, the primary care strategy was set up in 2001. It was estimated that 1,000 primary care teams would be required for the country and that there would be 500 GPs, 2,000 nurses and midwives and a significant number of health care professionals assigned to these teams. The roll-out started in 2007 but the report of the Comptroller and Auditor General shows that the project has lagged behind targets considerably.

Some questions have to be raised in terms of progress. Some of the teams that have been set up clearly do not have the full complement of staff but they are described by the HSE as functioning teams. There were 425 teams in operation at the end of 2011 and 489 are planned, which means the HSE is 87% of the way to meeting the target. Some 1,592 GPs and 3,117 staff members have been assigned to these teams. How many of the 425 teams currently operational have a full complement of staff, such as physical and occupational therapists and how many lack GP involvement? It would be a serious issue if a team was working away without a GP being involved. The GP has to be at the centre of a team because he or she is the person who sees the patients and refers them onwards. How many of these teams meet monthly or more frequently?

How many vacancies cannot be filled because of the moratorium? The Minister for Public Expenditure and Reform was reported in yesterday's newspapers as stating that 3,500 people are expected to leave the health service between September 2011 and the end of next month. That will put a further burden on the service. How many positions have been affected by the moratorium and what does Mr. Magee expect to be the position after the deadline has passed?

Mr. Cathal Magee

Some of the data is set out in our commentary, which has been circulated. I will ask my colleague to supply the details to the Deputy.

I will make some general remarks. In regard to the primary care strategy, there were only ten teams in total during the period between 2001 and 2006. The activation of primary teams really started from 2007. It was assumed in the strategy set out in 2001 that extensive recruitment would take place for up to 2,000 nurses and therapists and 500 to 600 GPs. It was also intended, in financial terms, that incremental funding would amount to an additional €650 million over a ten year period. The reality is that the funding is more of the order of €50 million and the number of additional staff recruited is in the order of 400 or 500. The investment in resources and infrastructure which underpinned the articulation of the primary care strategy in 2001 was very ambitious and it has not been delivered.

Several elements are critical to the implementation of a successful primary care strategy. On the strategy side, everybody from stakeholders to policy makers agrees that the primary care strategy is central to the effective functioning of the health care system. There are several key enablers for the strategy, one of which is our contractual relationship with GPs. As self-employed private practitioners, GPs are not obliged to participate in primary care teams and they often provide services from their own private locations. We must address these contractual issues in engaging them with primary care services. That said, significant progress has been made and 1,500 GPs have already participated, although some are more active than others.

Infrastructure is also a key issue. It is important that there is a single centre and that all the professionals, whether therapists, nurses or general practitioners, work from the same centre. Many of our community practitioners work in substandard accommodation over multiple locations and it is difficult to move from a single disciplinary approach to a multidisciplinary approach without collocation of the relevant professionals. As noted in our report on the development of primary care centres, we are well behind in the development of that infrastructure. Developing the infrastructure also depends on the presence of GPs. Mr. Gilroy will outline for the committee the details of how we developed the infrastructure. It is imperative that GPs are involved because there is no point in developing primary care infrastructure if GPs will not work from it. The commercial arrangements that underpin the strategy have been dictated by that reality.

Other issues also arise, as Deputy Ferris pointed out, in regard to resources, funding and information technology. If we are serious about moving our model of care from acute based to primary care at the lowest level of cost and complexity, a major change management and investment programme will be required. This is being considered by the Minister of State at the Department of Health, Deputy Shortall, and a great deal of work is being done to develop ways of implementing the strategy. Incremental funding of €20 million has been made available in the current programme to accelerate the process.

I will ask my colleagues to provide a precise answer to the question on numbers because they are set out in most of the documentation we have supplied.

Ms Laverne McGuinness

All of the 425 primary care teams that were operating at the end of December have GP involvement. We cannot define them as operating unless the GP is there. A further 32 teams were in development without GPs at the end of the year. Some are more advanced in rolling out programmes in falls prevention and diabetes, whereas others have just started.

In terms of staff shortages, the strategy as articulated in 2001 proposed to put in place an additional 2,000 staff between nurses and therapists. As appendix one shows in detail, we have put in place 600 additional staff, for whom €50 million was made available as opposed to the €650 million initially envisaged. This difference contributes to the slower acceleration of the programme. All the staff who previously worked in primary care, as well as community care services in some cases, have been reassigned to either operational primary care teams or teams that are still under development. The total number of these staff is over 3,700.

The moratorium is not why vacant posts are prevented from being filled. The cause is more due to financial issues and staff going on various types of leave. The equivalent of 453 staff, not all of whom are full-time, have gone permanently. Some of them are on various types of leave and 106 of those have not been replaced for financial reasons. An additional €20 million has been provided under the service plan for 2012 to replace as many posts as possible in primary care.

Deputy Ferris also asked the number of teams which have a full complement of staff. The strategy envisaged that four GPs would work on each primary care team and our average is 3.8 GPs. The strategy proposes five nurses, between public health nurses and registered general nurses, and we have achieved 3.4 nurses, who sometimes straddle a couple of teams. There should be approximately one occupational therapist and 0.5 to 1 physiotherapist per team and we probably have reached 0.5 to 0.6 for occupational therapists and 0.7 for physiotherapists. Some of our teams are very well developed with the additional support of community mental health nurses, dietetic services and audiologists. These are part of the wider health and social care network.

Mr. Cathal Magee

The Deputy also asked about the impact of the end of the grace period in February. We do not yet have definitive figures for the staff who may go but based on the level of interest and number of application, approximately 500 people who work in the primary care area have at least shown an interest. Approximately 195 of these individuals are nurses and the remainder are from a mix of therapy, medical and administrative staff. The impact will be felt across disciplines but there is a substantial -----

Deputy Anne Ferris

How will it impact on the primary care teams if these individuals leave? Will they be replaced?

Mr. Cathal Magee

The budget makes provision for €20 million, and potentially up to €25 million, for recruitment into primary care. There is a process set up jointly with the Department under the Minister's direction to look at where those priorities will exist and what disciplines those posts will be approved for. There is also a modest amount in our budget, approximately €16 million, for overall replacement across the whole system and that clearly is quite small. There is no question, therefore, that gaps will emerge in our primary care delivery system when these people leave and are not replaced but we have funding and general approval to do some recruitment and, obviously, that will be targeted at the areas in which major gaps emerge. Various contingency arrangements will be put in place to try to cover the service and priorities in different geographic areas and that will be quite a challenge.

Deputy Anne Ferris

Does Mr. Magee envisage that teams and centres close to each other will be shared in a location?

Mr. Cathal Magee

Yes, at the moment teams come together. A number of teams can even meet jointly. Two or three clinical teams may meet jointly because there is a limitation on the number of meetings people can attend. Work practices, better diary management, better organisation and more efficiency underpin the new model of working, as well as trying to concentrate the work of our valuable professionals in delivery of important health care and trying to deprioritise work that is not about the delivery of care. It is assumed with less funding and resources, we have to be more efficient, have more productivity and better effectiveness. We know from studies of productivity that there is opportunity for improved productivity in our community and primary care services. There are challenges but I think there is good buy-in within the health care system to try to cope and continue to deliver the service people need in the community and the primary care environment.

Deputy Anne Ferris

I agree that the way forward is to have primary care teams in centres throughout the country where people can go and access all the services they need rather than having to go to hospital. Is Mr. Magee saying that the teams are meeting regularly enough and talking to each other?

Mr. Cathal Magee

When one looks at the scale of this change from a unidisciplinary approach to a multidisciplinary approach, with disparate members of a team in different locations coming together physically in one location, it is a big change programme affecting behaviour, attitude as well as practice, as the Comptroller and Auditor General said. If we look at the full spectrum of 400 teams, probably one third of them are doing extremely well. If we go to some of the centres, it is impressive to see multidisciplinary teams dealing with care plans for 16 cases at a single meeting and that is best practice. If we could get all our teams up to that level of commitment and functioning, then we would have a hugely important service. If we could get all teams to adopt best practice, we would transform our primary service.

However, one third of the teams are average to good and the remaining third are not working effectively. We are not happy but they are also at the earlier stages of development and there is a cycle of how teams develop. In that sense, it will need a great deal of development work to coach, mentor and develop these teams to full functionality.

Deputy Anne Ferris

Of the one third that are not working well, could Mr. Magee give us an example of the reasons for that? I acknowledge some of these may only be setting up but, for example, were some working well and for some reason are not working well now? Is it because the GP has left?

Mr. Cathal Magee

It can be demands on people's time, workload, pressures, lack of administrative support, not having a single location where people are co-located and problems with geography. There are many genuine reasons teams have not got up to the level of functioning. The commitment to the model may also not yet be there but there is a range of reasons. We have set out in the background documentation some of the reasons that have been articulated but they are multifaceted. That is where the development effort needs to be made. In a normal distribution, one would expect that but the potential with the impacts on resources is to try to bring everybody up to best practice standard and that then would present a huge capability in primary care.

Deputy Anne Ferris

Mr. Magee mentioned state-of-the-art centres. I am delighted that Deputy Harris and I will attend the opening of the new primary care centre in Newtownmountkennedy, County Wicklow, tomorrow. It describes itself as state-of-the-art and it will house physiotherapists, occupational therapists, dieticians, speech therapists as well as GPs. It will be a great asset for the county. I was also impressed by the feature on the new primary care centre in Waterford in the magazine. It has, as Mr. Magee described, what all the other centres aspire to but there are problems in various areas.

I refer to the lists outlining the status of the centres the HSE hopes to set up. A few are operational, including Newtownmountkennedy. However, many are listed as having the letter of intent withdrawn, including my home town of Bray. I am sure Deputy Harris will also refer to this later but we have great hopes of a primary care centre starting up in the town. We had discussions with HSE officials about that in the context of the Orchard nursing home site and we were assured they were there or thereabouts on it. The nursing home closed a few years ago much to the dismay and concern of the elderly and local residents in Bray and surrounding areas. One GP practice in the town is favourably disposed to participating in a primary care centre. I do not wish to be too parochial about this. Why were so many letters of intent withdrawn? In particular, why was the letter for Bray withdrawn, when it seemed the HSE had access to the site owned by the Department and many elements were in place? Now it does not seem that the centre will happen.

Mr. Brian Gilroy

The main reason for withdrawing the letter of intent is not to say we will not have a centre in those towns or there will not be a leasing solution but we would have issued an initial letter of intent in 2008 or 2009 based on current prices and it is not practical to leave those prices in the market for numerous years without any development. The Deputy will see that some schemes have moved beyond the letter of intent and the reason we kept prices in those cases was that considerable money had been spent on the projects and they were nearing conclusion of either planning permission or final funding. Listed under letter of intent withdrawn or never issued toward the rear of the document are towns where no progress was made. Initial submissions were made but little expense was incurred and no progress was made. It is one of the points in the Comptroller and Auditor General's chapter where he questioned why we would leave prices in the market for a long period but we try not to do so now. We only issue letters of intent where there is a real solution possible. We have long stop-dates in both the letters of intent and also in the agreement to lease. That is the reason it is not there.

On the mid-term review we are talking about, particularly the Minister of State with responsibility for primary care is very involved in that review. As we have said in much of the documentation, if the situation was to change with regard to contractual commitments on GPs to participate in primary care centres, then one would revise the whole strategy. However, one of the pieces the whole cost-benefit analysis looked at was if we build these centres ourselves, as we have done in some cases, we would end up, as the State, funding twice the level of infrastructure as we would need to do in this version. In this version, the State only leases its piece and the GP owners lease their piece - so we are not funding that piece. That is backed up even to this day. We have a primary care centre due to open shortly where both the IMO and the GPs in question are demanding access to the centre for free, not paying even an ongoing fairly discounted rate. The assumptions in 2008 in the business case are absolute and we still believe it provides value for money as it is. However, if the Minister was to bring about changes to the GMS that created a different contractual obligation to participate in teams allowing one to pursue a different option of the State building these centres or other variant of it, then one could look at PPP bundling, for example, if the State was to do it, whether it was through traditional means or through PPP. That is where, for example, the Orchard site in Bray could come into play, but until there is definition on that strategy if there is no change on the contractual commitment on the GMS side, then I would still recommend that we continue with the lease option. For every town - all the members, when they look down the list, will see some of their own towns - it does not mean we would not pursue it. If someone comes in with an offer on these towns, we would open up discussions with them. However, it would have to be on today's prices, not on 2008 or 2009 prices.

Deputy Anne Ferris

Regarding a centre such as the Orchard nursing home in Bray, there is another organisation that provides many of the services provided in a primary care centre but not by the HSE. I refer to the Bray Cancer Support Group which sought to get access into the Orchard nursing home and was given some kind of comfort about it by HSE officials before it was put on hold because of the primary care centre. It states here that in Bray no letter of intent was ever issued so the HSE did not get that far in the Bray centre. Would the HSE be open to a community service such as that, which is providing a service to County Wicklow and south County Dublin? Patients are being referred by all the hospitals and it is cramped for space and needs new premises. The Orchard nursing home would be an ideal temporary location for it. That organisation has been stonewalled so far.

We have raised this with the HSE at a senior level although not with Mr. Magee. I thought I would take the opportunity to raise it today. It is ludicrous that that organisation has been seeking new premises for two years and here is a perfect temporary solution with the option in the future to become part of the primary care centre and be located there. I do not want to put the HSE representatives on the spot, but I ask them to investigate it and come back to me on it. I am sure my constituency colleague, Deputy Harris, will also raise it with the HSE representatives before the committee. We should consider the wider picture and what is needed in communities. If we cannot provide the centre now for primary care, we could provide something else.

Mr. Cathal Magee

I thank the Deputy. I will do so.

Deputy Paul J. Connaughton

I welcome the witnesses. Further to what Deputy Anne Ferris was saying about the primary care teams, I have no issue with primary care teams which is the right direction to take. However, as all these services move into one location, they leave empty premises behind. I have been contacted by a number of people in small rural areas who would have a use for those premises in order that they can be run by the community and for the community. They say that the HSE has responded indicating it has no interest other than to sell the property. I have two issues with that. First, given the trend in property prices, such properties are worth considerably less than they would have been a few years ago. Second, these people are not setting up on a commercial basis but for the community to be run by local groups to deal with other issues in the community not necessarily on the medical side of things. Why are those requests being ignored? For example, hopefully the primary care team will be established in Athenry. The village of Monivea is about three or four miles away. The people in the area respect the fact that it might make more sense to bring all the services together. However, why should premises in that village be left vacant? People are not being listened to.

Mr. Brian Gilroy

It is unfair to say that across the country people are not being listened to and such requests are turned down, because in many cases voluntary groups are accommodated in a HSE site. It is done on a centre-by-centre basis. However, one of the premises on the broad submissions that we made is that we would dispose of vacated assets and would not leave them as vacated assets. The Deputy is correct in saying that the movement in the property market would raise questions over some of that. So some of the properties we have brought to market we have withdrawn because we did not achieve value. Where we are achieving value we are disposing of premises. All the disposals go back into health infrastructure. It is a site-by-site assessment each time, but we are trying to drive down the number of vacant properties. I am not speaking about the centre to which the Deputy refers because I do not have the details in front of me, but in some cases we have ended up in a scenario where an accommodation would be made and it ends up costing us money because we are expected to maintain the building, there is significant refurbishment to the building and then there is an expectation that we will fund the revenue service in the building because we have provided the building. So it is a multifaceted assessment, but we can look into the individual case the Deputy mentioned. We do not have an issue and in many cases we have accommodated them. Particularly outside health it is more appropriate that we transfer the asset to the State agency dealing with the service in question. We do transfer assets to local government in many cases where it is a service it may want to accommodate and then it is up to it to put securities and investment into the assets at that stage.

Deputy Paul J. Connaughton

I understand that. While it may not be true throughout the country, in this case the local people have come back with a plan indicating they would not expect the HSE to do anything with the building - they literally just want the building. They have asked to lease it for two years and if they cannot make it work it will revert to the HSE to do what it wants with it. They understand the HSE wants to move the property because like every other agency, it wants to get funding to service other areas. Where groups approach the HSE with a very clear plan as to what they want to do for a short period at no cost to the HSE, they should be considered favourably.

Mr. Cathal Magee

We will follow-up on the two cases the Deputy has raised.

Deputy Paul J. Connaughton

The fair deal is relatively new having only been operational for two years and perhaps some issues are only now arising. Why were there concerns over the finances running out in 2011?

Mr. Cathal Magee

It was a combination of the fact that the incremental funding for fair deal in 2011 over 2010 was €8 million to €9 million - I think there was additional funding. There was an additional funding and in the early part of the year demand was beginning to grow significantly on a month-by-month basis. Second, there were price increases approved through the NTPF of, I think, 3% to 4% at the time. So it is a resource-capped scheme in that we cannot pay out money we do not have in the subhead of the Vote under fair deal. So the first three to four months clearly were showing run-rates and trends which were very significant from a number of points of view.

There was another issue regarding arrears. The construction of the fair deal scheme was on the basis that if one had an interest and one was successful one could get retrospective financial compensation from the date the scheme came into operation. It was a device introduced so there would not be a full avalanche of claims and applications at the time. An eligible person who delayed his or her application could get retrospective compensation.

Therefore arrears began to mount up, sometimes of an average of €15,000 to €20,000. The scheme has a particular dynamic and the projections of what this would cost began to be of concern. We took a view to pause the scheme. We indicated that we were not prepared to pay the pay increase to private providers; we wanted policy changes on the arrears beginning to mount up; and we wanted to look at how to manage the demand side. This is the combination of reasons and the date has been discussed. These are the facts. As a result, policy changes were made with regard to arrears; the price increase was deferred until the very end of the year; and we received additional funding of approximately €15 million mainly through additional capital and IT spend. If one looks at the analysis one will see that we overspent on our subhead at the end of the year. My colleague Mr. Woods may wish to add to this.

Mr. Liam Woods

The main drivers are policy demand and survival rates. The length of time people survive in nursing homes is expanding which is also a factor. As the CEO stated, the trend in arrears is very difficult to project because it is dependent upon the behaviour of applicants which is not determined until they apply. There is no historic trend in fair deal. As the Chairman referenced, it came into existence in October 2009 and 2010 was the first full year in which there was a trend.

Another factor is the rate at which people convert from subvented and contracted arrangements to fair deal arrangements. Many additional resources are being spent on fairness. This needs to be borne in mind because it is having an effect on the overall financial position.

Deputy Paul J. Connaughton

Does Mr. Magee believe what happened last year will happen again this year?

Mr. Cathal Magee

No, because €55 million additional funding has been provided. We have capacity for a net increase of 1,270 places which is almost double the net increase of the previous year. We are satisfied based on current demand forecasts that the funding of fair deal is adequate to meet demand.

Deputy Paul J. Connaughton

The 1,000 extra places can be afforded but not what it is known will come into the system.

Mr. Cathal Magee

Correct.

Mr. Liam Woods

We remodel this every month based on what is actually happening.

Deputy Paul J. Connaughton

At present, what is the length of the waiting list to get into the fair deal scheme?

Ms Laverne McGuinness

A total of 583 people were on the waiting list at the end of December. Their applications had been determined so they were ready for the financial stage but they had not yet got in. This must be considered as well as the rate of turnover. The turnover rate per week is approximately 400, with 300 on the private side and 100 on the public side.

Deputy Paul J. Connaughton

How long does it take from the moment of application to go through all of the checks to be approved?

Ms Laverne McGuinness

Depending on whether the forms are correctly completed and all of the information comes back the average is approximately four weeks.

Deputy Paul J. Connaughton

I have dealt with quite a number of people who must put a relative into a nursing home at a cost to themselves or the person remains in hospital. People believe the length of time on the waiting list is getting longer. They also believe they do not receive information quickly enough on whether there is an issue with an application. This is a great expense for people but when it comes to family members one does not worry about the expense. However, it is putting many families under huge financial strain. Is there any way the process can be speeded up?

Ms Laverne McGuinness

Efficiency has been built into processing of the applications. Much depends on whether the applications have been filled in correctly and whether all of the information has come back as efficiently as possible. Issues arise in a number of places, such as hospitals, with regard to this and we have a liaison officer in the central office working on trying to accelerate these. If the Deputy is aware of particular cases with difficulties I will be happy to speak to him about them.

Deputy Paul J. Connaughton

The HSE and the health sector are working with diminished budgets. Have we reached a stage where home care packages or carer's allowance would be considered for somebody applying for the fair deal scheme? I imagine taking care of someone at home is far cheaper than taking care of the person in a nursing home. Is everyone who applies for the fair deal scheme considered for it without considering other ways of taking care of the person?

Ms Laverne McGuinness

Applications for the fair deal scheme go through a clinical assessment process, the common summary assessment record, CSAR. This establishes whether someone is deemed suitable clinically for a nursing home. We carried out an audit of more than 1,200 cases last year and we are working with clinicians to examine whether highly intensive home care packages may have been possible in some of the cases.

Nothing exists between a high-dependency home care package and a long-term care bed. In the 2012 service plan we will examine with the Department whether intermediate care beds can be put in place. This would mean rather than going into long-term care one might require a period of intensive support, perhaps for two, four or six weeks, over and above any home care package. Perhaps then people may be able to return to their homes with a home care package rather than going into long-term care.

Deputy Paul J. Connaughton

Would this be discussed with the applicant at the time?

Ms Laverne McGuinness

Yes. Everything is discussed with the applicant and the applicant's family.

Deputy Paul J. Connaughton

I believe the rates for a nursing home are set by the NTPF. How is this carried out?

Mr. Tony O’Brien

The Act prescribes that the NTPF does this by negotiation rather than by setting or regulating prices and has regard to market rates in a given area, defined as a county. Fundamentally, it is a negotiated process. Some nursing homes will not agree to enter an agreement with the NTPF but others do. The Act prescribes that the agreements entered into by the NTPF relate to the maximum amount that will be paid. There is no differentiation as to acuity because at present there is no agreed scale by which acuity differentiation - that is to say the level of dependency - can be reflected in price. Therefore it is a single price for each nursing home.

Deputy Paul J. Connaughton

So the NTPF sets the price and the HSE pays it. Does the HSE negotiate it?

Mr. Cathal Magee

No. We sought legal advice on this matter and the interpretation was that we did not have a basis for negotiating below the price set by the NTPF.

Mr. Liam Woods

The Comptroller and Auditor General picked up in his report that the legislation refers to the word "maximum" with regard to the price negotiated between the NTPF and a particular nursing home. Legal advice to the HSE is that we do not have authority to pay less than the maximum which is part of a contract between the NTPF and a nursing home.

In 2011 there were a total of 154 reviews of private nursing home prices. More than 400 private nursing homes are being partially funded through the fair deal scheme at present. Of these, 42 prices decreased and 112 increased, with the average increase being 4% or 5%, although this varies depending on the individual nursing home.

Deputy Paul J. Connaughton

Do we expect more this year?

Mr. Liam Woods

It is not a matter into which the HSE has input. We have just run our January payment files and we can see some increases coming through.

Deputy Paul J. Connaughton

Of how much?

Mr. Liam Woods

I do not have the quantum yet but the rate of increase is approximately 4%.

Deputy Paul J. Connaughton

I am trying to find out why it continues to increase annually.

Mr. David Allen

We need to be careful about what we say in this forum about 2012 given that those on the other side of the table in the negotiations are commercial operators. There has been some success in renegotiating reductions with private nursing homes. Approximately 45 nursing homes have reduced their prices in the past three or four months. Offsetting this, some inflationary clauses were agreed in 2010 and they kicked in this month. By and large, these have offset some of the reductions. Since April 2010, the overall increase has been the same as inflation.

Deputy Paul J. Connaughton

Recently, it was announced that some public nursing homes were in need of refurbishment at a large cost. How many exactly?

Mr. Brian Gilroy

We can provide an analysis of that. I do not have the figure with me, but the cost varies depending on the refurbishment required. Some refurbishments are minor whereas others, to be more cost effective, would involve replacing buildings.

Deputy Paul J. Connaughton

Will they be refurbished?

Mr. Brian Gilroy

It is based on a centre-by-centre assessment.

Mr. Cathal Magee

The estimated cost of full refurbishments was in the order of €500 million or €600 million. That level of investment is not available in the capital programme, but a number of new units and refurbishments are under way under the programme.

Deputy Simon Harris

I welcome Mr. Magee and his team and thank them for attending. To start on a positive, when we previously met, a number of members and I complained about the quality of information we were receiving from the parliamentary affairs division and its response times. I have noticed a marked improvement in the flow of information. As a public representative, this is welcome.

Primary care is a lovely concept to which every politician and every person in the health service can subscribe and aspire. People are treated in the community and every service is under one roof. The most basic level of access to primary care is at general practitioner, GP, level, but the renewal of medical cards has been a fiasco. Delaying the processing of medical card re-applications appears to be an unofficial policy. I am sure that Deputies on all sides of the House have noticed it. Either someone in the centralised unit in Finglas keeps losing a large number of applications and needs to get a filing cabinet or there is something more sinister happening. The number of my constituents it is claimed have incorrectly filled out forms does not tally with what I know of the individuals. This has been a problem for a long time.

I fully support the centralisation process. I assume it was meant to accelerate procedures, to be more efficient and to save costs, aspirations to which we can all subscribe, but this has not been my experience. Being able to track a medical card application online is helpful and progressive, but an application online file might not have been updated in a number of months.

Some of the reforms introduced to the medical card application process, for example, extending the period before people need to renew, are pragmatic and logical, but why is paperwork constantly being lost? Vulnerable, older and sick people go to extreme efforts to gather various items of documentation and send them to the centralised office only to be told that they were never received, they were lost or they were never sent. There are too many instances for me to believe this to be the case. Something is going on. I hope it is merely chaos, the lesser of two evils. Any alternative would be of greater concern. What is the situation now?

Ms Laverne McGuinness

The centralisation process started in July. While it has brought efficiencies, it has also introduced greater probity controls. If forms are not correctly completed, they are rejected or requests for additional information are made. We are moving to self-assessment, a model previously applied in the case of people of over 70 years of age. We are also working to tailor the forms to make them more user friendly and easier to complete. If an applicant is in receipt of a rent allowance or so on, we will link directly with the Department of Social Protection so that we do not need to ask the applicant for the information.

The Deputy's point is valid in terms of the ease of reference, but we are checking to ensure that all details are returned and applications are valid. A number of years ago, an issue arose in that not enough checks were being carried out, which led to the issuing of what were termed "ghost cards". The new level of probity in the Primary Care Reimbursement Services, PCRS, is working effectively to deliver more savings.

I assure the Deputy that there is no blockage or unwillingness to provide medical cards. Last year, we provided more than 85,000 extra cards. The figure this year will be more than 100,000. Although the form might be a little cumbersome, 85% of correctly completed applications are processed within 15 days, which is one of our service plan's targets. The work to make the forms more user friendly and to put them online is being progressed. We also text status updates to our customers. This is a new procedure, having only started in July, but we are moving towards it.

We have key links with each local health office. Even though the process is centralised in Finglas, if there is an issue or help is required when completing a form, people can go to their local health offices. We ensured that service remained.

Deputy Simon Harris

I welcome the update. The first piece of advice that I give my constituents when they approach me about their medical card applications is to photocopy every document they will send because they are nearly guaranteed to be asked to send the documents again. I am not trying to be cynical or smart.

Deputy Anne Ferris

It is true.

Deputy Simon Harris

This is my direct experience of dealing with the service. If the delegation could note and act on my comments, I would be grateful.

Mr. Cathal Magee

We acknowledge that there are issues, as have been raised by a number of representatives. We are working through them, but there is no policy to delay the efficient processing of medical cards. These issues are under review in Finglas.

Deputy Simon Harris

That is good to hear. I welcome that the delegation has referred to computers and systems talking to one another. For example, Revenue could speak with the Department of Social Protection when the former wanted to garner additional revenue from pensioners. I am pleased to hear that the same level of computer communication is beginning to happen in this instance.

I wish to deal with the issue of GPs buying into the primary care service. I take Mr. Magee's point about GPs being individual professionals with their own contracts. Although the matter is not pertinent to this forum, the General Medical Services, GMS, contract may need to be examined. I was concerned when I read appendix 2 in the documentation that the delegation kindly sent us regarding the update on the Comptroller and Auditor General's report. Picking an area at random, the number of primary care teams in County Wicklow-----

Chairman

Completely random.

Deputy Simon Harris

Yes. The Chairman will be given the national perspective in a moment. Appendix 2 outlines GPs' engagement in three columns. The number of primary care teams where GP engagement is not progressing is eight, the number of GPs not engaging is three and the number of GPs who have withdrawn from attending clinical team meetings, CTMs, is six.

The most interesting and worrying column is the fourth column, which details the reasons for non-engagement with or a lack of participation in CTMs. In County Wicklow, which Deputy Ferris and I represent, the column reads: "Mainly payment issues. Have not referred any patients for discussion at CTMs. (9 GPs)" In south Dublin city, the appendix states that GPs never engaged and were not interested in participating in CTMs. In Mayo, the GPs' reasons for not participating were a dissatisfaction with HSE cuts in GP fees., etc. In Galway and Roscommon, the reasons cited were the reduction in payments and the distance to meetings. In the Clare part of the mid-west, the reason was the lack of benefit. In the Limerick part of the mid-west, no reasons were given. In the north Tipperary and east Limerick part of the mid-west, the reason was time constraints. In Cavan-Monaghan, GPs did not wish to attend.

All of this is worrying. I appreciate that it refers to specific numbers but, from the delegation's perspective of trying to deliver on Government policy, it is of great concern that the HSE is meeting this level of resistance. Correct me if my analysis is wrong, but what if the public was to hear that some GPs were refusing to participate in CTMs because they were not being paid to do so or they were dissatisfied with their exorbitant fees being cut? We cannot have a situation in which any interest group or any single stakeholder blocks the progression of Government and, therefore, HSE policy. Will the witnesses comment on that? I appreciate that Mr. Magee has already mentioned the constraints and difficulties from the fact that independent professionals are operating and he must coax them. How is that process going? When I hear GPs indicating they are not participating in the roll-out of primary care because they are upset over salary cuts, it is worrying. What is even more worrying is when they say they do not see value in it and it is a waste of their time.

Ms Laverne McGuinness

None of the GPs is compulsorily required to participate in primary care teams so much is done by engendering their goodwill, meeting with GPs and showing the positive benefits. In order to permeate this throughout the system we have had a number of GPs meet other GPs and outline the benefits in primary care teams. They are shown the centres and provided full access. If a GP works single-handed in a practice, he or she would not have access to a physiotherapist or occupational therapist but they would be at the doorstep if he or she joined a primary care team. It is not in the contract so some GPs would be of the view that as a result, they would not have to do it. The only way forward is to try to encourage GPs to join because there is a benefit in it for them.

There are some pocketed areas where we have had significant resistance, such as the north east and the areas mentioned by the Deputy. There is no doubt the financial emergency measures in the public interest, FEMPI, reductions in fees had an impact and we did a snapshot analysis in this regard. We cannot compel GPs to take part, which has an impact on the slowness of pace for the remaining primary care teams. We have 32 teams in development but they do not currently have GPs participating, so we could never call them fully functional until the GPs come on board. I am hopeful about the development of clinical programmes and the roll-out in 2012 of the programme for chronic disease, particularly diabetes. That is one of the main issues that GPs refer to the hospital and the hospital would refer back to the GP. We hope that will encourage more GPs to come on board and participate in primary care teams.

There is an issue because we cannot compel GPs to participate. Mr. Brian Gilroy articulated the strategy on our primary care centres, where there must be participation in the primary care teams and the GPs must go to those buildings.

Deputy Simon Harris

I thank Ms McGuinness for putting this information in the public domain as it is a little known story. If most people were asked the reasons for the delay in the roll-out of primary care, they would presume it would be budgetary constraints on behalf of the State or HSE. They would be rather surprised to hear that in some cases the delay in the roll-out of primary care teams at centres is specifically due to GP health professionals on the ground not being willing to engage. We must set this in a context of many other GPs engaging in the process, which is extremely positive. I acknowledge that, although the issue remains a concern.

I will move to an issue referred to by the Comptroller and Auditor General in some detail in chapter 44, namely, the appraisal of determination of which model to go for in building primary care centres. I have read the update, which is much more encouraging than our position when the Comptroller and Auditor General made his examination. It would be fair to say that the Comptroller and Auditor General's review of the appraisal method used by the HSE was rather scathing, especially with regard to learning lessons from the past. The assessment did not quantify the expected impact of the various accommodation options on service users, which one would imagine would be the primary aim in providing health services in the community. We must consider the impact on the person using the facility, how far is it from home and whether it is easily accessible from transport routes. Inflation was not included and there was an assumption that the operating costs would be the same across all models, which clearly would not be the case. Other elements, such as construction costs, are in the report and there is no need to read them out. Will the witnesses give a reassurance of the lessons taken from that analysis?

Mr. Brian Gilroy

As can be seen in the response, we do not agree with some of the report. The analysis was carried out in line with guidelines from the Department of Finance and, in effect, they have just been revised by the Department of Public Expenditure and Reform. For example, there is a specific statement that inflation should not be included and a discount rate should be used. The rate we used at the time was in use in practice at that stage and was used by the National Development Finance Agency. We do not agree with some of the criticism, as can be seen in the response.

Some of the wording may also be misunderstood. For example, the cost-benefit analysis considered benefits and impact on patients, as well as clinical efficiency in the new services. However, it did not put a euro value on these and ranked them comparative to each other, which is a legitimate form of cost-benefit analysis. We defined the costs in euro and the benefits relative to each other in each scheme. That was revised during the programme as well, as operational centres were brought back in, with the teams operating re-scoring the benefits. There was little variation in that. It is just a misunderstanding because we did not put a euro value on the benefits; we did not see it as appropriate to do so and it was better to rank them relative to each other.

Deputy Simon Harris

The HSE operated under the guidelines of the Department of Finance.

Mr. Brian Gilroy

Yes.

Deputy Simon Harris

Considering the HSE followed guidelines laid down by Departments, which is the only appropriate model to follow from their perspective, does the Comptroller and Auditor General see a shortcoming in the guidelines?

Mr. John Buckley

Irrespective of the guidelines, it would be a principle that if inflation is factored into cash flows, a rate must also be used that takes account of inflation. We found that the rate factored in inflation but the cash flows did not. The implication is that there would be a discounting, using a higher rate than would be warranted for the way flows are measured. Therefore, when flows of money are in the future - as leasing costs would be - they would be discounted much faster and result in a lower net present value.

We must be balanced. I indicated in my opening remarks that even if this had been corrected, the result would not have been changed. We are talking about a sort of counsel of perfection. When we do these analyses, we must do them according to the book and be consistent at all times in the figures being used. We must ensure that when we examine five options, we factor in all the same elements for each of the options when doing the calculations.

I should provide some history. When this matter was being sanctioned by the Department of Finance at the time, in July 2008, it required that the HSE do an appraisal, which it did in the space of a month. By September 2008 the board concluded that the best option was leasing. Our focus was on the issue that if there is a programme costing €3 billion using a construction method, all the elements should be considered, as they would be in a public-private partnership scenario. An element to be considered at the outset would be affordability, which means an all-in cost of the programme should be established from day one. In considering the options, consistent consideration must be given to the elements and, for example, disposal costs must be used in all the relevant options. They cannot be ignored in one case and put into another, etc.

Having examined the figures in detail, the result would be the same. I do not want to be the Duke of York, marching troops up the hill and down again. The reports message is that in future, when appraisals like this are being done, they should be done before the inception of any programme and in a consistent way. I can give further detail of deficiencies but there is not much point as, in substance, the result would not have been changed.

Deputy Simon Harris

I have two final issues. The first has been made by my colleague, Deputy Ferris. Is there any flexibility that could be shown by the HSE? If we cannot have a primary care centre in one town, can we enhance the provision of the existing community services working closely with the HSE? Let us try to do that.

Are primary care centres being delayed, or in the balance, on the basis of decisions from NAMA? It is a loaded question in that in my home town of Greystones, an agreement to lease has been signed, which the HSE expects to be delivered on in the third quarter of 2013, and which was approved by the board in September 2008. I happen to know, from the point of view of the people planning to build it, that is conditional on NAMA giving the go-ahead for a tranche of funding. Is that a unique situation or are there a number of these situations throughout the country where we are waiting for NAMA to make decisions?

Mr. Brian Gilroy

There are a number of situations where that is the case. In some of those schemes, although NAMA is the official excuse, there are also many other facets delaying them. The Deputy may have touched on it earlier when he talked about the contractual obligation and the assessment of GPs involvement. A huge part of this scheme - it is the main issue around the funding - is the tying in of GPs to participate in the teams. That is a big issue for the banks and the funders. It is the main difference between the schemes. It places a huge onus. That remains a big problem.

If one is a developer - in many cases, the developers may be GPs - with an agreement for lease with a long-stop date on it which is approaching and whereby we will walk if it is not completed, it is convenient to have NAMA as one's first excuse. That is not to say there are not schemes where the process through NAMA is not the main issue but it is also a convenient excuse.

Deputy Simon Harris

I have experienced that sort of thing with NAMA. It would be useful if Mr. Gilroy could send us a note on the number of such schemes where NAMA is involved.

Deputy Sean Fleming

I welcome the guests. I have a question on primary care team development. Some meetings were not happening satisfactorily. Let us forget about the primary care centres, because they are few and far between, but some primary care teams are at a greater stage of development. The public health nurse has a key role in this. In many instances, a primary care team is made up of a couple of GP practices in a region - it could be in a town and a couple of outlying areas. I can understand that five or six GPs will not take a half day off to go to meetings when they could be meeting patients. Sometimes the public health nurse can liaise, meet the doctor and say three or four cases need extra treatment or work. The next day when the public health nurse is on rounds in the region, he or she will call into another GP's practice. I get the feeling more communication and liaison is happening in some of these cases than a document can demonstration. Am I over-reading or under-reading that?

Ms Laverne McGuinness

The Deputy is correct in so far as we have tried to facilitate the GPs. The public health nurse and the therapist will normally go to the place the GPs is, if there is not a primary care centre. The meetings are normally held at lunchtime, so they facilitate the GPs. I will give the Deputy a snapshot of the number of clinical team meetings in December. We had 425 but we took a sample. Of 395 teams, 307 of them held clinical team meetings in December. Some 78% of teams held meetings. Some 61% of the GPs attended and the rest were attended by other health professionals. Not all GPs would be required to attend. There is that level of informality.

In terms of what we report in regard to performance indicators, we put down where the actual clinical team meetings are working. It is increasing. The percentage of primary care teams which held one clinical team meeting in that month was 85% of teams, which was quite high. Some 1,729 patients were discussed at clinical team meetings in December, which was quite high. The document does not go into that level of detail. There is a level of informality. We could do better if we had better ICT infrastructure. We are working towards networking all the systems together with the GPs and the other health professionals.

Deputy Sean Fleming

I wish to pick up on two comments made earlier before I move on to my main questions. When talking about the Athenry region, Mr. Gilroy said the proceeds of the sale of assets and disposals go back into the health service. Is that the case? If he did not say that, perhaps I did not pick it up correctly. I got the impression, when he was talking about disposals, that the proceeds went back into the health service. I remember a controversy some time ago about the disposal of property in the mental health area being ring-fenced and special agreement being sought from the Department of Finance. I do not think it happened.

Does the HSE or the Department of Health have an arrangement whereby the proceeds of the disposal of capital assets are retained in the Department? Generally, the proceeds of such disposals would be surrendered to the State and reallocated. Will Mr. Gilroy talk me through that?

Mr. Brian Gilroy

The Deputy is correct. Historically, that is the way it was, in particular in the case of mental health. Given that the Deputy has raised it, it is important to put on record the issue of the sale of mental health lands and investment in mental health. In regard to A Vision for Change, we have spent well over €150 million and approximately €400 million will be spent in total. The sale of mental health lands reaches less than €40 million. In regard to any perception that investment from the sale of the lands did not happen, it is way in excess of it. However, for the past two years - the 2011 and 2012 Votes - there is a specific subhead for the disposal of assets. Any sales of assets come back to the health capital Vote and have done for the past two years.

Deputy Sean Fleming

Not in the current-----

Mr. Brian Gilroy

For capital purposes.

Deputy Sean Fleming

Is that applicable to all Departments or just to the Department of Health? The Department of Finance liked to receive the proceeds of the sale of State assets and then give them out. I am pleased this is happening but is it the norm?

Mr. Tom Heffernan

I can respond to the question. Basically, capital receipts are accounted for either as Exchequer extra receipts and go back into the Exchequer fund, central funding, or they may be treated as appropriations-in-aid with the specific arrangement put in place in the Vote. In the case of the HSE Vote, that arrangement was put in place in 2009, 2010 and 2011. The programme of sales provided for reflected the HSE's estimate of sales that would take place in those years. The reality was that the level of sales was not as high as anticipated. As far as other Votes are concerned, I am not certain whether the appropriations-in-aid arrangement is in place for other specific Votes but we can check that for the Deputy.

Deputy Sean Fleming

Mr. Heffernan mentioned 2009, 2010 and 2011. How about 2012?

Mr. Tom Heffernan

There is a subhead but there is not a provision for it. Our understanding is that the level of sales last year was less than €5 million. We are awaiting an estimate of the likely sales to see if that position needs to be reviewed.

Deputy Sean Fleming

Are we saying the arrangement in place for 2009, 2010 and 2011, where the Department of Finance, in the Estimates published in early December, made a specific provision whereby the proceeds of the sales of assets by the HSE could be used for capital investment purposes in the health service, is not there or there is no figure?

Mr. Tom Heffernan

There is no figure in for 2012.

Deputy Sean Fleming

I know it did not produce a lot in previous years because of the property market generally. Perhaps this is a policy question, and if Mr. Heffernan cannot answer he should say so, but why was the decision taken to withdraw what I consider a good concession to the health service? That was withdrawn this year.

Mr. Tom Heffernan

The provision is obviously a policy issue but the reality was the level of sales fell far short of the expectations. It is a question of whether sales are capable of being generated. That is the first issue.

Deputy Sean Fleming

Does that apply only to fixed assets, such as property? Does it apply when other items are sold? Would it apply to the sale of vehicles? While we are on the topic, what happens to the proceeds? Are they absorbed into the current budget?

Mr. Liam Woods

To finish the point, the revised estimate volume would allow for the HSE if it identified a target for capital disposal in mental health, potentially to seek to reference that in its capital subheads. More generally, the net grant from the Oireachtas is net of income and the income targets are set as appropriations-in-aid in the Vote. They are accounted for in the global expenditure of the HSE.

Deputy Sean Fleming

I want to raise Mr. Magee's earlier comment when discussing the possible gaps in primary care that could arise from the exodus of staff at the end of February. I formed a clear impression from Mr. Magee that a plan is in place and outline approval obtained to recruit additional staff in March. Will he elaborate on that?

Mr. Cathal Magee

We have provision of €20 million and a potential €25 million, depending on further saving in PCRS and demand led schemes to target at recruitment in primary care. There is a joint Department of Health and HSE project team to look at the prioritisation, disciplines and targeting of that recruitment. That was part of the approval process in our service plan. We have a provision of €16 million for recruitment in the service plan, which is quite modest in terms of its impact.

Primary care will be the focus of how we effectively use and deploy that financial resource over the full year to fill the gaps that will emerge at the end of the grace period at the end of February.

Deputy Sean Fleming

Could that figure of €16 million cover the grades that were exempted from the embargo, such as doctors and so on?

Mr. Cathal Magee

The €16 million covers the full health and social care system. That is not dedicated to primary care in particular, but to the overall system.

Deputy Sean Fleming

There is an extra €20 million, and possibly €25 million for primary care?

Mr. Cathal Magee

Yes, €20 million and potentially €25 million.

Deputy Sean Fleming

It is good to hear that.

Mr. Cathal Magee

It is excellent.

Deputy Sean Fleming

In regard to that figure of €20 million to €25 million in the budget, does it involve Mr. Magee returning to the Department of Public Expenditure and Reform for approval to fill each vacancy?

Mr. Cathal Magee

No.

Deputy Sean Fleming

If it is accepted for example that the HSE requires 150 nurses, what arrangements are in place to fill the vacancies, if the expenditure falls within the budget of €20 million?

Mr. Cathal Magee

As far as the Department of Public Expenditure and Reform is concerned, the control framework is the framework for expenditure. As my colleague said, we have capacity to recruit within the control framework. At the end of 2011 we were well below the employment ceiling set for the health service by the Department of Public Expenditure and Reform, but we did not have the funding to employ them. There is a gap between our capacity to recruit in terms of numbers and the funding available. Increments are not financed and over a period there is disconnection between the cost of the numbers employed and the budget available. Funding is the limitation. The money earmarked for primary care recruitment, that is €20 million or potentially €25 million, does not have to be referred on a one for one basis to the Department of Public Expenditure and Reform. The Minister of State, Deputy Shortall has set up a process for the HSE and Departmental officials jointly to develop a plan for the effective use of that cash and resources.

Deputy Sean Fleming

Would the HSE be required to go to the Department of Public Expenditure and Reform if it went above that figure?

Mr. Cathal Magee

We do not have approval beyond that cash amount. We have capacity within our headcount. The limitation is money rather than headcount.

Deputy Sean Fleming

Based on his current knowledge, will Mr. Magee give an estimate of the cost of the lump sums and pension payments for the remainder of the year for those who will retire after years of service, as this money will come out of the HSE budget? I understand that the operational budget will take a bigger hit in terms of the cost of retirement this year than in a normal year. The €25 million is only a percentage of the cost of the payments to those retiring. This will have a knock on effect across the system.

Mr. Cathal Magee

Deputy Fleming has made a significant point. If one looks at the construction of our service plan and the impact in terms of employment and pay, we need to make a net saving of €57 million in pay expenditure. To effect a net saving of €57 million, the gross saving is of the order of €183 million. It takes €183 million in gross savings to deliver a net cash saving of €57 million. Now for the maths - the HSE must pay a person a lump sum in addition to a pension of 50% of salary based on full service and at the same time, it loses the pension contribution, and the pensions levy of the person retiring, which is recorded as income to the HSE. The lump sums are funded separately in a separate Vote head. We had an allocation to cover lump sums which is of the order of €92 million, but the net saving from a person in the public service retiring is in the order of one third. We might have arguments with our colleagues in the Department of Finance about the exact numbers. We have an increasing pensions bill, but taking into account the pension payment, the loss of income from the levy, the loss of the superannuation income, the loss of a staff member and the fact that the HSE funds pensions out of our current account, the value analysis for savings is of the order of one-third of the full cost. One loses the staff member but the financial saving is not 100% of the total cost of the individual but only 33%. That is a key issue. If one has a replacement cost, that adds to the diseconomies.

In the context of those leaving at the end of February, people are entitled to retire with a pension, based on salaries before they were reduced. The interest in the scheme is substantially but not entirely, from people who are in the retirement category, over 60 years and having reached their maximum. Because pensions are funded from our current account, we have a pension bill that is going up, our pay bill is going down and there is a saving on each individual who leaves of 33%. The maths are subject to validation, but that is the order of magnitude. While the net savings is of the order of €57 million, to deliver it costs €183 million gross. That is underpinning of the order of 3,000 people leaving. If more than 3,000 people leave, the funding for pension lump sums will be under pressure and that could impact further on services.

Deputy Sean Fleming

I genuinely want to put on the record my thanks to Mr. Magee for his contribution. I do not think the public appreciates it. The HSE is the largest employer in the State. It employs approximately 100,000 people, or one third of all public servants in the State. Mr. Magee has given more information about how this system is working to the public and the Members of the Oireachtas today than any member of the Government has given in the Dáil or at an Oireachtas committee. Ministers tend to stonewall when they are asked about these matters. They refuse to contemplate a discussion. As recently as this week, we tried to extract information from the Minister, Deputy Howlin about the net costs arising from this issue. He kept telling us that gross savings of €300 million would be achieved under the Croke Park agreement, but we do not know what the net cost of that will be. Mr. Magee is the first person to set out what the net cost will be. The HSE figures are probably indicative of the figures across the public service because it employs almost one third of all public servants. We have asked for figures on the net cost on several occasions at various forums, including the Committee of Public Accounts. The committee has proven its worth this morning.

The Minister has quoted a figure of €3.5 billion as the saving in the public sector pay bill over the coming years. We now know that the net saving to the taxpayer will be approximately one third of that. The reasons for that have been set out by Mr. Magee. There is a lump sum to be paid. There is a loss of pension levy and superannuation to the State. As we all know, pensions then have to be paid. The Minister refuses to understand or acknowledge the situation. An interesting ballpark figure has been put on the public record for the first time. I thank Mr. Magee for it. He has done the public service a service. I do not want to overdo the praise. According to the round figure he has given, approximately €180 billion will have to be spent to save approximately €60 billion. That would be my instinct, but nobody has ever put it on the public record. We have achieved something at this meeting by getting information on the savings in the public service. I appreciate that. I thank Mr. Magee for that information, which will be helpful when these matters are debated in the public arena over the next month or so. Now that we have a ballpark figure, we can talk about the net saving to the taxpayer as a result of people retiring for obvious reasons.

On medical cards, Ms McGuinness might have mentioned the increase in the number of medical cards. Do the officials have any idea how many medical practices have had a major increase in the number of medical card holders on their lists? I do not need to know the names. I am sure someone will submit a freedom of information request in this regard tomorrow. If we assume a practice has 4,000 medical card holders - I do not know how many patients an average practice will have - I do not think there will be a massive increase in the cost of its operations if it takes on an additional 500 medical card holders. The practice might be slightly busier and it might have to do a little more work if all of these people come. It is a pity we do not have a scale which ensures that as a doctor's number of medical card holders increases, a reduced payment is made in respect of each of them. If a doctor who has 4,000 patients with medical cards takes on an extra 1,000 such patients - if there is an increase of 10%, 20% or 30% - he might not even have to take anyone on to cover such an increase. Would the officials like to make an observation on that? Is the HSE tied into the previous contractual agreements? I suggest that there should be a scaled reduction in payments, if possible, when these numbers increase. I do not think a commensurate increase in costs, relative to the actual payment made by the HSE, is borne by doctors who take on additional medical card holders.

Ms Laverne McGuinness

The Deputy will be aware that general practitioners are paid on the basis of capitation. There is no scale. It is not part of their contract.

Deputy Sean Fleming

I know that. I ask the officials to bear my suggestion in mind the next time this comes up for renewal.

I will speak briefly about nursing homes. There are many good documents on this issue in front of us. The HSE is saying that globally, the cost in the private sector is approximately €900 a week and the cost in the public sector is approximately €1,200 a week. Can the officials tell us what the maximum amounts are in the community nursing homes, and so on, in the public sector? How many facilities comprise the HSE public nursing homes in which approximately 6,000 people are cared for? The officials might not have that figure to hand. They can send it on. What would be the three, four or five most expensive facilities in the public sector? What would be the three or four least expensive facilities in that sector? Can the officials speak about their plans to reduce the number of beds in that area? When the HSE clearly wants to close some places, what is the legal position regarding residents?

I accept that officials from HIQA have to take action when they walk into a place that is utterly unfit and unsafe. Everybody supports the idea that proper care should be provided to elderly people. However, the HSE is still talking about closing, for cost reasons, places that have been the subjects of good HIQA reports. I am entitled to mention last November's shocking announcement that the community nursing home in Abbeyleix and St. Bridget's Hospital in Shaen, both of which are in the same county, were to be closed over a two-week period. I do not think the HSE has taken a similar approach anywhere else since then. A 90 year old patient had to take the HSE to the High Court to get an injunction to stop the HSE from proceeding with its proposal. The HSE stopped what it was doing because it did not have a legal right to approach it in the manner that was intended. I understand that a six-month consultation period is required. The proposal has been withdrawn. The HSE should not need a 90 year old to tell it how to run its business. Such people should not have to go to court.

I understand that 42% of those who have applied for the fair deal scheme are waiting to be discharged from acute hospital beds. I have taken that figure from a chart in the document. The officials have said there is a waiting list of four weeks if everything is perfectly processed, but I have yet to meet anyone who has been approved in four weeks. I appreciate that the forms have to go to and fro while matters like assets, and so on, are examined. It is hard to get information from people who are sick in hospital. The HSE is paying for people to lie in acute hospital beds, which is part of the reason it takes so long to process these applications. I do not understand this lack of joined-up thinking. The HSE probably does not have the budget for a place in a community nursing home. The whole country knows that is where these people should be, rather than being kept in a hospital bed, perhaps at a cost of more than €2,000 a week. I have not yet been given a rational explanation for that. Common sense would dictate that they should be moved to a nursing home. That is where they want to be, their families want them to be and the HSE wants them to be. It seems to be impossible to match the two budget heads in a way that allows them to be in the more appropriate and less costly location. Perhaps the officials can give me their observations on nursing homes.

Mr. Cathal Magee

I thank the Deputy. I ask my colleague, Mr. Liam Woods, to talk about the financial and cost aspects of the matter.

Mr. Liam Woods

There are 121 homes. We have a listing. We have published the cost of care by home for 2010 on our website. I can provide that information to the committee. We have done some work on the cost of care for 2011. We are revising that work using data for the entire year. The range is set out in the appendix in terms of clusters of numbers. The Deputy asked about the dearest units. The published material makes the point that the "on" cost associated with some beds in Our Lady's Hospice is quite high. According to the cost of care figures that have been published for 2010, the relevant figure is €2,510 per bed per week. The beds in question are very particular. We have commented in our paper that we need to examine the type of care being provided in some of the public beds on the service side to ascertain whether they are fair deal beds or palliative care beds. That is a dear one. The relevant monthly figure is more than €2,000 in a small number of other homes. Deputy Fleming gave the average figure. There are some low figures as well. Some of them are just over €900 and one or two are just below that. There is one that is €600. A couple are €800. We can provide the full list to the Deputy.

Deputy Sean Fleming

In general-----

Mr. Cathal Magee

Ms McGuinness will speak about discharging.

Ms Laverne McGuinness

It is not really a processing issue. It is not merely a case of getting financial forms filled in. At the end of December, some 583 people had all the forms completed and were ready to move. As they were on the placement list, no places in the particular nursing homes where they wanted to go were available for them. That might be why they were still in hospital. They might have chosen particular nursing homes, but the homes were not ready for them. They might not have been next on the national placement list, which works in order of priority. These difficulties are not necessarily caused by the forms being filled incorrectly. The scheme is budget-capped. A number of beds are released every month. That is how the churn moves in this regard. The problem is not necessarily caused by processing. There are legal issues in some cases, but they are quite exceptional. There could be a lien on the property, and so on. The delays relate primarily to placement - where the client wants to go.

Deputy Sean Fleming

On the legal position in respect of the announcement last November that two community nursing hospitals would close, a number of 90 year old women had to take the HSE to court to tell it this was not the way it should do its business.

Ms Laverne McGuinness

I think that was amelioration in the court, that it did not have to proceed any further. The issue in relation to the court was that, in the best interests, a full consultation process should have been undertaken before the decision to close was made. It was not that there was no thought given and the protocol was not drawn up in relation to the consultation but that the consultation was taking place almost after an economic decision was taken to close. Consultation on where patients will go, etc., now has to precede any decision that is taken to close.

Deputy Sean Fleming

To ask a general question, what decision making process or chain of command is followed when a decision is taken to close community nursing home units? Many people are fearful, not only the residents of such facilities but also those who may require them in five or ten years, which includes all of us here if we live long enough. It appears one region took a unilateral approach which was not reflected elsewhere. Why did it adopt such an approach? Was it a test case to see how the HSE would get on?

Ms Laverne McGuinness

I can say it was not a test case to see how we would get on. What happened in that particular region was that the HSE was consolidating the number of nursing homes by reducing the number from six to four. It had staffing issues and some of its staff were being replaced by agency staff. It was hoping to move some of the staff from the two homes it proposed to close to the other centres. It also had plans in place to keep the patients and residents together in order that social contact would be maintained. As I stated, a full consultation needs to be put in place and must be followed nationally before any future decision is taken to close any nursing home.

Deputy Sean Fleming

I ask the witnesses to explain the nursing home loan ancillary State support scheme. We heard a figure of €17 million in connection with this scheme for 2011. How is the scheme charged? Who vets the charge and who looks after the patient's interests? How much did the HSE collect under the scheme last year and how much is outstanding?

Mr. Liam Woods

I will answer the Deputy's questions in reverse. There was €8 million in the previous year and €17 million in the year the Deputy is looking at. The HSE does not collect that resource directly. It is collected by the Revenue Commissioners.

Deputy Sean Fleming

Is it paid by the Revenue Commissioners to the HSE?

Mr. Liam Woods

No, it is not in our appropriations-in-aid at the moment.

Deputy Sean Fleming

That does not sound fair.

Mr. Liam Woods

I am dealing with the Deputy's questions in reverse order. To start with that issue, the Revenue Commissioners rather than the HSE collect it. That is a matter for the legislation. The expectation would have been that it would be at least two years from the start of the scheme before there would be any significant return on it based on the lifespan of occupants and clients in nursing homes. We are not directly involved in that matter. Having said that, the funds are paid out of the subhead to individuals, with an attachment of 5% per annum, which may go up to 15%, as part of the original financial assessment. A separate process which runs and is legislated for in the 2009 Act sets out the duties of the HSE and the person applying. As the Comptroller and Auditor General noted, one in six people is applying for that as part of the overall arrangement.

Deputy John Deasy

I welcome the witnesses. In recent weeks, I and about six other Oireachtas Members from counties Waterford, Kilkenny and Wexford gathered at the regional hospital in Waterford where we were met by its clinical director and approximately 12 consultants. This was effectively the entire cadre of clinicians operating and directing in the hospital. What we heard made us uncomfortable. When I asked a question about communications between the HSE and the clinical director and consultants at the hospital, it was made clear that there is little or no communication on the direction of the hospital or its relations and linkage with other hospitals in the south east. It was very worrying to hear this.

Budgets are being finalised and cuts are coming down the line again this year. In the case of Waterford Regional Hospital, this will result in the closure of three operating theatres, surgical wards and beds. How can the HSE cut approximately €6 million from the budget of the regional hospital for the south east without making any contact with the clinicians who work in it?

Mr. Cathal Magee

If one takes the funding situation in the aggregate, our service plan was approved by the Minister in the middle of January. The plan sets out the impact of the budget and financial plan for 2012 on the health system and deals with the reduction in each of the care group areas, whether primary care, mental health or the acute hospital system, and what are, at national level, the aggregate impacts on both services and the finances of these various services. In regard to the acute hospital system the reduction in funding at an aggregate national level is of the order of 4%, based on the allocation of the previous year. However, when one adds in the individual run rates for the acute hospital system towards the end of 2011, one has a deficit of about €130 million. That brings the overall gross reduction for acute hospitals to the order of 7% at national level. This is an average and some acute hospitals may be impacted more severely or less severely than that.

Deputy John Deasy

I am not talking about numbers. The consultants we met at Waterford Regional Hospital were well aware of where the country and health system are financially.

Mr. Cathal Magee

Yes.

Deputy John Deasy

The problem is that they are operating their own consultancies within the hospital and dealing with patients regionally but have absolutely no contact with the health administrators.

Mr. Cathal Magee

Well-----

Deputy John Deasy

I ask Mr. Magee to bear with me. I do not believe the consultants were lying to me. We were all stunned by the answer to my question on communications and the absence of interaction and communication between the HSE and those who deal with patients and run the hospital and health service regionally. How does one cut €6 million from the budget of a hospital if one does not have a clue what is going on in it? While this is a stark statement to make, it is elementary. If one does not interact on a regular basis with the people who are running services in our hospitals, how in God's name does one know what to cut and what not to cut? While I know there are matrixes involved in the service plans, etc., in a situation such as the one I have described, surely the first people who need to be contacted are those who are running clinical services on the ground. That is not taking place. I came to the conclusion after our meeting that the HSE has begun to act more like an accountant that a health administration body, which is worrying.

Mr. Cathal Magee

I outlined the position with regard to the national service plan. This has to be supported by the development of regional service plans. Waterford Regional Hospital is within HSE south and operates within the regional plans which we will probably have published by early February. The regional management team, led by the regional director, is working on the development of this plan. Developing the plan would involve the engagement of the management team in Waterford hospital. Discussions would have been taking place with the management team from early October based on various scenarios of what would be the impact of the financial scenarios that were emerging for 2012.

Deputy John Deasy

I am telling Mr. Magee that is not taking place.

Mr. Cathal Magee

One of the positive developments in the health care system in the past 12 months or two years is that clinicians are taking a more significant leadership role and are involved significantly in a whole range of clinical programmes. They were also involved nationally both in the special delivery unit for dealing with the impact on emergency and waiting lists but also in regard to planning, managing and re-engineering clinical care services. The model currently in operation is one that needs to be a combination of the clinical leaders, the executive leaders and the nursing leaders to deal with the funding, the models of care and the change programmes that need to be extant in these hospitals.

Deputy John Deasy

That sounds great for a perfect world, but that is not happening. We had a meeting and those people were not lying to us. They have iterated this again and again. A few months ago when we were in this room, I asked about reconfiguration and got an answer with which I was not particularly happy. I went back to the people in the south east and asked them about that. We are in a situation now where there is, effectively, a turf war between some of the different hospitals in the south east and that is driven by politics. The reconfiguration process did not work and has been a disaster. It has amounted to nothing.

We have a situation in Waterford hospital, regardless of the perfect world scenario Mr. Magee has painted, where there is almost no communication between what Mr. Magee would regard as the executive leaders and the clinical leaders. The question is simple. How does one cut €6 million from a budget if one does not know what is going on in the hospital and within the different services being provided by the different consultants? This is very worrying and that is the conclusion we came to after listening to these people for about two hours. I expect people to be frustrated in every professional walk of life, but Mr. Magee and the HSE have an administrative problem if they do not interact sufficiently with the people who direct the services in places like regional hospitals.

Mr. Cathal Magee

The level of interaction that takes place in putting together the service plan for 2012 for a major regional hospital and for the financial impacts that are emerging from the budget allocated is quite intensive. I do not accept that there has not been significant engagement of the management team in the regional hospital with the regional management team around looking at not just the outcome that has been approved at the middle of January, but the various areas this will impact.

Deputy John Deasy

What kind of clinical expertise is being used to make the decisions on the budget in Waterford hospital? They are telling me there is none in the management structure.

Mr. Cathal Magee

The clinical director structure in place at a regional and hospital level is involved in the co-leadership and management of that hospital. That happens right across all the hospitals. There are clinical directors in quality and safety and clinical strategy on the national management team of the HSE. One of the key provisions we have set down in the service plan for 2012 is to seek to moderate the impact of that financial reduction, of the order of on average 7%, through innovation and new models of care and re-engineering of clinical pathways to reduce the impact by the order of 3% or 4%. Therefore, there is a quantification outside of the service plan at national level of what is expected to be the change impact on the levels of activity in these hospitals as a result of the funding constraints. I am not saying this is ideal, but there are fundamental changes taking place in the resources available to the Waterford Regional Hospital, in terms of staff and in terms of cash. That has an impact. Therefore, it requires the local management teams to engage with the collective to see how the impact of those changes can be moderated.

Deputy John Deasy

It is not working. There is disconnection there. At the meeting, I made it clear to the consultants that they have a responsibility to connect and co-ordinate with the consultants in the different hospitals in the south east. They admitted that and agreed that they had that responsibility and that in some cases they had fallen down in that regard. However, when it comes to a budget, there is a lack of communication and interaction with the HSE management team - the senior management team. I am relating what we, as Oireachtas Members, heard on that day. Communication is almost non-existent.

I understand Mr. Magee does not deal with the minutiae of hospitals on a daily basis, but before the HSE formulates this budget, it should, at the very least, meet the Oireachtas Members who were there that day and give them an opportunity to put their views. Representatives there from Kilkenny, Wexford and Waterford said the same thing, that before this budget is formulated, they should be allowed to contribute. I am aware that in different parts of the country an independent set of eyes is put on a region to see where the disciplines are strong and where they are weak. We need that in the south east now for the benefit of the four or five counties that depend on this hospital for acute services. The HSE has a major problem.

The HSE model sounds great for a perfect world and it is moving in the right direction. However, it has been a disaster in the south east. That is what has been relayed to me and other Oireachtas Members. Communication is almost non-existent between the consultants and the HSE management. This is what has been related to us. That is a problem. Again I ask, how is the HSE to make the cuts? We all know cuts are being made and I was on radio this morning defending cuts in a different area. I do not have a difficulty with that, but in this case, I do not think the HSE has got the knowledge and facts on this hospital to make the proper cuts.

Mr. Cathal Magee

We do not make decisions about individual hospitals at national level. Those decisions are made with the regional management team across the network in the south east and the south. There is a regional structure in place and Mr. Pat Healy is the regional director.

Deputy John Deasy

I am aware of that.

Mr. Cathal Magee

He would work with the management team in Waterford and with his teams and look at the potential impacts of the financial scenarios emerging. That discussion would have been ongoing for several months. Therefore, I am surprised by what the Deputy says.

Deputy John Deasy

My guess is that if and when the clinical director and the consultants in Waterford Regional Hospital hear of this discussion, they will back me, because this has come from their mouths, and come out and say I am right and this has been their experience. If I were Mr. Magee and did not know the situation and the level of interaction, I would be careful about making a statement like that, because it is clear from the people in Waterford that is not the situation. The HSE has a serious problem. When it cuts a budget in a hospital like this without the appropriate level of interaction, there is a serious problem.

Mr. Cathal Magee

We do not cut a budget. We seek to allocate the funding that is available and approved by Government within uncertain subheads to the various regions. The service plan being implemented has been approved by the Minister and it sets out for each of the care areas the impact of a reduction of €750 million in funding for the health system.

Based on the issues the Deputy raised, I will talk to the regional director to try to establish what process has been under way on the financial planning for 2012. I am concerned when the Deputy says there has not been engagement. I expected there would have been a great deal of engagement on working through the financial plans for major hospitals like Waterford hospital for 2012.

Deputy John Deasy

I appreciate Mr. Magee's response, but we need a little more than that at this point. I do not know how many times I have raised this issue. In fairness, reconfiguration has been a failure. It has not gone anywhere. Mr. Magee is nodding his head. Fair enough, that is accepted. However, we have a breakdown here with regard to the co-ordination between the different hospitals and the services that are being provided through those hospitals. We have a serious problem in the south east and there is not the level of necessary interaction between the people who are providing these services and the HSE. Before the HSE finalises its budget, it needs to look at this and give people an opportunity to give their two cent worth as to where they think these programmes should go. The administration is not working for the hospital in question.

Ms Laverne McGuinness

There is a hospital manager in Waterford who works directly with the clinical director and director of nursing, so I would be very surprised if no engagement took place. The process happens in reverse. The directors get the budget and then they look to see what actions are necessary to live within that budget. They need to work with the clinical directors to ensure that they do not reduce activity to the same level to which the budget is reduced. It will impact on staff and high levels of staff may exit in February. What we can undertake to do is to speak directly with the regional director of operations and to come back to the Deputy with a written response or to have a meeting.

Deputy John Deasy

All right. You need to meet the clinical director in Waterford and possibly the clinical director in Wexford and Kilkenny as well.

Ms Laverne McGuinness

Yes.

Chairman

As it is a serious matter, perhaps the HSE might arrange a meeting with the public representatives for the area and the group which manages and reports-----

Deputy John Deasy

We need to include the hospitals also.

Chairman

Exactly. The public representatives should be involved. We will have the accounts before us around Easter, when we can return to the matter.

Deputy John Deasy

I would like to raise one minor issue. In my office in the last couple of months I have come across three or four people who have been refused letters from consultants when applying for illness benefit. They have serious illnesses and are applying to participate in a State scheme such as the illness or disability benefit scheme. However, consultants with public contracts have refused to give them letters. It is obviously critical if somebody is attending for a medical assessment. I do not know if the consultants are busy, but they now have a policy of not providing such letters. If somebody is assessing a case, outside of what a GP has written on a form, having the consultant's prognosis of a particular ailment is absolutely necessary. However, I am finding time and again that consultants are refusing to write such letters. If a consultant has a contract with the HSE and an individual applying for a State benefit asks him or her for a letter describing the particular illness, there should be a requirement on the consultant to write it.

Mr. Cathal Magee

We will follow up on that matter directly with the Deputy. I am not aware of the details, but we will follow it through.

Deputy Mary Lou McDonald

I would like to support the last suggestion made by Deputy John Deasy. It strikes me as outrageous that somebody would be refused such a letter.

Mr. Magee has made an interesting point about the envisaged net savings as 3,000 exit employment in the HSE. I would like to explore this a little more with him. He has also given another interesting fact, that the HSE is working below its employment ceiling. Therefore, is it fair to say the HSE is not overstaffed?

Mr. Cathal Magee

We were about 700 to 800 below the employment ceiling at the end of 2011. Based on the numbers who will exit at the end of February, we will be comfortably below the employment ceiling up to the end of 2012. What is different in the service plan for this year is that we have outlined recruitment plans in the mental health service, for which 400 will be recruited, while €20 million to 25 million has been earmarked for primary care services. We also have committed to recruitment to support the implementation of clinical programmes.

Deputy Mary Lou McDonald

I would like to put all the pieces together. The HSE has not hit its employment ceiling. Mr. Magee accepts the Minister's figure that about 3,000 will exit the HSE and that the HSE will be recruiting.

Mr. Cathal Magee

Yes.

Deputy Mary Lou McDonald

When all of these elements are put together, we can see there is a completely incoherent approach to staffing in the HSE. It has not hit its ceiling, thousands will be exiting, yet it will be recruiting. I am not laying this at Mr. Magee's feet. However, he has to manage this scenario, but we are being told by those in government that there is this incentive for people to exit on full pension because we need to reduce numbers within the public service, including the HSE. What is interesting is that the HSE has not even hit its staff ceiling, that Mr. Magee accepts the Minister's figure that around 3,000 are due to leave and that in the next breath he states the HSE will be recruiting and has a budget of €20 million to 25 million, as well as an additional sum of €16 million.

Mr. Cathal Magee

There is €25 million for mental health services which is largely targeted-----

Deputy Mary Lou McDonald

As the person who manages the service and is subjected to public scrutiny for the good governance and management of the HSE, is Mr. Magee struck as I am by the incoherence?

Mr. Cathal Magee

The 400 to be recruited to the mental health service will be targeted to fill gaps in capabilities. Strategically, their recruitment will allow implementation of the strategy in A Vision for Change to be accelerated in moving from a more institutionalised setting to having more community based teams. The targeting of disciplines required supports the development of community based mental health services and allows fjor strategic implementation of A Vision for Change.

Deputy Mary Lou McDonald

I understand and support that, but I would like to ask the following question. If the recruitment of 400 staff is envisaged, how many staff are due to leave the mental health service by the end of February?

Mr. Cathal Magee

Obviously, there are estimates, but we are looking at almost 500 who have made expressions of interest or indicated that they will leave. The majority - 389 - are in nursing posts.

Deputy Mary Lou McDonald

In the mental health service.

Mr. Cathal Magee

Yes.

Deputy Mary Lou McDonald

While 500 will go out, 400 will come in.

Mr. Cathal Magee

Yes.

Deputy Mary Lou McDonald

That will leave the HSE with a deficit of 100, in a scenario in which it has not hit its employment ceiling. What are the implications for front-line services? Surely Mr. Magee has a view on this, although I know he cannot be absolutely precise. He says he has contingency or planning measures in place. However, from what I am picking up, not just from him but also Ministers, I do not have great confidence that these are robust or have been particularly well thought out. To those members of the public who rely on the HSE for a mental health service, what does Mr. Magee have to say about front-line services? Is he prepared to say publicly and stake his reputation, as the Minister has done, on the fact that serious damage will not be done to service delivery because of the numbers exiting from the service?

Mr. Cathal Magee

I refer the Deputy to our service plan which we have published in which we outline the HSE's view of the impact on various services. In the introduction to the plan we state that, even with efficiencies, it will not compensate for the loss of front-line staff in such large numbers. Ministers have also acknowledged that there will be an impact on services.

Deputy Mary Lou McDonald

They have not.

Mr. Cathal Magee

A total of 85% of those who work in the health system work on the front line. Almost 93% are involved in the delivery of services. With 3,000 leaving the service, there will be an impact on services. This is acknowledged in the service plan. We have sought to quantify the impact in each of the service areas in acute hospitals, primary care and mental health services. What is happening in respect of mental health services is a positive story. We have to see what the actual impact will be at the end of February in terms of numbers. However, the recruitment of 400 people in the mental health sector is a big investment at this juncture. It is a major balancing factor for the numbers that are exiting when the grace period runs out at the end of February. Mental health has an additional investment of €35 million in the current year, all of which is targeted at recruitment and replacement of staff. There may still be a net reduction in the overall numbers employed in mental health, but we will see a strategic switch in terms of where those resources are going. The aim is to accelerate and advance migration to the A Vision for Change model of mental health care in the community.

On the issue of primary care, we have indicated that there is €20 million to €25 million available, which will moderate the impact of the exit at the end of February. However, we still have a residual gap in primary care consisting of vacancies that have not been filled. Although the funding of €20 million to €25 million is significant, there has been a significant loss of posts. We have set that out in our answers to the committee.

Deputy Mary Lou McDonald

I hear all of that. Presumably Mr. Magee has had the opportunity of discussing this matter with the Minister. Did he tell him the details of the situation? I know it is written in the report, but prior to its publication, did he make the case for saving the health services in respect of this exit due to the pension carrot? Has he had a straight conversation with the Minister in which he explained what this will do to front line services? To put Mr. Magee straight, Ministers have categorically denied there will be an effect on front line services. It is actually one of their mantras. They tell us the HSE can do more with less. That is a debatable concept. I am sure efficiencies can be achieved, but when an organisation is losing numbers in the thousands, I doubt that more can be done with less. Did Mr. Magee advise the Minister that this was not a great idea?

Mr. Cathal Magee

The development service plan starts from the middle of November to late November. There will have been interactions with the Department and its officials in which the development of the service plan for 2012 was discussed from early December, and we developed various drafts based on different scenarios that are emerging. Until the final decisions were made by the Government on budget day, we were not dealing with the exact numbers, but given the published information, we had indications of the level.

Deputy Mary Lou McDonald

Did you talk directly with the Minister?

Mr. Cathal Magee

There would be ongoing discussions directly with the Minister and with officials about all aspects of the development of the plan. The plan was developed in recognition of the fact that there were impacts on staff resources and on cash. That is recognised in the health system. We considered how we could moderate and reduce the impact of that. We have the Croke Park agreement and we have clinical programmes under way which involve radical and significant change in the models of care. Our service plan tries to accelerate reform and the process of innovation, trying to drive out excess costs in order to minimise the impact on front line services. However, we have said, given the funding scenario in the plan, that there will be an impact on front line services. We have tried to quantify that; in the service plan, for the first time, we have tried to quantify the impact across each of the service areas at least at a national level.

Deputy Mary Lou McDonald

To return to the issue I mentioned, we know the Cabinet has a sub-committee on health, which the Taoiseach announced. To my knowledge, it has met once. Do you know anything about this sub-committee? What is your line into it?

Mr. Cathal Magee

As part of the structure, there is a Cabinet sub-committee on health. Both the chairman and the chief executive officer, together with some of our officials, are in attendance at those Cabinet sub-committee meetings from time to time to discuss agendas and topics. That is part of the Government's process.

Deputy Mary Lou McDonald

Presumably, the sort of things that would be on the agenda of the sub-committee include the service plan and the implications of Croke Park, the pension deal and the resulting exit?

Mr. Cathal Magee

The service plan and the budgetary scenarios emerging would be-----

Deputy Mary Lou McDonald

Can I take it that, via this mechanism, the Taoiseach and the Ministers concerned are at all times fully au fait with your plans and concerns - that there is good communication?

Mr. Cathal Magee

That is a matter for the officials in the Department. The Secretary General would be better able to answer, with regard to both the Department of the Taoiseach and the Department of Health, the extent to which the Taoiseach or other members of the Cabinet are au fait with the shape of the service plan that is emerging.

Deputy Mary Lou McDonald

But you attend this sub-committee?

Mr. Cathal Magee

We would be in attendance at the sub-committee when there are items of which we are due-----

Deputy Mary Lou McDonald

Am I right in saying it has only met once, or was it twice?

Mr. Cathal Magee

I cannot comment on the number of meetings. I have been at a number of meetings of the Cabinet committee in the last number of months, so it has certainly met more than once.

Deputy Mary Lou McDonald

The Cabinet sub-committee on health?

Mr. Cathal Magee

The Cabinet sub-committee on health, yes.

Deputy Mary Lou McDonald

That is interesting; I will certainly go back and check the record, because the Taoiseach has been rather understating the number of meetings that have taken place. I am glad to hear you are at those meetings, because it would strike me as a bit odd not to have you there. It is a great pity that Members of the Oireachtas do not get access to or any kind of feedback from that sub-committee. I am labouring this point because, time out of number, good, bad or indifferent initiatives are taken and, invariably, nobody knows anything about the bad ones; they are lobbed straight back into your court. I am glad we have established that you attend those meetings, as I genuinely did not know that. Thank you for that information.

You have given us the quantum of savings. As Deputy Fleming said, we have pursued this matter quite vigorously with the Minister for Public Expenditure and Reform, Deputy Howlin, in particular. You have certainly been a lot more forthcoming than he has been at any stage.

It strikes me, considering the scenario in the mental health sector, with 500 people leaving and possibly 400 joining, that if this were the case in a number of sectors, no savings might be made at all. If that were the equation in different sectors, we would be looking at a cost to the State due to people leaving the service, what with the lump sums, the loss of superannuation and earlier payment of pensions.

Mr. Cathal Magee

In any situation in which staff are replaced by appointment as the result of an incentivised exit, there are no savings, or the savings will be less because of such factors as the differential between the salary and costs of the person exiting and the person being recruited. One would want to get into an individual analysis for that. Certainly, even if we do not replace the post, the savings are not 100% of the cost of the exiting employee. We must add back the pension and other income that we no longer have. The magnitude of the savings, on average-----

Deputy Mary Lou McDonald

Is a third.

Mr. Cathal Magee

A third. That is on average, because if somebody has only 20 years' service and a lower pension, his or her pension costs could be 25% of his or her total pay. That calculation gives an average.

Mr. Tom Heffernan

I can try to add some clarification to how the employment pay saving policy operates. Obviously, in calculating pay savings, gross and net factors are taken into account. It is the case, as indicated by the CEO, that certain income would be lost due to the numbers going. Generally speaking, if one does not replace an individual, one will make a saving of something like the magnitude suggested. There are often differences between us in how they are calculated. The figures are of the magnitude of those suggested by the CEO.

As far as the employment policy operates, Government decides the employment targets and an employment control framework is put in place. In the case of the health sector, last year the employment control framework had a specific end of year target by which the numbers were to be reduced. The pay bill that was provided matched that reduction target. If the HSE or voluntary bodies within the sector reached the target there was provision for exempted grades and specific provision could be made on an exceptional basis to fill gaps in essential front-line services.

As far as the exempted grades are concerned, they are grades that are specified in the employment control framework. They were typically front-line service grades such as hospital consultants and the various social care professionals that would be required in the community in order to facilitate the development of integrated care and more primary and community care. Those exempted grades, provided that the overall pay savings and numbers were delivered, could replace people who exited those grades. There were targets for additional numbers for those specified grades.

A feature of the employment control framework for a number of years also provides for the possibility of redeployment, for example, from the acute to the primary community sector. It is not the case that there is one sector and numbers can go in and out. Obviously, part of the consideration of the deliverability of that would require co-operation from employees and interested professionals within the system under the flexibility arrangements in the Croke Park agreement.

Deputy Mary Lou McDonald

I appreciate that. It is also clear that redeployment is not as straightforward as it might look on the face of it. Clearly, some individuals cannot be redeployed into very specialised tasks. I thank Mr. Heffernan. I want to mix the issue of redeployment and medical cards. When the primary care reimbursement services centralised in Finglas, staff were redeployed. My understanding is that 90 were moved. Is that correct?

Ms Laverne McGuinness

More than 90 were moved.

Deputy Mary Lou McDonald

Is it now 150?

Ms Laverne McGuinness

We are close to 150.

Deputy Mary Lou McDonald

Some 150 out of 400 personnel were moved. Where did the others go?

Ms Laverne McGuinness

In regard to medical cards and medical card processing, traditionally Dublin differed from the rest of the country. In the country a lot of processing was done by community welfare officers and their staff. Under a commitment made with the Department of Social Protection, community welfare staff transferred to the Department and all staffing engaged in that activity also moved. We transferred a number of admissions staff to support them in that process. The staff that have been redeployed to PCRS were HSE staff but primarily came from the two Dublin regions, Dublin mid-Leinster and Dublin north-east. In Dublin, administrative staff post medical cards. Approximately 450 staff were involved in the processing of medical cards which has now been reduced to 150, which creates a significant saving for the Exchequer.

Deputy Mary Lou McDonald

I broached this subject with the Minister for Health, Deputy Reilly, and he thinks the remaining staff were reassigned to primary care teams.

Ms Laverne McGuinness

To be fair, there was an intention that some staff would be reassigned but under the memorandum of understanding we had with the Department of Social Protection, extra numbers were transferred in order to enable the Department to administer the scheme with community welfare staff. Likewise, the number of community welfare staff shrank. We came to an agreement with the Department of Social Protection to transfer staff. Surplus staff were not available to go into the primary care teams.

Deputy Mary Lou McDonald

I do not like factionalism within the public service. What happened was not, for the purposes of the HSE, redeployment. Those people were lost to the Department of Social Protection.

Ms Laverne McGuinness

To be fair, there was redeployment of staff in Dublin north east and Dublin mid-Leinster.

Deputy Mary Lou McDonald

I accept that. I am talking about the balance which I thought were in primary care teams.

Ms Laverne McGuinness

The majority of the balance, unless some choose to stay within HSE in particular jobs, went to the Department of Social Protection. That was the agreement because part of the job they were doing as community welfare officers was assessment in regard to medical cards.

Deputy Mary Lou McDonald

I am trying to establish that it represented a drop in overall headcount numbers.

Ms Laverne McGuinness

Yes.

Deputy Mary Lou McDonald

I thank Ms McGuinness. On the processing of medical cards, the delegation has heard from other colleagues. It is absolutely disastrous and could not be overstated. I do not know what the work practices are in the office but I have had experience of talking to a very helpful, courteous and perhaps efficient individual who was looking for a piece of information from somebody one floor up. The person had to send an e-mail and I was told it would take three or four working days for the information required to pass down. If that is what is happening, it is absolutely crazy. I have huge sympathy for the staff if the numbers have decreased. Ms McGuinness said 150 people are processing the cards.

Ms Laverne McGuinness

Yes, that is sufficient to carry out the processing.

Deputy Mary Lou McDonald

If one was applying for a card or was a constituent one would take a very different view. I have two busy constituency offices and we deal with every imaginable scenario. The slow pace of medical card processing and layers of bureaucracy are major issues. I know there have to be probity tests but it becomes almost like a game of tennis, in that there are more requests for information and asking if it has been lost. It is absolutely crazy. We cannot all be wrong. If Members of the Oireachtas are telling the Department that, based on their constituency work, this is a big phenomenon it can take it as read that there is some merit in what we are saying. I am surprised that 85% are dealt with within 15 days. I cannot fathom that; it does not square with my experience of the issue. Where did Ms McGuinness get that figure?

Ms Laverne McGuinness

It is from PCRS and we have data records we can give the Deputy. I am not saying there are not difficulties. I have already stated that a lot of tweaking needs to be done to some of the forms to make them a lot more user friendly. We recently received information that we can validate with the Revenue Commissioners and are trying to do the same with the Department of Social Protection in order that clients applying will not have to supply information we can get directly online. We hope that by July of this year 80% of applications can be carried out online. I recognise there are difficulties. We have taken them on board and they are being addressed. Some 85% of all the forms that have been completed correctly have been processed within 15 days and we can substantiate that information.

Deputy Mary Lou McDonald

Does PCRS have that data?

Ms Laverne McGuinness

Absolutely.

Deputy Mary Lou McDonald

Can Ms McGuinness share it with us?

Ms Laverne McGuinness

I can. About 5,000 contacts are made with PCRS every day-----

Deputy Mary Lou McDonald

I know. A lot of them come from our offices.

Ms Laverne McGuinness

-----in terms of e-mails, phone calls, etc. It is moving to set up customer liaison officers to make the system more user-friendly.

Deputy Mary Lou McDonald

Would Ms McGuinness regard the centralisation of that function to Finglas as a success story?

Ms Laverne McGuinness

The centralisation of the function to Finglas started in July, which is quite early for centralisation. The staff came from different places and had to be retrained, because the staff who transferred had not, necessarily, been involved in that activity. There were teething problems associated with that retraining. The 150 staff did not all arrive at the same time. Some 20 arrived only in recent weeks.

Centralisation will be a success. There certainly has been a saving. With regard to probity, we have been able to eradicate duplication and standardise the process. However, there needs to be a customer orientation and it needs to be a user-friendly service.

Deputy Mary Lou McDonald

I do not down play the necessity of probity and efficiency. If it only takes 150 staff to provide the service, so be it. However, the office must be properly resourced. We are not dealing with customers here. We are dealing with people who are very sick and need their medical cards. We have all had experience of dealing with such people. It would be interesting to see the data, but I reckon that if one told people in any part of Dublin or beyond that 85% of applications are dealt with within 15 days one would be laughed at. No one would believe that.

I am saying this to spur Ms McGuinness and her colleagues to sort this out. If 150 people are not enough, we cannot be so regimental as to say additional resources cannot be provided. I hope work practices are not so bonkers that someone cannot lift a phone but has to e-mail a colleague on an upper floor and wait three or four working days for a response? That is ga-ga. Wherever that is emanating from, it needs to be nipped in the bud. I am merely reporting a conversation I had. I hope work practices are not so deplorable, but my experience suggests they might be.

What will leasing premises for the primary care centres cost in 2012?

Mr. Brian Gilroy

I can forward an exact figure to the Deputy. It will be less than €10 million. In fact, it will be closer to €6 million. I will send the Deputy the most up to date figure.

Deputy Mary Lou McDonald

It will be somewhere between €6 million and €10 million. That is for how many centres?

Mr. Brian Gilroy

I will come back to the Deputy on that. We have a detailed list of all the operational centres. I can give the Deputy the most recent figure available. There were 21 locations under lease at the end of 2011. A number of locations will come on stream throughout 2012. I will write to the Deputy within the next day with the exact figure.

Deputy Mary Lou McDonald

Between €6 million and €10 million is the global figure.

There was controversy regarding the Carlow primary care centre. The figure, which is quite astonishing, is €365,000 per annum, which is €1,000 per day, even though it was argued that a suitable HSE facility was available. Is that money still being paid for that location? It is the third floor of the Shamrock Plaza. Can Mr. Gilroy reassure the committee that this leasing arrangement is an exception and not the rule?

Mr. Brian Gilroy

To what extent does the Deputy mean the exception?

Deputy Mary Lou McDonald

That seems like an extremely expensive lease.

Mr. Brian Gilroy

Going back to the earlier discussion with the Comptroller and Auditor General and to his report, all the rents and leases we took on were 18% below the market value. We got market value and we discounted by 18% before we entered into leasing agreements. When the Carlow lease was undertaken, as with all the leases, there was a discount off market value.

Deputy Mary Lou McDonald

Fine. It still strikes me as a great deal of money, given that alternative premises were available in the area, in St. Dympna's, I think.

Mr. Brian Gilroy

To get general practitioners to relocate to St. Dympna's would not necessarily have been easy. There was no obligation on them to do so. In our earlier discussion it was made clear that there is no contractual obligation on a GP to participate in a primary care team. However, these leases create that obligation because if a GP ceases to participate in the team the HSE can break the lease and walk from it.

Deputy Mary Lou McDonald

Did the HSE increase its ceiling rates by 16%?

Mr. Brian Gilroy

No. We provided a response on that last week. From 2008, in the first schemes, we calculated market values and discounted them down by 18% to create the ceiling. In mid-2010 market rates had collapsed considerably. In July 2010 we had a number of centres - between 20 and 30 - none of which were bankable. There was no appetite at all for them at the market rate, so instead of achieving an 18% discount we applied a 5% discount, because of the nature of the market. We were still getting a 5% discount off the 2010 market rate.

Chairman

In view of the answers given to Deputy Fleming, is there a profile of where those leaving the HSE are coming from? There is. What about management? For some time, we have been told HSE management is top heavy in different areas. Will that correct itself because of those leaving the HSE?

Mr. Cathal Magee

We ran an incentivised exit scheme towards the end of 2010 and in early 2011 for management and administration. We had a 15% reduction in our management numbers and an overall 11% reduction in administration numbers. Almost 1,800 management and administrative people left towards the end of 2010 and in early 2011. In many ways that took up a significant number of people moving towards retirement. In the current scheme, approximately 300 people in the management and administrative area may exit by the end of February.

Chairman

With those leaving administration and management, are you satisfied that overstaffing at that level will have ended and that you will now have the complement of staff required, or will more need to go?

Mr. Cathal Magee

That will depend on the future organisation model for the health system. New structures may impact on the number of management roles. There may be a change in mix between administrative, front-line and back office people and specialists. There needs to be continuing investment in specialist capability, such as IT and finance, in the HSE. There are areas where there are gaps in capabilities. The order of magnitude is about 15%. We would not want it to increase beyond that. We will continue to drive out administrative efficiencies where that is possible.

Chairman

Could you send the committee a paper on the figures you gave us earlier? It is obvious from those figures and from your comment that we should invite the implementation body to the committee as soon as possible. Those figures which Mr. Magee provided to the meeting this morning would be of assistance-----

Mr. Cathal Magee

I will do that, Chairman.

Chairman

-----to the committee in our analysis of the impact and the costs. I wish to ask about medical cards. The Comptroller and Auditor General informed us some time ago at a previous hearing that GPs were overpaid at one stage. They were being paid too much for medical cards which were out of circulation. In fact, some of the people to whom the cards had been issued were deceased at the time when repayment claims were made. In those cases, GPs were due to repay money to the system. Was this money collected from the GPs? I asked this question before and I want an answer to it.

Ms Laverne McGuinness

Yes, the Chairman asked this question at the previous meeting. We have a system in place now. There are two points. In the case where a patient has died - this situation is part of the reason for the overpayment - we now have a direct link with the registrar's publications and we can immediately take that person's name off the medical card list so the GP will not be paid in that case. If a GP has been paid for a patient who is deceased, we take back the money by direct deduction from a GP's payments.

Chairman

Historically, they owed money. It was established that they owed money to the HSE and that they had been overpaid and attempts were made to recover that money. My question is whether the HSE recovered the full amount of money that was due to the State from the GPs at that time.

Mr. Cathal Magee

If I could suggest that we will respond to the committee in writing on that matter. At the time, Paddy Burke gave the committee an update on the position but I do not have a current position. However, I will follow up and give the committee an updated position.

Chairman

Yes, that would be required. I echo what other members have said with regard to the medical cards. I must state that in my office it is the practice to take a copy of all documents. We are aware of applicants who have been forced to submit their application three times, not because they have been asked to provide further information but because the application has been lost. I know that one applicant had to submit the application three times. I dealt with a case yesterday where an applicant had received a medical card and then received a GP card. The amount of queries we receive in our offices relative to the process itself, is shocking. Mr. Magee has stated that a staff of 150 people are dealing with medical cards but I would like to hear the analysis of the facts and figures which Mr. Magee has said he will provide to the committee. It might be no harm, as a result of the exchange this morning, if some senior person were to examine the process and how it is been administered because as public representatives we see that the reality is quite the opposite.

I want to place on record my thanks to individual officials - some of whom are here at this meeting - who helped to resolve issues regarding medical cards and helped to ensure a greater understanding of the system itself so that we could operate the system. However, it is far from satisfactory. I am aware that terminally ill people have not been given medical cards in time for care and this is not good enough. Arising from what other members have said, I ask Mr. Magee to send someone in there to examine the system in detail and perhaps at the next meeting we can be provided with an accurate report and not just the figures and analysis which have been described. I would hope instead for an answer to some of the queries that have arisen this morning.

Mr. Cathal Magee

I acknowledge the feedback from the committee and the Chairman's request. We will respond and come back to the committee as we are very conscious of this issue.

Chairman

The committee is dealing with the SIPTU fund and the HSE has an ongoing investigation. Before we conclude the meeting I wish to inform Mr. Magee that the committee has written on two occasions to the main personalities within that investigation, encouraging them to work with the investigation. These individuals have been named here previously. The Grant Thornton report was carried out by one or other of the parties concerned and we have asked for that. We have also asked for credit card statements relating to this account and the bank statements for the unofficial accounts. This all feeds into the HSE's investigation. Has the HSE received any information from the union or from the individuals concerned and can the HSE provide the committee with any further information to assist us in our examination of this matter to be held on 1 March? I do not expect Mr. Magee to have this information but can he give us an indication as whether they are assisting with the investigation?

Mr. Cathal Magee

Arising from our previous meeting, one of the individuals who was central to the administration of the skills management has agreed to co-operate. He has committed to furnishing a detailed report to our own internal audit by the end of this month. He has changed his attitude as regards co-operation and this process is underway. I understand there is correspondence between the HSE and SIPTU as a follow-on from the letters from this committee and the Chairman.

Chairman

Mr. Magee might emphasise the importance of that Grant Thornton report. If the report is not to be given to the committee, I suggest an analysis of it should be carried out by the investigation team before our meeting on 1 March. This would help to resolve the issue because it is dragging on.

I refer to similar complaints with regard to the fair deal scheme. The applicants in the fair deal scheme must wait an unreasonable length of time. In one case which I dealt with, the applicant died before the appeal was heard, in spite of the fact that in both the application documents and the appeal documents it was suggested by the HSE medical staff that the applicant would have care in a nursing home. I highlight this case because I believe some work needs to be done with regard to the efficiency of the system and the delivery of the end result to the client making the application as quickly as possible, particularly where it is generally agreed among the medical staff. It saves on permanent beds being held up and it saves heartache and trauma for the family. I ask the HSE to look at the efficiencies of that system.

I refer to the community care aspect of the service and the primary care centres. I know of an excellent primary care centre in my constituency which is performing well in the provision of services to the community. I have a question about how HSE staff engage in the delivery of primary care. The question of the properties which have been vacated was raised by another Deputy. Is the HSE assessing the vacant properties, some of which are attached to hospitals? Are other HSE services being provided in these properties?

Deputy Connaughton referred to the sale or other use of property. I am referring to the situation where this accommodation is within a hospital campus. What happens in this case? How does this service work with the community psychiatric service, for example? It refers to our discussion about staff numbers and the Croke Park agreement. There is concern being expressed by senior staff such as nurses that with the implementation of the Croke Park agreement, the delivery of psychiatric services will be affected very negatively, particularly the community services.

Mr. Brian Gilroy

I will deal with some of the accommodation issues. As regards the psychiatric services, many of those primary care centres have community mental health teams, so the accommodation includes the psychiatric services but this is not the case in every centre. Management on the mental health service side would have identified the centres in which it wished to have accommodation, and that is being included in the roll-out.

In regard to disposals, as I said earlier, they will take place where appropriate. Disposal arises where, for example, we have vacated rooms in an old hospital campus or even a workhouse-type campus. Again, it depends on the accommodation, with some of it being re-used. In some cases, particularly where there are older listed buildings, huge capital would be required to reassign the accommodation for other uses. In such cases it is left unoccupied until the capital is available to undertake that work.

Ms Laverne McGuinness

In regard to the community mental health teams, in many of the new centres they are co-located within the facilities. This is the case, for instance, in Letterkenny, Cavan and Mayo. As part of the strategic direction set out in our service plan, we are closing acute mental health beds and freeing up those staff for redeployment in the community mental health services to be provided in the primary care centres.

Mr. Cathal Magee

Letterkenny is a great example of a modern, co-located facility. It shows the potential that is there to be realised when GPs take ownership of the provision of integrated primary care services.

Chairman

I thank the delegates. Is it agreed to dispose of chapters 43, 44, 46 and 48 of the annual report? Agreed.

The witnesses withdrew.

The committee adjourned at 1.30 p.m. until 10 a.m. on Thursday, 2 February 2012.