Thank you, Chairman. We are here today to discuss the provision of care at the three children's hospitals in Dublin. It is now widely accepted that we do not need three children's hospitals in a city the size of Dublin and that it inhibits the quality of care that can be provided. I have said that consistently for more than 20 years in paediatrics in this city. I am glad this view has been endorsed by leading paediatricians from Canada, North America, the UK and by expert reports. Change on a scale needed to amalgamate the three children's hospitals into one is difficult, particularly given the tremendous care the hospitals provide and the loyalty they have built up over many years. They are now beginning to engage in preparations to move to the new hospital in 2014. I publicly welcome that. It is a huge step forward. The vast majority of clinicians accept this is the right way to go. There is no point now in looking back to try to find out why it was not achieved, but it should have been achieved many years ago if everybody had worked co-operatively on obtaining this outcome.
Our focus here today on activity levels, throughput and associated costs could portray us as being overly focused on data and uncaring of the needs of children. On the contrary we will only be able to maintain and develop the services that children need by focusing on these figures.
During the recent public discussions on the financial challenges facing Our Lady's Children's Hospital, a view seems to have been formed that the HSE runs the children's hospitals. I stress that the three children's hospitals are not operated by the HSE. They have independent boards, independent management and the HSE funds them for providing services to an agreed level signed off on by the hospitals. This authority clearly carries with it responsibilities on the part of the hospitals. When it comes to managing the use of funds provided by the taxpayer, there is a responsibility on the boards and management of hospitals to ensure that they provide the services for which they are funded and use these moneys efficiently. They are publicly accountable in this respect. If a hospital decides to achieve savings by closing patient facilities ahead of reducing non-essential pay-roll costs, more effective procurement or better co-operation in sharing with other hospitals in non front-line roles, that is a decision the independent hospital is taking.
I would like to focus on a number of issues. The first is funding. I know from direct experience the high complexity of care provided to children at the three hospitals and especially at Our Lady's Children's Hospital, Crumlin, where a great deal of very complex care is provided. There is a huge commitment by staff to providing this care. In recognition of this the HSE has in recent years, and since its establishment, been increasing the funding to Our Lady's Children's Hospital extremely rapidly. The annual budget for the three hospitals is now almost €260 million, which is a substantial contribution from taxpayers. The budget to Our Lady's Children's Hospital over the past four years has increased essentially by 37%. The numbers are outlined in an appendix to this document that we circulated in terms of the increase in staff numbers.
Concern has been expressed that the Our Lady's Children's Hospital budget has been cut by €9 million. The hospital budget has not been cut by €9 million. The most recent figures received from the hospital indicate it will have a year end shortfall of €100,000. Talks of cutbacks of €9 million are misplaced because they never existed.
One of the difficulties facing the hospital is that it failed to implement the Government policy which required all health care facilities to reduce their non-front-line spending, such as management and administration costs, by 3%.
Many hospitals across the country including the very large ones have, during the last two years, successfully implemented efficiency measures and used these savings to ensure that essential services were maintained. They are managing to deliver more with less and I wish to publicly commend their management and clinical teams for this achievement. Our Lady's Children's Hospital has not so far made sufficient spending reductions in other than front-line areas and has chosen instead to close front-line facilities.
However, I welcome the recent decision of the hospital not to proceed with further front-line facility closures. Following a high level review of the financial situation at the hospital by Ms Raymonde O'Sullivan, who is a senior director in our finance department and who is here with me today, we are satisfied that the hospital can reduce non-front-line costs by approximately €6 million annually by focusing on just three areas. These areas, which are outlined in our document and can be discussed in detail subsequently, include staff payments, at 74%, which are extremely high compared with other large hospital. It also includes the hospital's considerable overtime and on-call payments amounting to almost €50,000 a day, and yet the hospital only targeted €0.5 million in savings in this category, which amounts to €18 million in the year. We believe all hospitals across the country would be targeting way in excess of this, and at least in the order of €2.5 million from that level of spend.
The hospital has provided a contingency for blood costs which we do not believe is necessary. We would be perfectly happy with the management of this blood supply through St. James's Hospital on a much larger scale whereby, we believe, this cost will not be incurred. There is also significant potential for increased income from adequate billing of private insurers. These savings can be made without any compromise on patient care.
In addition, there are several other areas that we outline such as management/administration functions which are duplicated and sometimes triplicated across the three hospitals, and also some clinical services areas such as out-of-hours services where activity in accident and emergency departments, etc., is minimal after 10 p.m. to 12 midnight, with each hospital seeing eight to nine patients after midnight. Activity in theatres after 10 p.m. drops to approximately one episode across the city per night across three units.
Commentary on wards over the past three weeks has created the impression that there has been a closing of 25 beds at Our Lady's Children's Hospital and that this would result in the loss of thousands of bed days. If the hospital was working at 100% capacity, that would be true. The hospital works at 80% capacity — this figure drops to 70% in Tallaght and it is also at 80% in Temple Street. It is perfectly logical when beds are empty that wards should be closed rather than having half-wards and three-quarter wards open across the hospital, which is not a good use of taxpayers' money.
Summer ward closures are carried out right across the system because acute work drops because there is less illness, and because consultants and families are on holidays elective work drops right across the health care system. It would make no sense not to bring about summer closures in that situation. The bottom line is that the beds are there based on the occupancy and the capacity.
We are beginning a comprehensive review of theatres, including utilisation and comparative analysis. A high-level preliminary review would suggest significant scope for improved utilisation of theatre space. We would hope to have the opportunity to reopen the closed theatres within the existing budgetary framework.
There have been suggestions that there have been widespread cancellations at Our Lady's Children's Hospital. This is unfortunate because it must be very trying for parents and guardians of children who must then worry why their child is being put off when it may be for clinical reasons. When compared with the equivalent period in 2008, activity levels at the hospital in the first five months of 2009 are comparable. Up to the end of May, 8,799 inpatient and day case procedures were carried out at the hospital. During this period a total of 76 procedures of the 8,800 odd were cancelled due to the unavailability of a bed. In only two cases was the procedure cancelled due to unavailability of theatre time. These are the figures from the hospital.
There has been a suggestion in recent weeks that 14 children with scoliosis have had their surgery cancelled due to the hospital's cost-saving measures. We have been told by the hospital that no such scheduled surgery has been cancelled due to cost-saving measures. We have been advised that two pre-assessments, which are not surgeries, for patients with scoliosis were postponed but have since been carried out. We have been advised by the hospital that there are now 67 patients with scoliosis who have had their pre-operative work-up assessment and are ready for surgery. We will work with the hospital to finalise a plan that will enable this surgery to be completed. Finally, we have been assured by the hospital that all children who require emergency care have received it as required and will continue to receive it.
Ultimately, it is our job to ensure the highest quality clinical care is provided to children in Ireland and we are committed to that. I, myself, have spent a lifetime working in paediatrics. It is extremely disappointing that we still have not achieved this across all disciplines despite the strong support of Government and the wishes of many parents for a single state-of-the-art national paediatric hospital.
The new hospital will provide an unprecedented standard of care for children and enormous opportunities for clinical staff to develop it as one of the great paediatric centres in the world. I appeal to everyone in a position of influence to assist in seizing this opportunity that is before us and work together in a concerted way towards opening the new hospital ahead of the current deadline of 2014.
In the immediate term we must cut back on all unnecessary expenses and all available resources must be used to maximum effect in terms of increasing the amount of service we provide to children. We are hopeful that the three independent voluntary children's hospitals and the HSE can work together to ensure this is achieved. On behalf of the HSE, I can give an absolute commitment that we will work with all three to ensure that this is achieved.