Health Service Executive (Financial Matters) Bill 2013: Second Stage

Question proposed: "That the Bill be now read a Second Time."

Minister for Health (Deputy James Reilly)

I am very pleased to have this opportunity to introduce the Bill to the House. The Bill provides for the disestablishment of the Vote of the Health Service Executive and the funding of the executive through the Vote of the Office of the Minister for Health. It also provides for a new statutory financial and service plan governance framework which will align with the new Vote arrangements.

The Government is reforming the health services and this Bill is part of that reform programme. The reforms are of unprecedented breadth and depth. They are radical and will ultimately see the introduction of universal health insurance, UHI. In November 2012, I set out the building blocks for these reforms in Future Health. Many of the initiatives, like the eventual replacement of the HSE, will require further and other legislative changes. This Bill is, therefore, a transitional measure, building on earlier changes provided for in the Health Service Executive (Governance) Act, which was passed last year and which provides the basis for the implementation of the rest of the reform programme.

The Health Act 2004 provided that the HSE had its own Vote and that the Minister for Health had no legal role in setting its budget. The House will understand that the intention then was to give the HSE greater operational autonomy from what, at the time, was characterised as a politicised decision-making system. However, in my view, it crucially weakened the accountability of the HSE to the Minister for Health and the Department of Health. This Bill establishes that, in future, funding of the HSE will be through the Vote of the Office of the Minister for Health, thus re-establishing appropriate and proper accountability of the HSE to the Department.

It is also, as I have said, another step on the reform journey, including the dissolution of the HSE, the establishment of a health commissioning agency, new community care structures and the establishment of hospital trusts. This is a step on the way to establishing universal health insurance and Senators will be aware of the progress that we are making in achieving that objective, which is one of the key targets set out in the reform programme since the publication of Future Health. The aim of the reform programme for the health system is to deliver a single-tier health service, supported by universal health insurance, where there is fair access to services based on need, not on ability to pay. Under universal health insurance, everyone will have a choice of health insurer and access to a standard package of health services. In addition, a system of financial protection will ensure affordability by paying or subsidising universal health insurance premiums for those who qualify.

The White Paper on Universal Health Insurance was published in April. It provides substantial detail on the universal health insurance model for Ireland, the process for determining the future health basket, including the standard package of services covered under universal health insurance, funding mechanisms and the key stages of the journey to universal health insurance. Since publication of the White Paper, work has been carried out on a number of the following to advance universal health insurance. A wide-ranging public consultation on the overall policy set out in the White Paper was carried out. Over 130 submissions were received and these will be subject to an independent thematic analysis, the report of which will be completed by the end of September.

Ongoing preparatory work to establish an expert commission which will consult widely and make recommendations in regard to the scope and composition of the future health basket is being carried out. The Oireachtas Joint Committee on Health and Children has been invited to develop a values framework which will help inform the work of the expert commission in making recommendations on the services for inclusion in the future health basket. Officials from my Department have held discussions with the committee and it is hoped that it will be in a position to commence hearings with stakeholders in the coming months.

On the issue of the cost of universal health insurance, I have initiated a major costing exercise to estimate the likely cost of universal health insurance both for the State and individuals and households. This a complex exercise which requires expert analytical support and input from a number of State agencies. I expect to have initial results from this exercise early in 2015. My Department has commenced a baseline examination of the current financial support systems in the health sector. This will be followed by policy proposals on the financial subsidy system for universal health insurance. My aim is to have all necessary preparatory work for universal health insurance in place by early 2016 with a view to full implementation of universal health insurance by 2019.

The Bill provides for the disestablishment of the Vote of the Health Service Executive from 2015, and from that date the funding of the HSE will be mainly through the Vote of the Office of the Minister for Health by way of grants paid to the HSE. The HSE will continue to collect the income it generates through statutory charges, superannuation contributions and other miscellaneous income. The director general of the HSE will become an accountable person rather than an Accounting Officer and the Bill sets out an alternative statutory framework to govern the funding of the HSE and ensure that proper controls on its expenditure are exercised by the director general. The Bill also makes consequential changes to the service plan process to align it with the new budgetary arrangements.

The Bill is divided into three parts. Part 1 has three sections, which are standard technical provisions covering matters such as the Title of the Bill, commencement, definitions and repeals. Part 2 contains the body of the Bill, which is designed to amend the 2004 Act, as amended by the governance legislation, to put in place the new statutory framework. It amends a number of sections and inserts a number of additional sections. Section 4 amends section 5A of the 2004 Act. Section 5A provides that expenses incurred by the HSE are payable out of moneys provided by the Oireachtas subject to the approval of the Minister for Health and the sanction of the Minister for Public Expenditure and Reform. The amendment limits the application of this provision up to 1 January 2015. This is because the provision is being replaced by a new provision, section 33A, which is being inserted by section 11, which I will outline shortly.

Section 5 amends section 16G, which was inserted by the Health Service Executive (Governance) Act 2013. Section 16G sets out the general functions of the director general. The section specifically provides that the director general is responsible to the directorate, as the governing body, for the performance of his or her functions, except where he or she is acting as chairperson of the directorate. The amendment provides an additional exception whereby the director general is required to report to the Minister for Health if he or she is of the view that the actions of the HSE are likely to lead to a breach of its budget limits, which is provided for in section 34A as inserted by section 12 of this Bill.

Section 6 amends section 28 of the 2004 Act, which provides specific definitions for Part 7 of the Act. Part 7 sets out the accountability framework for the HSE. This section adds further definitions which are required arising from the other provisions of the Bill.

Section 7 inserts a new section, section 30A, enabling the Minister to determine a net budget for the HSE, and sets out the process for doing so. The Minister is required to notify the HSE of its budget no later than 21 days after the publication of the Estimates for the public services, more commonly known as the abridged Estimates volume, AEV. In practice, it is likely that the net determinations will be issued on the day the AEV is published or the following day. The section also allows the Minister to adjust a net determination for the HSE in the course of the year. Sections 8 and 9 make consequential amendments to the service plan provisions of the 2004 Act, arising from the new Vote and budget setting arrangements.

Section 10 inserts a replacement section for the existing section 33, which requires the HSE to manage services in a manner that is in accordance with the approved service plan. The section is being expanded to require the HSE to manage the services within the net determination notified to it by the Minister. Subsection (2) reintroduces the concept of the first charge principle. Under this principle, if the HSE exceeds its budget in one year, the deficit is a first charge against the following year's approved budget. If the HSE has a surplus, it would be allowed to carry over the surplus into the following year, subject to the approval of the Minister for Health and with the consent of the Minister for Public Expenditure and Reform. These constraints in the carry-over of a surplus are necessary to ensure compliance with the provisions of the Ministers and Secretaries (Amendment) Act 2013, which puts the principle of ministerial expenditure ceilings on a statutory basis.

Section 11 inserts two new sections. Section 33A is a technical provision allowing the Minister to issue grants to the HSE with the agreement of the Minister for Public Expenditure and Reform. This effectively replaces section 5A, as I already mentioned. This section also inserts section 33B, which provides for a separate process for approving a capital plan and provides for the governance arrangements regarding the approval of such a plan.

Section 12 inserts two new sections regarding the functions of the director general of the HSE. The new section 34A gives the director general the statutory responsibility of ensuring that the HSE operates within its budget in respect of capital and non-capital expenditure. It also obliges the director general to notify the Minister if actions being undertaken by the HSE are likely to lead to its breaching its financial limits. A new section 34B provides that the director general shall be accountable to the Committee of Public Accounts in respect of the HSE's annual financial statements and any other reports made by the Comptroller and Auditor General. This provision is required because section 40G of the governance legislation, which makes the director general the Accounting Officer of the HSE, is being amended so that he or she ceases to be the Accounting Officer with effect from 1 January 2015.

Section 13 amends section 40G and makes the director general the Accounting Officer for the HSE for the years 2005 to 2014. This means the director general is still accountable for the appropriation accounts for those years and the HSE has to produce appropriation accounts for 2014.

Section 14 amends section 40L, as inserted by the 2013 Act, which sets out the functions of the audit committee of the HSE. These functions relate to advising the director general and the directorate of the HSE on financial matters. The existing subsection (3)(b) reflects the current statutory position of the director general as being the Accounting Officer. It is being amended to delete this reference and replace it with an obligation on the audit committee to advise on matters relating to the HSE's and the director general's obligations in respect of the implementation of the service plan in accordance with the new funding arrangements.

Part 3 provides for the transitional arrangements to enable the changeover from the current system to the new funding arrangements. Section 15 provides that the HSE's Vote shall be abolished on 1 January 2015 and that funding will be arranged through the Vote of the Minister for Health in 2015. It also provides funds in the Vote of the Minister for Health for 2015 so as to enable the Department to provide grants to the HSE, pending Dáil approval of the Minister's Vote. The provision will cease to have effect when the Dáil approves the Estimate for the Minister for Health for 2015. Section 16 is a technical amendment to the Valuation Act designed to ensure that the buildings of the Health Service Executive remain exempt from rates.

As I have outlined, the Bill is another step on the reform journey, the ultimate destination being universal health insurance. The central aim of the health reform programme is to improve equity and access to services. This Bill is an essential, if technical, part of that goal. Transparency and accountability around service delivery are fundamental tenets of the health reform programme. This Bill, together with other changes I am making, will help ensure more accountability during the time the HSE continues in existence. I commend the Bill to the House.

Senator Marc MacSharry

I again welcome the Minister to the House and thank him for making himself available. We are opposing the Bill. Ordinarily, on a personal level, I would not be comfortable with €12 billion or €13 billion of the people's money being under third-party control. I regularly spoke in that vein when I was on the other side of the House and former Deputy Mary Harney was Minister. However, I am not confident that the Department of Health under the Minister's stewardship is the right place for the budget. Over recent years the budgeting and financing of the HSE and the health services has been an unmitigated disaster. Never before have we had post-budgetary verification processes whereby the Minister's handiwork is overseen by the Minister for Public Expenditure and Reform and the Taoiseach. It does not give one confidence.

The main reason I oppose the Bill is that when the text of the service plan was presented, it was changed at the last minute after Ministers warned that the original version was political dynamite and would lead to uproar due to the widespread cuts.

Despite my criticism of Tony O'Brien in his role, he seems to have more of a handle on the facts than the Government does. He wrote: "It will not be possible in 2014 to fully meet all of the growing demands placed on the health services." However, when the service plan was published the next day it had been altered and the letter stated: "It will be very challenging in 2014 to fully meet all of the growing demands..." There were other changes also. A blunt statement in the introduction signed by Tony O'Brien declared: "The level of investment required to meet many of the critical service priorities ... cannot be met". It could not have been clearer. That was changed, and the published version stated: "some service priorities ... may not be met". The version presented to the Minister stated that the actual budgetary challenge facing the health service for the year was in excess of €1 billion, but that sentence was omitted from the version presented to the public.

I am concerned about the budget going into the Department if the practice is one that alters the true financial position and paints a complexion other than the truth for public consumption. That would not give one any confidence. For all the difficulty I have with the current position, I believe it is better when one considers how the Cabinet tampered with the facts before they were prepared to present them to the public. Mr. O'Brien's predictions have been correct when one considers the continuing cuts that have been necessary and the shortfall in the budget announced on 25 June of €158 million in terms of the deficit in the Vote to date.

That, in essence, is the reason we will not be supporting the Bill. While it is an unmitigated disaster, taking the budget in at this time under a Cabinet which is prepared to doctor the truth for public consumption in the way it did this year does not give one confidence. We would prefer, however blunt and undesirable, the Tony O'Brien approach of telling people the truth. There is no doubt the past few years have been challenging for the Minister in terms of cuts, but we are better dealing with the truth, the whole truth and nothing but the truth in trying to portray a budget to the people and following a particular plan. Looking back on recent years, it was anticipated that many millions of euro would be saved in various areas, but those savings have not materialised. In terms of the expenditure report for 2013, which was published at the end of 2012, we were told that the reduction in the cost of drugs and other prescribed items would result in savings of €160 million in 2013 and €330 million in a full year. Did those savings ever materialise? In 2014 the expenditure report anticipated savings in the cost of drugs of only €78 million. That was significantly less than the €330 million that was originally predicted.

Clearly, Tony O'Brien was right in predicting that he needed up to €1 billion extra to do the basics. Basic adding and subtraction seems to be a problem on an ongoing basis in running the service. I do not think people are more sick, on average, this year than they were last year or the year before. In taking €1 billion out of the allocation between 2008 and 2010, notwithstanding additional initiatives that were introduced to fill the hole created by the UK's paying less in respect of a fund to which it used to contribute, as well as the shortfall in the health levy, the HSE operated within budget. We are very far from that position now. We have had the headless chicken approach to health, with bits and pieces being dealt with. We had the medical card debacle, which we all agree was a disaster; we had the suggestion of universal provision for children under six, with yesterday's Second Stage debate on the legislation, which was generally welcomed; and we have talk of universal health insurance, but there was never less running out the door in that respect. That in turn is putting more pressure on the public system. The Minister will forgive me for stating that we do not have confidence in the system. There have been debates on all aspects of it over the years and we will have more, but we will be opposing this Bill.

I note in today's newspapers, following a parliamentary question that was answered yesterday, reports that the review of maternity services has not started yet and that the Minister has not selected the people to conduct the review despite the fact that the now resigned chairman of the west/north-west hospitals group had prepared a report with his own company. One wonders under what authority they were acting. I know he has resigned, but the Minister might indicate whether the former CEO, Bill Maher, or the board as a whole had any input into it.

An Cathaoirleach

The Senator is moving away from the Bill.

Senator Marc MacSharry

I am just trying to use the time efficiently. The Minister has kindly made himself available to the House-----

An Cathaoirleach

That matter is not relevant. We are dealing with No. 3.

Senator Marc MacSharry

I know we are, and I have covered that in detail. Before I conclude, I wish to ask the Minister if he or the Taoiseach has had any direct contact with the chairman of the board of the West/North West Hospitals Group, Mr. Daly, before that report was prepared. With all the money we are trying to gather up to run the health service - I tried to give the Minister another €200 million in the measure I introduced yesterday, but his party voted against it - we cannot afford to be dishing out money to board members' companies to do reports that are not even sanctioned from on high. That is an issue that needs to be dealt with in more detail. There is some suggestion of the Taoiseach's relationship with members of the board or something like that.

An Cathaoirleach

The Senator is over time.

Senator Marc MacSharry

The Minister might bring clarity to that. It is a shock that nothing has been done in respect of the review of maternity services, but I am baffled as to why, in isolation - if that was the case - a company is seeking to dismantle obstetrician-led services in the five hospitals in the west north-west hospitals group. I thank the Cathaoirleach for his indulgence-----

An Cathaoirleach

I call Senator Colm Burke.

Senator Marc MacSharry

-----but I wanted to take advantage of the fact that I had finished my points on the Bill to ask the Minister about this most pressing issue.

Senator Colm Burke

I welcome the Minister to the House. This Bill is another step in the reform programme, as the Minister has outlined. It clearly sets out the manner in which we are bringing the budget back under the control of the Department of Health under the Minister. This is the right decision in moving forward in how we manage our health service. In view of what has occurred in the health service over the past 15 years and how we let many things go unplanned, this has resulted in a huge cost issue. This Bill deals with the requirement for the amendment of the legislation but it also provides that there will be proper procedures in place to ensure that the people who work within the HSE structure are accountable directly to the Minister and to the Department. Section 8 is important in that it amends section 31 of Act, which provides for the executive to prepare and submit a service plan to the Minister for his or her approval. The section providing for the amendment requires the HSE to submit the service plan 21 days after receiving notification of its net determination from the Minister. There are timelines set out in respect of the service plan and it is a matter of working over the following 12 months within that service plan and delivering the health care that is required. With regard to the health care budget, we have a major problem in understanding that the money we spend on health care is not Government money but taxpayers' money, and currently it is costing the Irish taxpayer, on average, approximately €254 million per week.

That is a huge amount of money and, obviously, will have to be carefully managed. In the period 2000 to 2010, no matter what occurred, we appear to have accepted what was submitted by the old health boards and later the HSE. In all those years the HSE has not stayed within budget. The budget must be looked at in the context of the amount of money that is being spent. The HSE has a budget of €13.2 billion to maintain services for a very large number of people. People think about accident and emergency services only if they have to attend them, yet attendances exceed a million per annum. In the past three years, day case procedures have increased from 650,000 to more than 850,000 per annum. That is a huge increase in the services provided.

We focus a great deal on expenditure in the HSE but not nearly enough on the delivery of health services. It is easy to complain when one item of medical care goes wrong. Everyone believes that no mistakes should be made, but given the volume of work, a very good health care service is being delivered. While we may have criticisms, and it is right that we continue to seek perfection, that is not easy to achieve, but much progress is being made in getting value for money. In recent years the budget has been reduced by more than €3 billion, yet the number of day case procedures has increased from 650,000 to more than 850,000 in this short period.

It is interesting to note that more than 130 submissions have been made in respect of the White Paper on universal health care. It is important to examine those submissions and take on board any constructive criticism to ensure a comprehensive plan is delivered with regard to how we manage health services into the future. We can look at other countries and the mistakes made there to ensure we do not make the same mistakes.

An area I have focused on in recent years is how to move forward with the recruitment of medical personnel and how to manage those working in administration in the HSE. I am concerned that positions for administrative staff are being filled internally without being advertised. Initially the positions are filled temporarily because the vacancy has arisen, whether it is at grade 5, grade 6 or grade 7. I ask whether that is the best way of building a comprehensive administrative section in the HSE. I do not believe it is. The issue needs to be examined carefully to ensure the right people are appointed to the right places and to ensure we do not have a scenario whereby somebody ends up in a position for which he or she is not suitably qualified. Likewise, we should not allow that to happen in respect of medical personnel. The Minister's decision to set up a working group, chaired by Professor Brian MacCraith, to carry out a strategic review of medical training and career structure is welcome. Its two reports were published in December 2013 and April 2014. When set up, the hospital groups need to be fast-tracked.

Of the 4,900 non-consultant hospital doctors, NCHDs, more than 54% are not Irish graduates, and the percentage is increasing. Also, a large number of our medical consultants are not Irish graduates. As taxpayers, we are spending large amounts of money on medical education and it is important that there is a return on that expenditure. We must ensure that those we assist through college with medical qualifications are involved in the future development of our health service.

Overall, I welcome the Bill. It is an important step. It deals with an issue on which much work has been done in the past three years, but much remains to be done to reach the target of universal health care. I thank the Minister for introducing the Bill.

Senator John Crown

This is obviously an important way station in the process of health care reform and, as such, I support it. We were in a situation whereby a largely unanswerable bureaucracy had been given the outsourced job of operations management of the health service, with a rather loose level of political control for the most macro of macro questions. This brings the military back under civilian control, so to speak, and it is welcome, but it is a way station.

If I understand the model of universal social insurance that I hope will be implemented, it will be a small step between the HSE and where we are with this, a little piddling micro-step compared to the massive journey we have to make to get to the status of a truly social-insurance-based model. In such a model, the Government's role will be regulatory. Its role will be to ensure that the insurance mechanisms are in place, to ensure a degree of redistribution of resources between people who are better off and those who are worse off, which is necessary to make a health insurance system work, to ensure the system is socially responsive and efficient, and to ensure that a mandatory insurance deduction of a fixed percentage will be made against the entire income of every person in the State. That means that people who have a large income will pay much more than those who have a smaller income, but at the end will walk away with the same insurance instrument in order that they can go to the same hospitals and the same doctors. It will not be legally acceptable for any institution to cherry-pick and say it will take only people with a certain type of insurance. I hope there will be - as in countries such as Israel, which has an advanced version of this model - a basket of basic services. If one goes to the insurance market, insurers must provide certain services. There is no negotiation on them, and those drugs, procedures, treatments and diagnostic tests are covered completely.

While the State will assume a major regulatory role, the corollary is that it will lose its management role entirely. The system will not be owned exclusively and managed by the State and State actors. I hope that in the new dispensation most of the actors will be not-for-profit insurance companies and not-for-profit hospitals, but they will not necessarily be owned by the State. If somebody sets up a very efficient private operation, perhaps run by a university or a charity, or even run on a for-profit basis - sometimes they get it right - the only thing that will be mandated of it is that every citizen can walk up to the door, wave his or her insurance instrument and say, "I want to be your patient. I am supposed to be the patient of the State hospital down the street." That has to be the nature of the level playing field.

I sometimes misunderstand the types of reform that are taking place towards the goal of universal insurance. I must avail of this opportunity, as I do not get to speak to the Minister too often, so please forgive me if I take this as a high-end private consultation for the next several minutes. Some of the reforms which have taken place do not appear to be reforms that are configuring the system towards that kind of insurance model. Instead, they look as though they are configuring it towards an internal-market version of the NHS, which is a system under which the State still owns everything, runs everything and sets national contracts for all employees. Under that system, every health care worker is an employee of the State.

The only aspect of the principle that money follows the patient in the NHS is that there are different groups, such as fund-holding GPs, which can determine where within the NHS a patient can go. It is a different model and I hope that we are not aiming for it. While the term "Dutch model" is frequently used, the Minister will realise that when he entered into coalition with his partners in the Labour Party, the synthetic model which emerged from both parties' laudable health policies resembles to a much greater extent the German model. It is the "Deutsch", not the "Dutch". It is a system which has a mix of voluntary-----

Deputy James Reilly

It will be "d'Irish".

Senator John Crown

In 120 years time, I hope people refer to the "Reilly model" of health care the way they now refer to the "Bismarck model". The Minister is right that we have an opportunity to do something entirely new here.

Senator Marc MacSharry

The Bismarck sank.

Senator John Crown

It was not named after the ship. It was named after the Iron Chancellor who in 1885 introduced what has become the longest, most durable, most successful, most resilient and most admired health system of any country. It is a system based on social solidarity, social democracy and treatment according to need not ability to pay. It is a system based not on the state running everything but on the state ensuring that there is a level playing field for everybody who comes into it. It is the model we need to emulate.

I ask the Minister to look critically at some of the way-station reforms which have been made in terms of things like hospital groups and national contracts and understand that the ultimate logic of where we are going with this is that many of the way stations will be obsolete and anachronistic. In the new dispensation, one may have very different kinds of doctors working. There may be doctors who are entirely private but take patients coming with their insurance instruments who would currently be called public patients. There will hopefully be doctors - I would love to be one if the opportunity arose - who are employees of a medical school and real professors unlike the situation we have now where we have nearly no one in that role. We may have some doctors who elect to work part-time in Government hospitals while others elect to work in partnerships with for-profit clinics. There will be different models available. What everyone will have is the same freely negotiable insurance cover. One can pick and choose the kind of doctor or hospital one wants to go to. In this system, large State-run hospital groups may not find themselves in a favourable competitive environment. The notion of having fixed national contracts for all doctors as if they all had the same unitary employer may not be feasible.

I wish the Minister well with his reforms. I am hopeful and confident that he will be in the chair he is in now to see through those reforms for the most part during the term of the current Government. It is potentially historic for our health service if these reforms come to pass. I ask the Minister not to waver, to keep pushing and to avoid being taken captive by the Civil Service.

Senator John Gilroy

Before I make my substantive contribution, I take the opportunity to correct the record, as Senator MacSharry would surely do if he had the opportunity to speak again. He said that overruns in the health budget are only a recent phenomenon.

Senator Marc MacSharry

I did not say that.

Senator John Gilroy

Indeed the Senator did. The record should read that in the past 17 years, there were 14 years with overruns. This year's overrun of €158 million, as quoted by Senator MacSharry, represents 0.0166% of the budget. In a demand-led system, that is not the disaster it has been portrayed to be by my good friend, Senator MacSharry.

The Bill is highly technical and gives expression to the Government's objective of retaking financial control of the HSE. Not many people know that under the terms of the Health Act 2004, the HSE is funded through a separate process to the funding process for the Department. Under the Act, the Minister has no legal role in setting budgets, which is a remarkable thing. When the Health Act 2004 was enacted, this was considered a good thing in that it allowed the HSE to have a greater level of autonomy. However, in the absence of robust - or any - reforms to create an accountable system of health care, the grand idea of HSE independence created a situation in which accountability to the Minister was weakened entirely. It is difficult at this remove to understand the thinking that informed the decision to go down this route. Political expediency may have had a little to do with it. The hands-off model of administration which the 2004 Act establishing the HSE created probably suited the then-Minister who was generally thought to have been the least competent Minister for Health that we have had for a great many years. He continues to act as leader of the Opposition.

Some of us at the time who were involved in the HSE consultative fora, which were established at that time, realised that a bureacracy as large as the HSE was a disaster waiting to happen in the absence of ministerial control and accountability. I was very vocal about this when I was a member of HSE South's consultative forum, as were many of my colleagues. Warnings by mere county councillors fell on deaf ears, which is a reason I welcome the legislation as part of the Minister's work to regain control of what many commentators have always described as a bureaucratic jungle. The creation of a new financial structure is one part of the administrative jigsaw. It comes on top of the decision to abolish the board of the HSE in 2012, which the Minister was bold enough to do. He received criticism at the time, but he has turned out to be 100% right. I commend him for that. In setting up a statutory funding framework, the Minister takes us a step further, as Senator Crown has acknowledged, towards delivering the wide-ranging reforms set out in the programme for Government. Change in one area is always felt in another, which is why section 8 provides for the adapting of the service plan to take account of the changes.

I am particularly happy with the insertion of sections 34(a) and 34(b) of the Act of a statutory obligation of the Director General of the HSE to appear before the PAC. It is very welcome in light of what we have seen recently among other senior civil servants appearing in front of the same committee. I have been critical of the HSE for a long time, mainly due to the difficulty in obtaining information, the cumbersome nature of decision-making and the perceived lack of accountability. The Minister might advise me as to whether it would be possible in this or another Bill to introduce changes which give real bite to the regional consultative fora which are established in local government. HSE South's consultative forum is comprised of 39 members of local authorities from seven or eight counties. All other regions have the same set up. I was a member and the leader of the Labour Party on HSE South's consultative forum for a number of years and I note the frustration felt at stonewalling by the HSE regarding the provision of relevant information. Any reform in that regard would offer bottom-up accountability as well as the accountability of the HSE to the Minister. We would have accountability on both sides of the equation.

The Bill is an important step in redressing the weaknesses in the HSE. Many Bills contain references to the Minister for Public Expenditure and Reform. How will that work out in future given that previous Governments have not established such an office holder? Does it mean wide-ranging reforms will fall or will one Bill repeal all mention of the public expenditure and reform ministerial responsibility? What way does it work?

We will reflect on those questions and discuss them in more detail on Committee Stage. I commend the Bill to the House.

Senator Sean D. Barrett

I welcome the Minister to the House and wish him well in his mammoth task. It is probably the most difficult task in Irish public life to reform the health service. I note from the first page of the Minister's speech that we are on a journey to the dissolution of the HSE. Our briefing document from the Oireachtas includes the steps mentioned by Senator Crown towards more freedom for hospitals in the model to which the Minister is moving.

I was associated with one of the moves the Minister is reversing - the creation of the HSE - as I served on the Brennan commission.

I agree with what the Minister is doing today. We all learn as we go along. Health was local, then regional and then national, and now it is being devolved back to individual hospitals. I think that is the correct way to proceed. I am not trying to justify anything ex post facto but what influenced us was the fact that the old regional health boards were never able to strike budgets and annoyed a sufficient number of people to the point that their abolition was commended. Thereby hangs another tale, because there were no savings. The headquarters in places such as Kells simply transferred to something else. That is a problem. People arrive from the south and west in Dublin and see a former hospital changed into offices for health bureaucrats. When I used to go to matches in Tullamore, the relatively large building on the way into town was the headquarters of the Midlands Health Board and the relatively small building beside it was the hospital. I think that is being addressed, and the hospital has had an extension. We have a huge problem in that there are still around 8,500 medical and dental staff but nearly 16,000 management staff. My sector in education experienced the same kind of problem. A US economist called it Baumol's disease. It should not exist and does not need to exist. When I am sick, I want to see Senator Crown or, indeed, the Minister. I do not want the other 16,000 administrators doing calculations and converting hospitals into office blocks. We have the same problem in education. The basic transaction is quite low-cost. It involves a podium and lecturer and, hopefully, something happens within 50 minutes with more than 400 people listening. If one can do it that way, it is an extremely worthwhile proposition.

I hope that the dissolution of the HSE, of which this Bill is a part, will tackle the fact that we gained no administrative efficiencies from the abolition of regional health boards. I appreciate that the Minister has inherited an extremely difficult situation and that he has managed to run the health service, according to the December 2013 figures we received, with 99,959 staff, compared to as many as 111,770 in previous years. From the mid-1980s to the peak of the boom, the Minister's predecessors doubled the number of staff in the health service, from 55,000 to about 111,000. That seemed to take place without any regard to what the outcomes were and whether patients would be better off. We lost the focus. This Minister has had to try to correct that. The Bill is a step along that road.

We have problems such as the bureaucracy I mentioned and the length of stays in hospitals. A report found that a treatment that would have taken about three and a half days in other countries took more than 11 days here. Another problem is the lack of competition. I hope that under the new system, the hospitals will compete. I do not want layers of bureaucracy. I want it to be the case that hospital X performs a particular operation because it persuaded a competitive insurance industry it could do it better than anybody else and it does not carry out excessive numbers of tests or keep people in hospital too long.

In developing the GP service, there is evidence that excessive hospitalisation exists because of the de-skilling of GPs, particularly where their practices are near major hospitals. This needs to be tackled. It is an immense task. I commend the Minister on taking on a gargantuan task that has probably been made far more difficult by some of the mistakes made in the past. It needs to be reduced to the simple transaction between doctor and patient. The bureaucracy and many of the irrelevancies must be removed. If we can do that by taking the Minister's route, including the dissolution of the HSE, I support him in that regard. It is long overdue. The burden has fallen on this Minister's shoulders, and I wish him well in the task.

Senator Trevor Ó Clochartaigh

Cuirim céad fáilte roimh an Aire. B'fhéidir gurb é seo an t-am deireanach a bheidh muid ag labhairt leis sa ról ina bhfuil sé. Is lá stairiúil sa mhéid sin é seo. It is essentially a technicality whether funding for health services is voted in separate HSE and Department of Health Votes, as has been the case up to now, or in one Vote, as will be the case under this Bill. What matters is that there is sufficient funding and that this funding is used to best effect. On both counts, this Government, like its predecessors, is failing. By the end of 2014, under the HSE service plan, almost €4 billion will have been taken out of our public health services since 2008. In terms of staff numbers, a further 2,600 whole-time equivalents are to go in 2014 on top of the 12,500 that have gone since 2007. Under the HSE divisional plans, hospitals are expected not only to function as last year but to perform better with a reduction of €200 million in their budgets. Acute hospitals that are already struggling face an average reduction of 4% in their funding. By the HSE's own admission, front-line care is being affected, with a projected drop of 25,000 in the number of day cases and a reduction of 3,000 in the number of inpatient treatments during 2014.

An example of how unrealistic these plans are is the target of reducing delayed discharge from acute hospitals by 4%. The allocation for nursing home beds has been reduced, which will mean many more older people spending longer in scarce hospital beds, because there are insufficient nursing home places for those requiring residential care. It is something I have noted at the briefings we get as Oireachtas Members from hospital groups and primary care representatives. There always seems to be a lack of joined-up thinking. Issues that could be dealt with in a primary care setting are often kicked to touch because of budgetary constraints and we end up having to pay far more money in the acute hospital setting to pick up the pieces. The patient is the person who suffers.

The report of the Mental Health Commission shows that only 44% of psychiatric hospitals and mental health facilities are compliant with staffing level regulations. It is ironic that we are here debating this issue when nurses from the Psychiatric Nurses' Association are protesting outside the hospital in Galway about the lack of psychiatric nurses there. It was predicted after the closure of St. Brigid's Hospital in Ballinasloe that additional pressure would be put on University College Hospital Galway. They are very concerned that while there should be a cohort of 50 nurses in that unit, only nine are there on a regular basis. They are very concerned about the level of care they are able to give under those circumstances. Certainly, it leaves much to be desired. Such policies are endangering the delivery of confident and responsive community-based services, as envisaged in A Vision for Change, which is the Government's mental health strategy. It is also of huge concern that the Mental Health Commission reports that children are still being admitted to adult units. A total of 91, or 22.3%, of all child admissions in 2013 were to adult units.

This Bill is essentially a technical piece of legislation as it provides for the ending of the HSE's separate Vote in the budget. In future, it is be funded through the Vote for the Office for the Minister for Health. However, in light of what I have pointed out regarding budget underfunding in 2013, the resulting necessary Supplementary Estimates and the underfunding in 2014, section 10 of the Bill is a cause for concern. It would mean an overspend in one year would be carried over to the following year as a charge on the HSE budget. It is relevant that Senator MacSharry raised the oversight issues that came to light in the west/north-west hospitals group. It is very hard to trust the Department of Health on issues such as this when we see that there was an issue with the procurement process in respect of the review of maternity services in that hospital group. It came to light that the chairman of the group had to resign as a result of that. If the Minister leaves office, will he make available before then the HSE report on that procurement process, which I know related to that particular review?

An Cathaoirleach

We are moving away from the Bill.

Senator Trevor Ó Clochartaigh

No, because we are discussing-----

Senator John Gilroy

By the sounds of it, the Senator has not even got onto the Bill.

Senator Trevor Ó Clochartaigh

-----the oversight of HSE budgets, which is relevant when moneys are spent on the west/north-west hospitals group and questions have been raised about it by the Minister. A number of other companies have received lucrative contracts from that group, leading to questions of how the public procurement process was complied with in those cases.

To put everyone's mind at ease, I call on the Minister to make the report available to us as soon as possible so that we can view what the HSE stated about the procurement process, the issues that arose and oversight of the group's board, and determine whether the CEO, Mr. Bill Maher, and its other board members have questions to answer about the way the trusts are moving forward. I have serious issues with the level of oversight of HSE budgets and the lack of joined-up thinking. Therefore, the Bill is not acceptable to us and we will oppose it.

Minister for Health (Deputy James Reilly)

I thank the Senators for their comments and questions and I will address some of the issues they raised. Perhaps I will start with Senator Ó Clochartaigh, who referred to fewer long-term care beds being available for lay discharges, as if such were the only solution for someone who did not necessarily need long-term care in a nursing home as we understand it, but more home care packages and a tiered approach to supported accommodation, which is something we are developing with a number of NGOs.

The Senator discussed the psychiatric nursing situation in Galway. We are implementing A Vision for Change, something with which all sides of the House agree. The Lower House did not divide on this issue last night. That strategy requires a change in the model of care, but at the core of everything we are doing is the fact that the basis of any measurement must be better outcomes for patients. It does not matter how nice a scheme is or how well built a building is. If the net result is not better outcomes for patients, it is all for naught.

The Senator also mentioned the issue of the number of children who are still being admitted to adult facilities. This is something that is not acceptable and we have been working hard on it. Although the number has reduced year on year, it is still happening. We want to reach a point at which no person under 18 years of age is admitted to an adult psychiatric unit.

Senator MacSharry stated that the review of maternity services had not yet started, but it has. A literature review of best international practice has been commissioned and is due to be completed by the end of this month. The HSE's review of services across all maternity units is due to be completed shortly and will feed into the process as well. That will inform the maternity services strategy, which should be finalised by the end of the year.

I agree with many of Senator Barrett's points. I accept that he has had to leave but, on the subject of admitting past mistakes, I have told him that we all make mistakes. In fact, the old saying that the man who never made a mistake never made anything at all is quite true.

Regarding changes in legislation on consultative forums, this Bill deals solely with the Vote arrangements and is not an appropriate vehicle for making consultative reforms. However, there is no doubt that there is a deficit in the democratic process arising out of the formation of the HSE. This must be addressed by giving the forums a real input. I decried the passing of the health boards. I was a member of one, although I was not involved in politics at the time. I wore a different hat entirely, but I was concerned about the loss of the democratic input.

The designation of the Minister for Public Expenditure and Reform will be changed by legislation.

Issues were raised concerning finances. Senator Gilroy comprehensively dealt with the fact that, for 14 of the past 17 years, the HSE and the Department of Health have incurred overruns. This is a difficulty with a demand-led service.

Senator MacSharry raised a number of other issues, but I agree with him about the HSE having been a disaster, but one of Fianna Fáil and its current leader's creation. I do not blame the people who work in the structure but those who put a structure in place that has resulted in significant frustration for those who work on the front line, have been trained to deliver excellence and are only too willing and able to do so. They have been frustrated by a monolithic structure of command and control that has removed the innovative ability of the front line to think on its feet. The arrival of the special delivery unit, SDU, which engaged with the front line in a meaningful way, has allowed for a resurgence of that innovation. Despite the loss of €3.3 billion, or more than 20%, from our budget, a reduction of 14,000, or more than 10%, in our staff, and an 8% growth in population since 2008, we have been able not only to maintain the service but to improve it in a verifiable, open and transparent way. The numbers from the Irish Nurses and Midwives Organisation, INMO, show this. Trolley counts were down 34% in the first three years and a further 7% this year, despite all of the challenges that we face. I pay tribute to and express my gratitude and that of the Government for the people working in the health service and the great job they do on a daily basis.

To err is to be human. As the airline industry does, we want to build proper systems that protect patients from the inevitability of errors. However, there is a major difference between the airline industry and health services. An airline can cancel a flight, but we cannot cancel an operation when a patient is on the table without him or her dying.

Several Senators raised the issue of manpower. I am pleased to report that I met Professor Brian MacCraith just before attending the Seanad. His third and final report is ready and we will publish it on Monday. It represents a great deal of work done by him and his team. I pay tribute to them, as this issue has been lying around for 30 years across successive Administrations. Like everything else in our health service, manpower has been allowed to evolve chaotically. We are setting a clear career path for young doctors and allowing a clear understanding of where demand will be when they enter training programmes. Proper training programmes will now be more reflective of international norms, without making doctors wait 12 years to become specialists when it only takes six years elsewhere. To those who claim this is too short a time, I say it is not. Even after 12 years, no one expects a brand new consultant to be as experienced as someone who has been there for 20 years. This is self-evident in any walk of life. People's progression will be supported. We need more mentoring of young doctors so that they can be advised on the paths they might take instead of being left to wonder how to make progress.

I thank Senators for taking part in this debate. I re-emphasise the Government's commitment to the health reform programme as set out in the programme for Government. The Bill will implement one of the commitments contained in that programme. While it is largely technical legislation and, as Senator Crown stated, only a small step on a long road, it is still part of a process that is designed to give people the health service they not only deserve but have paid for. It will be a single-tier service in which people will be treated on the basis of medical need, not on the basis of what they can pay, and, if I may say this to the Senators across the floor, one under which all Irish citizens will be happy to be treated in this country and will not need to go abroad.

The Seanad divided: Tá, 24; Níl, 8.

Tá

Bacik, Ivana.
Barrett, Sean D.
Brennan, Terry.
Burke, Colm.
Coghlan, Eamonn.
Coghlan, Paul.
Comiskey, Michael.
Conway, Martin.
Crown, John.
Gilroy, John.
Henry, Imelda.
Keane, Cáit.
Landy, Denis.
Moloney, Marie.
Moran, Mary.
Mullen, Rónán.
Naughton, Hildegarde.
Noone, Catherine.
O'Brien, Mary Ann.
O'Donnell, Marie-Louise.
O'Neill, Pat.
Sheahan, Tom.
Whelan, John.
Zappone, Katherine.

Níl

Byrne, Thomas.
Daly, Mark.
Leyden, Terry.
MacSharry, Marc.
Mooney, Paschal.
Ó Clochartaigh, Trevor.
O'Brien, Darragh.
Reilly, Kathryn.

Tellers: Tá, Senators Ivana Bacik and Paul Coghlan; Níl, Senators Marc MacSharry and Paschal Mooney.

Question declared carried.

Seanad Éireann díospóireacht -
Thursday, 3 Jul 2014