PAC to examine health service budgetary situation with HSE and health department

Chairman of the Committee John McGuinness, TD, said: “The HSE’s proposed measures to come within budget for 2012 need to be scrutinised by the Committee. The key issues for the HSE overrun are the cost of drugs, the use of agency staff and the cost of overtime, the impact and cost of absenteeism, the increase in demand led scheme costs, such as medical cards, and whether the new consultant contacts will deliver savings.

There was an overall absenteeism rate in the health service of 4.91% year to date against a target of 3.5%. The Committee will be interested in establishing the cost of absenteeism to the HSE in 2011 and what steps the HSE is taking to reach its target rate of 3.5%.

Agency staff are to be cut by 50% and overtime reduced by 10% as part of the suite of cuts that are planned to deliver the €130 million saving. In the PAC meeting of 28th June 2012, Mr Cathal Mcgee stated in his evidence that the target of cutting agency staff by 50% was ‘probably an unrealistic target’ but yet it is once again included in the most recent cost saving measures. The Committee will want to establish how does the HSE intend to make this saving viable.”

The reduced spending on drugs has not materialised and is a major factor in the current overrun, according to Deputy McGuinness.

“At the start of the year, the HSE was told that a new pricing agreement, together with the introduction of reference pricing and generic substitution would yield savings of €124 million this year. So far, an agreement has been reached which will deliver only €20 million in annual savings. In addition to this, new drugs will also be provided for which there is no budgetary provision. Drug costs here are around 17% of the total budget, while the NHS is only 9%. What is the reason for the delay in securing a new pricing agreement for drugs? Are the Department of Health and the HSE giving this area the priority that it requires, considering the possible savings it could yield?

The Committee will also want to establish if hospital consultants have formally signed up to the Labour Relations Commission proposals and if the new deal agreed with consultants deliver actual cost savings in 2012.”

The meeting starts at 5.30pm on Tuesday, 9th October in Committee Room 1, LH 2000.

Committee proceedings can be followed live at: http://bit.ly/24YmPI

Ends

For further information please contact:

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Houses of the Oireachtas,
Communications Unit,
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Committee of Public Accounts

Membership

John McGuinness (Chairman)
Kieran O’Donnell (Vice Chairman)
Paul J Connaughton,
John Deasy,
Paschal Donohoe,
Gerald Nash,
Simon Harris,
Michael McCarthy,
Mary Lou McDonald,
Sean Fleming,
Eoghan Murphy,
Derek Nolan,
Shane Ross