2. Deputy Louise O’Reilly asked the Minister for Health to outline the position regarding a potential financial shortfall for the HSE of up to €881 million before the end of 2018; his plans to rectify this; if more funding will be forthcoming; if hospitals will have to increase stretch income targets to meet the shortfall; and if he will make a statement on the matter. (Question 6473/18 asked on 08 Feb 2018)

Deputy Billy Kelleher: Will the Minister for Health outline his views on whether the HSE will be within its budget in 2018? I am asking in view of the commentary by the director general of the HSE and the concerns consistently expressed from this side of the House on the aspirational elements of the budget that incorporate savings identified. Clearly, these elements will not be delivered. Indeed, it is already being said that the targets will be singularly challenging to deliver and that some are in fact more strategic and long-term in nature. Already, sizable amounts of savings must be realised to deliver the services outlined in the service plan.

Minister for Health (Deputy Simon Harris): I propose to take Questions Nos. 1 and 2 together.

I thank Deputy Kelleher and Deputy O’Reilly for their questions. We had an opportunity to engage extensively on this matter yesterday. The meeting involved myself and the director general of the HSE. Anyway, I welcome an opportunity to engage again this morning.

As I said yesterday, the need for effective financial management remains crucial as the health service deals with a larger and older population, more acute health and social care requirements, increased demand for new and existing drugs and the rising costs of health technology. The costs associated with these service pressures will increasingly need to be managed not solely through increased Exchequer allocations but through improved efficiencies, productivity and value from within the funding base in 2018 and beyond as well. This is the norm in other health services. It is probably the norm in most businesses and public services. People are asked to ensure they get value for money. If anything, it is more important at a time when we are increasing budgets that we do not get back into the Celtic tiger spiral of taxpayers’ money being spent without ensuring that it delivers decent outcomes for our patients.

The 2018 national service plan set out a budget of over €14.5 billion for the HSE, the highest budget ever allocated. The health budget was increased by over €600 million on 2017, a substantial additional level of funding by any objective standard. The amount allocated follows an extensive process of engagement between my Department and the HSE that considers the funding requirements as submitted by the HSE and the fiscal position available to the Government. These engagements are a normal part of the budgetary process and occur with agencies throughout Government.

As I remarked yesterday, it is simply that the process for health is more transparent since the director general and myself write to each other. I imagine someone may wish to find out whether IDA Ireland asked for money or this or that agency asked for money. Obviously, oftentimes agencies ask for more funding than the amount available. All public bodies put forward spending proposals but all such bodies, including the HSE, are required to operate within the amounts proposed by Government and determined by the Dáil.

While increased resources contribute to health service improvement, there are always ways in which improvements can be achieved within current resources. The HSE has my full support in achieving these improvements as part of our shared reform agenda.

Since I have come to office, the allocation to the Health Service Executive has increased by €1.4 billion or 10.6%. More resources are always welcome in contributing to the development of services but there is a responsibility on the HSE to seek greater value from the substantial existing resources at its disposal as well. Deputies heard yesterday from the director general and the deputy director general that they are up for the challenge as well. They accept that there is a need to ensure every euro counts in the delivery of health care.

The HSE 2018 service plan notes that provision of the level of services and activities will require the delivery of value improvements totalling €346 million. The HSE will lead on that aim, including a corporate value programme. It is focused on cost reductions and savings, including procurement savings and agency conversion, something we have talked about for some time but which needs to be delivered. It also identifies savings and cost reductions across all corporate operations. This might include better control of central administrative costs, such as travel costs, and better management of supplies. I imagine our citizens think these aims are appropriate, normal and good practice.

The Department of Health will work with the HSE within a shared governance and oversight framework. As Deputy Kelleher correctly stated, this will be a multi-year strategic initiative, because we need to get it right. The funding of our health service, and every health service, is a challenge and therefore we need to drive value. The objective is to identify and implement savings from improved productivity and changes in models of care or policies.

Health services to the public will not be reduced in 2018. The services to be provided in 2018 are as set out clearly in the national service plan. All levels within the plan are either equal to the level delivered in 2017 or, in many cases, higher than the level delivered in 2017. For example, as set out in the national service plan, the budget for acute hospital income will be set at €44 million less than the planned levels for 2017 and, as such, it contains no stretch targets. That addresses Deputy O’Reilly’s question about the stretch targets. The additional funding provided in budget 2018 for new developments will support new or expanded levels of services throughout priority service areas. I expect the HSE to operate within the funding provided to it in 2018. The HSE has signed up to do precisely that.

Deputy Billy Kelleher: The Minister used the expression “typically equal to or higher than planned or delivered” services in 2017. That does not give us much confidence in view of the fact that there is considerable pent-up demand. We have vast waiting lists. Large numbers of people are consistently on trolleys in our emergency departments day in, day out. There has been an extraordinary increase in the number of outpatients on waiting lists. Throughout the general health services there is an inability to deliver what is required of the services in terms of the changes in demographics, the changing nature of health and the provision of health care.

The Minister refers to funding being typically equal to or higher than what was planned or delivered in 2017. Last year, 2017, was not exactly a great year in terms of delivery. We are keen to see major improvements. In the budget we have provided for €346 million in savings to be identified to fund the delivery services. Many people, including me, maintain that is simply not possible.

Deputy Louise O’Reilly: Deputy Kelleher can add my name to that list. Of course it is not possible and the Minister knows that well. The Minister published a plan knowing he did not have the money to fulfil it.

Several questions leap out following the Minister’s statement. The Minister referred to transparency. In truth, that this information is in the public domain is down to freedom of information requests from Martin Wall. The Minister need not pat himself on the back for having information dragged out of him - it was not volunteered. It is in the public domain because of freedom of information requests.

The Minister referred to value for money savings and targets. He has a target for the money. How much does the Minister believe he will save on travel costs for administrative staff? Certainly, he will not save on travel costs for staff who are providing front-line services in the community. Those people have to travel; it is a necessity for the job. Is the Minister suggesting some people are over-claiming on travel? Is there a view in the Department of Health that over-claiming is taking place for travel?

The Minister referred to agency conversion and how it feeds directly into the recruitment strategy. The recruitment strategy is not working. The Irish Nurses and Midwives Organisation has said it – the Minister need not take my word for it. How does the Minister intend to convert? What is the plan? What are the targets? What amount of money is set beside each of these targets? How will we know? Will we be relying on freedom of information requests this time next year?

Deputy Simon Harris: When I write a letter, I am aware of the law of the land with regard to freedom of information. If I did not want processes to be transparent, I would not write letters. Presumably, the same is the case for anyone in my Department or anyone in the health service. I know some people, rightly, will use what this House has passed. I know how the law works. It is an entirely transparent process that I set out clearly in writing, subject to freedom of information, for everybody to see what I expect. What was yesterday described as an extraordinary letter was actually a terribly unextraordinary letter. It basically told an agency that we had given a lot of money to it this year, it needs to live within its budget, that is the norm for every other agency and that is what it has signed up to do. A service plan is meant to be a list of what one is going to do in 2018, not a list of what one cannot do.

I take Deputy Kelleher’s points, particularly about access. There is a need to do it much better. However, in the case of, say, home care packages, 750,000 more hours of home care will be provided by the Minister of State, Deputy Jim Daly, and the HSE in 2018. The budget for the National Treatment Purchase Fund, NTPF, has been doubled. We have already seen inpatient day-case waiting lists fall for five of the past six months. I expect that to continue right throughout 2018.

I am glad the Deputy agrees with me on the need for more capacity in the health service. That was not Government policy between 2007 and 2010, when beds were taken out the health service. We now plan to put them back in.

Deputy Billy Kelleher: It was also Government policy in 2011 and 2012.

Deputy Simon Harris: The Deputy is correct. It was the same in 2011 and 2012. The Taoiseach, when he was Minister for Health, reversed that policy.

Deputy Louise O’Reilly: I am delighted the Minister and Deputy Kelleher agree with me. I have been saying it since 2005.

Deputy Simon Harris: I know Deputy O’Reilly gets upset when I agree with her. I would not want to destroy her street credibility by doing so.

Deputy Louise O’Reilly: I have no problem with that when I am right.

Deputy Simon Harris: However, we need more beds in the health service. We will fund that through the capital plan which will be seen in the coming weeks.

Deputy O’Reilly is correct on the issue of recruitment and retention. That is why we have asked the public sector pay commission to look at strategies for recruitment and retention. This process was welcomed by the nurses’ organisations and one to which they will contribute. My Department will also contribute to it. I hope the public sector pay commission will accept there is a challenge, particularly with the retention of medical staff.

On the issue of travel costs, there is no impact on front-line staff. I was referring to reducing corporate costs. Every agency should be able to try to find savings of 1% or 2%. Every household can do that.

Deputy Billy Kelleher: I do not accept the Minister’s points about the delivery of service. The fact of the matter is that there is a significant demographic change occurring and huge demands will continue to be placed on the health service. This year, the health service will find it has not got the capacity, both financially and within itself, to deliver on these demands. We have seen this already at the start of the year with trolley numbers. January 2018 was the worst month ever for numbers of people waiting on trolleys. Beyond that, in the whole area of elective surgery, as well as for outpatient and inpatient appointments, I do not believe there is sufficient funding in place, even with the NTPF, to deal with and get to a situation where people can be seen in a timely manner. These are my observations with which many of those who put together the HSE service plan also concur. The savings identified will not be achieved.

Deputy Louise O’Reilly: I am delighted people are finally agreeing with what I have been saying for the past 13 years. I think I can go home now as my job is done.

The Minister is not going to hit value for money targets by reducing travel costs. To suggest he will is insulting to people.

Deputy Simon Harris: It is not just in that area.

Deputy Louise O’Reilly: I do not know of people in senior management, or at any level, in the HSE who actually drive around to claim expenses. I do not believe that happens.

Deputy Simon Harris: I did not say that.

Deputy Louise O’Reilly: I am happy the Minister has confirmed it will not affect people on the front line delivering services.

Saying something is transparent because it can be obtained under freedom of information is an issue on which we will eternally disagree. If it was a freedom of information request, it would not be there.

The correspondence shows there is a tension of sorts between the Department and the HSE. It arises from the fact the HSE has stated clearly it cannot fulfil the delivery of services. We also see the Department having a hand in trying to change the language the HSE uses. I found that quite disturbing. If the HSE brings a problem to the attention of the Department, the Department should be trying to work with it to address it, not trying to get the HSE to reframe the problem to ensure it does not look like such a significant issue.

Deputy Simon Harris: Deputy Kelleher rightly identified the fact we had a significant number of people on hospital trolleys in January. I pointed out that one of the contributing factors was the decision to reduce hospital beds. That is why we are going to put in more hospital beds. We already have opened 170 and we will open 300 this year. I expect the capacity review will be funded through the capital plan process.

I do not believe the debate about health care can always be just about money. If it were, then the problems in the health service would have been fixed many years ago. The idea that the answer to every challenge in the health service is to write another cheque misses the point. It has to be about value for money also. I know Deputy Kelleher accepts there are ways of getting better value for money for the taxpayer through savings in procurement, the use of supplies and corporate costs. These are used in other health services, such as the National Health Service, NHS. Members say they want to create a NHS-type system. This is the norm in many of the health services Members would like to create here.

Just to disagree with Deputy O’Reilly in case she gets too carried away, nobody suggested everything is going to be achieved in the value for money programme through saving money on travel. It is one of several elements through which one can make savings at corporate level. She knows this from her long time around the health sector. One can save money through procurement and supplies. One can save money in the same way any business or public service does without impacting on services.

Deputy Louise O’Reilly: I asked the Minister for the targets but there are none.

Deputy Simon Harris: The HSE made it clear yesterday that it will put in place a value improvement programme. We are asking people to find value for money in the context of not cutting but dramatically increasing their budgets. The health budget has increased by €1.4 billion since I became Minister. The health budget will continue to increase year-on-year. That has to be matched-----

Deputy Louise O’Reilly: Yet trolley numbers are increasing too.

Deputy Simon Harris: That has to be matched by reform.

Why does Deputy O’Reilly never comment on 479,000 people missing outpatient appointments? Why does she never comment on the fact that inpatient day-case lists have gone down for five of the past six months? There are good things happening in our health service too.

Deputy Louise O’Reilly: I do comment on those positive developments.