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Wednesday 1 October 2014

Health service managers face new pressure to deliver on spending cuts

Published 08/08/2014 | 02:30

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Health Minister Leo Varadkar

A clampdown on health service managers who are failing to implement spending cuts, particularly around wage costs, is being planned by the Government.

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A senior minister told the Irish Independent that executives have been "pulling rubber levers", by making decisions at the top with no implementation on the ground.

Senior government figures have been repeatedly frustrated by the failure to reduce staffing costs in hospitals as a result of the continued employment of agency workers.

"The over-reliance on agency staff is actually costing more," a coalition source said.

The failure to manage budgets has resulted in repeated spending overruns, which this year is heading towards €450m. The HSE is set to miss its €290m savings target under the Haddington Road Agreement this year by as much as €100m.

But Health Minister Leo Varadkar has vowed there won't be an overrun in the health budget next year and is understood to be planning to ensure spending targets are reached.

And Public Spending Minister Brendan Howlin says senior management have been pulling "rubber levers" with no action on the ground.

Mr Howlin appears to be more confident about dealing with Mr Varadkar on managing spending than his processor, Dr James Reilly.

He says he will work closely with Mr Varadkar to ensure there is a realistic budget in place next year.

"And then actually have control mechanisms in place so that what is decided is actually implemented on the ground, because often, as people have admitted to me, they are pulling rubber levers at the top and it is not happening on the ground, in terms of the control of expenditure and the way things are happening," he said.

"It's management at service delivery level often that is not completely in synch with what policy is at national level. It's a matter of just ensuring there is a direct connect, there is a structure there and people are held to account to deliver on what is agreed," he added.

Mr Howlin says the health budget next year needs to be "realistically achievable".

The negotiations in health for Budget 2014 were a tortuous affair, with elements being torn up.

In particular, last year, the medical card probity savings were reduced from €113m to just €23m. The original figure was hugely controversial amid claims it was created at the last minute. Mr Howlin indicated lessons were learned from the previous experience, when the health reduction was an infamous €666m.

"I know exactly what issues needed to be addressed last year but I will leave those to my memoirs," he told the Irish Independent.

Mr Howlin said he accepted the health sector was demand-led, making it difficult to predict the number of patients who will need treatment on an annual basis.

"You can't shut up shop for sick people if people are presenting in hospitals or anywhere else. You have to provide the service. I think we have to have a degree of realism around that. But as long as that is within manageable levels, I think both the Department of Health and this department will be content," he said.

Mr Howlin said health, education and social welfare were all under demographic pressure, but the health service budget had to be "realistically achievable".

"It is trying to forge a health service that delivers need but in a structured way. We can't deal with all demand for new and varied services. No health service in the world can. There is some form of health spending controls in even the richest of societies and we have just come through such an extraordinary difficult period for us," he said.

Irish Independent

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