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Monday 22 September 2014

Varadkar plans to hire medics on short contracts to cut spending

Published 28/08/2014 | 02:30

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Health Minister Leo Varadkar

Health Minister Leo Varadkar wants to hire hospital doctors and nurses on short-term contracts to cut down on the cost of agency staff, the Irish Independent has learned.

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Mr Varadkar also plans to get payments for private beds in public hospitals in faster from private health insurance companies.

The dependence on agency staff is contributing to the overrun in health spending and the failure to reach savings targets under the Haddington Road Agreement.

The European working time directive - an EU rule which limits excessively long working hours by hospital doctors - is believed to be contributing to increased demand for agency work.

The cuts in hours and changed working conditions for junior doctors have resulted in a noticeable increase in the spending on agency workers.

The recruitment embargo and drive to reduce staff numbers in the public service is restricting the hiring of extra staff.

The Department of Health is understood to be asking the Department of Public Expenditure for permission to take on staff on short-term contracts.

"You could allow the health service to take on temporary staff on temporary contracts. When you hire agencies, you are paying the worker, the agency for supplying the worker and VAT. You'd be looking at two or three years contracts," a senior government source said.

Public Spending Minister Brendan Howlin is expected to be more receptive to dealing with Mr Varadkar than his predecessor, Dr James Reilly. The Health Minister also wants to speed up the payments from private health insurance companies. The minister's officials see the continual delay in payments as a cashflow problem, which needs to be addressed within the health service.

Mr Varadkar will enter into Budget negotiations seeking an extra €500m on last year's allocation.

The minister will effectively be looking for the anticipated overrun in health spending to be paid over upfront.

However, he will guarantee the health service will then come in on budget, including the additional spending on the rollout of free GP care, and deliver on reform under the Haddington Road Agreement.

Every year for the past three years, the health budget has run over and required a supplementary estimate.

The minister will aim to get the overrun this year included in the base figure for 2015. The demand for an extra €500m will be an opening salvo, which is unlikely to be achieved.

This year, health spending is expected to be over by between €450m and €500m.

Last year, the Department of Health needed a €200m mini-bailout from the Exchequer.

Mr Varadkar is also planning to get his demands for extra cash in early to avoid a repeat of the farce around the health budget last year.

Just five days before the Budget was announced last year, Dr Reilly made a last ditch demand for an extra €1bn bailout to reduce cuts and expand services in the health service.

The revelation added fuel to the perception that the then Health Minister lost control of his department and his tactics in the Budget were naïve.

Coming so far into the negotiations on Budget 2014, where every other estimate was finalised, the request to Mr Howlin was regarded as utterly lacking in credibility.

The health budget eventually ended up with cuts worth €666m, but the individual details were gradually picked apart.

The sum to be saved from cuts in medical cards, known as medical card probity, was cut from an initial figure of €113m to just €23m.

The initial savings target of €666m was revised downwards after €47m worth of savings were found elsewhere.

"It's hard to see who won last year," a senior government source said.

But a number of factors will be working in Mr Varadkar's favour this year. The improving economic outlook means the planned Budget adjustment of €2bn is expected to be less than €1bn.

Irish Independent

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