The issue is particularly pertinent for Government, as a demand led health service with a growing public expectation of standard of service and care is capable of absorbing a more or less unlimited amount of funding.

The Deloitte & Touche Value for Money Audit of the Irish Health System concluded that there has been no routine or systematic evaluation of value for money in the system and that it cannot on any evidence based approach show whether value for money is being achieved.

So how do we tackle this going forward? Our report makes a broad range of recommendations for improvement on the structure, organisation, funding and measurement of performance in the sector. Our key recommendations and the context in which they arise are summarised below:

We have recommended the establishment of a separate agency to focus on information provision in health, to engender a culture of measuring performance and to evaluate quality in delivery of care. We are particularly pleased to see that the new Health Strategy embraces this recommendation and that an independent Health Information and Quality Authority will be established in 2002.

Next, our report highlights a number of key structural and organisational issues which need to be addressed. The first of these concerns the Department of Health & Children itself, where we emphasise the need for it to concentrate on strategic planning, policy and monitoring and to move away from operational involvement in the system.

Secondly, we have recommended that a review of the Department be carried out to ensure that it is structured optimally to implement the programme of reform which is planned. This review will be required to address areas where it is either under-resourced (eg strategic planning, financial analysis and quantity surveying) or where it has no resource at all eg health economics and policy analysis.

The next area of organisational development concerns the structure and role of Health Boards. Some commentators have interpreted our report as recommending the abolition of Health Boards.

This is not the case. What we have said is that it is difficult to imagine in any demand-led service organisation, that a structure, which for the most part is now over 30 years old, can be assumed to be optimal in ensuring on the one hand that national strategies are effectively implemented, and on the other that local needs can be addressed.

The next significant recommendation concerns human resources in the health system.

Our report recognises the very serious difficulties facing staff and management in the health system in terms of both staff and skill shortages, difficult working conditions, and low morale.

Some commentators have chosen to interpret our report as an attack on those working in the system. Again, this is not the case.

What our report has identified is that many of the current managers in the Irish health system have grown up in an environment where the focus has been one of cost containment and restraint and where the emphasis has been on economy rather than efficiency and effectiveness.

Whilst their dedication to the service is unquestioned, the skills honed in this environment are very different to those required to proactively manage the increasing level of investment in the health system. The health strategy itself acknowledges there are major challenges in the human resource area.

We particularly note that the new strategy commits to broadening the remit of the Office for Health Management to support the organisation, management and personal development challenges posed by the new environment.

Organisational development in the sector also requires that more attention is given to integrated manpower planning. All participants in the health system have a role to play in improving value for money, and this includes clinicians who need to become more integrally involved in the management of the system, embrace clinical audit, and significantly improve the interaction between different disciplines within the medical profession.

On the question of funding, our report points to significant capacity constraints in the system and the minimal investment in information systems over a long number of years.

Significant increased investment in information systems to enhance measurement of performance is essential. We also advocate the development of public private partnerships in the procurement of certain aspects of the required health infrastructure. A multi-annual budgeting and funding approach is necessary to plan and implement strategies at national and regional level.

The allocation process itself, which has largely been incremental in nature, needs to be reviewed to ensure it is evidence based and includes the appropriate incentives for improved value for money.

Previous health strategies were criticised because they were not explicit in terms of objectives, deliverables, target dates and responsibilities.

The new health strategy tackles this issue head-on and sets the strategic agenda for change, one that is capable of being implemented and measured.

The challenge now is to undertake the wide ranging reform of the health system in a manner which can be shown to represent value for money to the tax-payer in terms of efficiency, cost effectiveness and more fundamentally in the improved health status of the population. David O'Flanagan is a partner in Deloitte & Touche and led the team responsible for the Value for Money Audit