Secret report: HSE 'inert' and 'putting lives at risk'
A damning secret report prepared for embattled Minister for Health James Reilly reveals the Health Service Executive (HSE) to be an organisation racked by "inertia", with "unrealistic" plans for cost cuts which could place patients' lives at risk.
The 20-page "highly confidential" report seen by the Sunday Independent provides a shocking insight into the true state of chaos in Ireland's healthcare system, which has a budget of €13.7bn a year.
The explosive report, prepared by external experts, also warns that the Croke Park deal "may be no longer sufficient" to deliver further labour cost reductions.
The no-holds barred report -- produced by a team of experts led by Mark Ogden, CEO of the National Health Service North West in Britain -- was sent to Mr Reilly just two weeks before HSE chief executive Cathal Magee resigned last Wednesday.
The report -- called "A review of financial management systems in the Irish health service" -- found that only one in 10 of its financial management team who are responsible for spending €13.7bn a year are professionally qualified accountants.
A chronic shortage of expertise in some key management and financial control positions was also identified.
"It was estimated during meetings that only 10 per cent of staff involved in financial management and control are qualified -- in the UK, the equivalent figure is 25 per cent."
Cost-cutting by the HSE under the present government has been too slow and inefficient and the report warns that suddenly speeding things up to hit targets risks patients' wellbeing.
"The April financial returns indicate a potential financial crisis in 2012, with the financial position in the hospital sector looking particularly serious," it says.
Ireland's health service is facing "extreme budget reductions" as a result and the report says international evidence suggests such cuts are "not realistic".
"There is limited systematic quality risk assessment to assess safety impact of reductions in spending," it concludes.
Alarmingly, it finds there is simply "no motivation" to cut costs in Irish healthcare.
Instead a culture has developed "leading to people with surpluses either 'hiding' or spending them in the belief that unless they do they will be taken away, and people with deficits not being incentivised enough to control or reduce them".
The report found "inertia" in the Irish healthcare system with interviewees from the sector blaming this on "recession fatigue"; "a lack of clarity" around reform; "impact on morale" of how surpluses and deficits are treated; and "the present uncertainty about accountability arrangements".
"There may be up to three 'versions of the truth' at any one time," the report concludes. It finds that how the state spends its billions is "not driven by any health needs analysis" and is instead decided by "formula".
It said policy developments had ring-fenced spending on areas including mental health and disabilities leaving hospitals hit by a "disproportionate" share of budget reductions.
Hospitals were given "unrealistic" budget reduction targets and even though this was recognised at "every level of the system", the charade of trying to hit them was allowed go on and on.
It said that while the HSE watched hospital spending carefully, there was "little evidence" it was monitoring primary and community care spending sufficiently. It said that what savings there were from retirements had come at the cost of losing experience.
It said the HSE has projected a black hole of €552m this year but this was to some extent only guess work.
"There is considerable opacity about how forecasting and risk assessment is undertaken," the report states.
The review of financial management systems also makes recommendations about how to address the catastrophic failures identified.
They include: making the finance director accountable for financial management performance; increasing the capacity and the capability of the Department of Health before its takeover of the HSE; and agreeing financial target ranges for each region and developing a strategy as a "priority" to look after information and communications technology (ICT).