Second Opinion: Mismanaged, miscalculated: when will we heal the health service?

The system is not broken. It is just not designed to do the job it has to do

Managers and frontline workers need to know what each treatment and service costs per service user.

Managers and frontline workers need to know what each treatment and service costs per service user.


Around midsummer every year, HSE managers tell the Government and the public that it has overspent, again. The financial deficit will be at least €500 million by the end of the year.

The head of the Public Accounts Committee, John McGuinness, called on Tony O’Brien, the director general of the HSE, and Dr Ambrose McLoughlin, the secretary general of the Department of Health, to resign, because the HSE structure and budget management system are not fit for purpose.

This is true, but it is unfair to blame the managers. The HSE inherited a budgetary system that is not workable. Budgets are still allocated in the same way as when I started working for the health services in 1975.

HSE structures were developed by bankers, so it is not surprising the new system is no better than the old one. Nobody, not even very competent managers, and there are plenty of them in the HSE, can contain costs in a demand-led system where no one knows the costs of the various treatments and services. Unbelievable but true.

Network of services

Imagine the health services as a huge network of 48 massive hypermarkets (acute hospitals), hundreds of supermarkets (clinics, community hospitals, nursing homes, and agencies such as the Child and Family Agency), and thousands of corner shops (primary-care services, pharmacies, and services provided by voluntary groups grant-aided by the HSE).

These markets and shops are stocked with a year’s supply of goods worth more than €13 billion.

Unfortunately, communication between the various parts of the network is poor and collaboration is difficult. No one knows how much of anything is stocked in each shop. None of the goods has a price tag because nobody knows how much things cost.

Although managers know the overall value of the goods in their shops, they don’t know how many of each they have in stock. It is impossible to predict when stocks will run out. All the managers can do is hope they can stay within budget and shut shops when they are empty. What a truly senseless way to run a health service.

The HSE has a budget of more than €13 billion, a workforce of nearly 100,000 and huge numbers of people availing of the services provided by a very complex system.

According to the HSE’s annual report for 2013, nearly 4 million citizens availed of acute hospital services and a further 3.4 million received services from 7,007 primary care practitioners. More than 62 million prescription items were dispensed to medical card holders. The community ophthalmic scheme provided 829,867 treatments to adults and children. More than 7,000 sessions were delivered to 1,916 patients since the launch of the Counselling in Primary Care service in July 2013. A total of 2,857 outside agencies received grants of more than €3.5 billion.

The system is not broken. It is just not designed to do the job it has to do.

There is only one way to sort out the HSE’s budgetary problems. Managers and frontline workers need to know what each treatment and service costs per service user.

The Health Information and Quality Authority (Hiqa) has already calculated the cost of some procedures. A tonsillectomy costs about €3,000 and removing varicose veins costs nearly €4,000. How much does a social worker cost to work with one child? How much does a visit to an emergency department cost? Do any of the services produce positive outcomes? Who knows?


Service plans must reflect actual costs and specify that for €13 billion the HSE can deliver so many services and no more.

Hospital consultants and other health professionals should be given an annual quota of procedures they have to deliver on. How services will be rationed must be spelled out. No one wants to hear that services will be rationed, but there is no alternative.

The waiting-list figures – 4,937 people waited more than 52 weeks for an outpatient appointment in 2013 – show they are being rationed anyway, and the HSE might as well be upfront about it. No rationing means higher taxes.

Health managers have started service planning for 2015. Is it too much to hope that we will all know what services are available, how many of them are available and what they will cost per person? Can we move to a system where the HSE workforce is paid to deliver quotas of treatments and services?

Although health managers cannot be blamed for inheriting an unworkable system, they can be blamed for not making changes and developing a system that is fit for purpose. Jacky Jones is a former regional manager of health promotion.

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