Key parts of HSE cuts plan rejected

THE DEPARTMENT of Health has rejected Health Service Executive proposals to close additional beds and reduce elective or non-urgent activity in hospitals as a means of tackling its €280 million financial overrun.

In a confidential letter sent last Friday the secretary general of the Department of Health Ambrose McLoughlin told the HSE chief executive Cathal Magee instead to pay particular attention to overtime, sick leave, use of agency staff and drug prescribing by doctors.

He also sought an immediate review at regional level of all budget allocations and programmes to identify areas where money had been underspent, any schemes in development which were not yet in place that could be delayed or deferred or any opportunity to reallocate resources.

Mr McLoughlin’s letter does not deal specifically with issues such as the legislation the department was to introduce to generate additional revenue from health insurers or a proposed new deal on drug prices with the pharmaceutical industry. The HSE has argued these are key elements in driving its deficit.

The tone of Mr McLoughlin’s letter is quite sharp in places, containing both explicit and implicit criticisms of management in the HSE. It follows on from what highly-placed sources described as a “very tense” meeting of the HSE board last Thursday.

The board meeting discussed the latest figures which revealed that the HSE deficit had grown by €80 million in a month to reach €280 million by the end of May.

The HSE had drawn up its own cost-reduction proposals but key elements were rejected.

In his letter Mr McLoughlin stated: “The notion of closing hospital beds and reducing elective activity was brought up in your cost-cutting plan. This is not acceptable to the department. I note that recent performance reports indicate elevated levels of elective activity. I do not share your views that this is driven by the need to achieve targets, since we have many hospitals not effectively managing their resources.”

Mr McLaughlin also said there were “serious management deficits” within the HSE’s primary care reimbursement service.

“We must seek to reduce the cost of each [medical] card, or at least control the cost of each card. The present rate of prescribing needs to be managed more cost-effectively.” He proposed the introduction of an advisory service for GPs to cut prescribing costs and to increase generic prescribing and the development of a “proper” business case for a pharmacy review of high prescribing practice and high utilisation patients.

He also said the overall sickness rate was too high and the use of agencies had to be more effective.