Healthcare not about 'cost overruns' but investment

Mon, Sep 3, 2012, 01:00

OPINION:Budget plans to reduce spending on care for ordinary people arise from a systemic failure to see the value of the resultant wellbeing

THE DECEMBER budget process is well under way. Reigning back the so-called health “overspend” is now a key policy theme and one that may be used to justify further cutbacks and the closure of more capacity.

Indeed, the International Monetary Fund has incorporated this into its analysis of the Irish economy and in its policy prescriptions. The seventh quarterly report of the IMF-EU-European Central Bank troika, in mid-2012, said: “Measures to address the emerging spending overruns in the health sector are to be specified before the end of September 2012.”

That there are such “overruns” is a myth and one that is destructive of morale within the public health system.

Furthermore, that a government (or troika) actually believes that cutting €23 million from home help, homecare and disability services can contribute to stabilising the economy is incredible – these latest cuts are clearly counter-productive.

In the Health Service Executive plan for 2012, the total quantifiable cost reduction target was €750 million. This followed two of the toughest years in the recent history of the health service, with the HSE experiencing total budget reductions of €1.75 billion.

Endogenous pressures were explicitly acknowledged, but not resourced. Assumptions built into the plan were problematic.

There is therefore no meaningful sense in which the budgetary outcomes of the HSE service plan 2012 can be categorised as “cost overruns”. Budgetary slippage was absolutely inevitable from the very outset.

If you set impossible targets, there are going to be shortfalls. It follows that there is no realistic basis on which 2012 “overruns” should be subject to “corrective action” in the December budget.

The real problem lies in efforts to obscure a fundamental reality. Ireland’s stressed fiscal position and the manner in which it is being “corrected” have resulted in lower public healthcare funding and, consequently, reductions in healthcare capacity, activity levels and service provision.

Risks to health status have increased. So too has rationing. Even senior medical and nursing staff have been emasculated of responsibility: “You want some more stationery? Send in a business plan.”

This is foolishness: it does not save money – it costs money.

The limits to “doing more with less” and similar management-speak platitudes within the system as it stands have been well and truly reached. Meanwhile, there is an affordability crisis in the public health sector, transmitting further pressures to the system.

Mythical “cost overruns” serve a useful purpose in these circumstances. They divert attention and make it easier to take refuge in a mindset that says, in effect: it’s their (ie junior doctors, consultants, nurses, healthcare providers – whoever) problem. If only there were a little more legislation, a few more powers, a little more control and public expectations of quality, equality in healthcare could be delivered.

Not so. The problem goes deeper than this.

In the 2012 service plan, the HSE points out that “healthcare is a people business”. So it is. But “people” should encompass not only those who need care but, also, those who struggle to deliver such care and who see through the whole “cost overrun” mythology. Many are frustrated. Some are worried and even fearful.

The 2013 health budget, to be credible, needs to accommodate some realities.

The first is realistic budgeting so that impacts are visible and can be debated. The HSE has tried to do this. It is difficult for the Government. But a must do/can’t do dialogue is no basis for planning, let alone delivering, healthcare.

A second is that healthcare expenditure is an investment. The Health Strategy 2001 makes the point, in no uncertain terms, that “much of the public debate about health services is focused on the increased cost involved”; “the proper context for this debate is one which views health spending as an investment delivering benefits as well as accruing costs”; “better health also brings more direct economic benefits”; and “good quality health infrastructure is likely to be an important factor in improving the attractiveness of particular locations in the context of spatial planning or industrial and commercial development”.

To acknowledge this reality, in the current environment, is tantamount to challenging “troikanomics”. It is easier to foster the illusion that health expenditures are “costs” that can be simply slashed to meet fiscal targets and with little impact on health status.

But the moment that one argues that healthcare is, in fact, more properly regarded as an investment, with measurable economic benefits, then the logic of what is being done to the health system falls to the ground.

A third relates to a lack of responsiveness to opportunities. The continuing failure to deliver a new national paediatric hospital, despite the very best efforts of specialists and others, is a case in point.

Some months ago, James Sheehan offered in the pages of The Irish Times – and for the second time in six years – to develop and deliver such a hospital on a greenfield site accessible to patients islandwide.

Sheehan’s stature as an internationally acknowledged orthopaedic surgeon, allied to his track record in delivering technically outstanding and socially responsive hospital development, most recently the Galway Clinic, is unequalled. No one lifted the phone to say “let’s talk”. In the words of Sheehan’s former colleague and collaborator, the late Maurice Nelligan: “The pity of it.”

There is a lack of real engagement between Government and the healthcare and allied professions. What is in place is cold and contractual. The concept of vocationalism within the health service is increasingly being crowded out by a techno-managerial model.

This model obsesses about metrics and contracts and control. But it does not deliver proactive relationships with those trained to provide care. It cannot, therefore, deliver improved outcomes for patients.

Healthcare is scarred by a culture of adversarialism. There is much that could be done differently and much waste that could be eliminated from the system. There is much the Government wants to do. But there is little incentive to engage now, especially when savings do not go directly to mitigating the effects of cutbacks on patient care but can be sequestered by a flawed system, with barely an acknowledgement except “right, what’s next?”

Few of our outstanding clinicians are asked to take responsibly for delivering at a national level what they have trained, in some of the most prestigious facilities, to deliver to their patients. Directors of nursing do, at a local level, what needs to be done across the entire system. “Seeding” the system with this kind of leadership holds out a more realistic prospect of navigating our health system through the present headwinds than does a persistence in management by acronym and a fixation on “cost overruns” as a substitute for investment, responsiveness and real engagement.


Prof Ray Kinsella lectures at the UCD Michael Smurfit Graduate Business School

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