ANALYSIS:If large-scale savings are to be made, the Government will have to introduce policy and legislation changes to permit reforms, writes MARTIN WALL, Industry Correspondent
SENIOR HSE management will this week resume deliberations on an instruction from the Department of Health that they draw up plans for cuts of up to €800 million in its Exchequer funding for next year.
In a letter to the HSE, the secretary general of the Department of Health, Michael Scanlan, said it should draw on the recent recommendations for cuts produced in the so-called Bord Snip Nua report as well as “any other appropriate measures” in preparing its cutback plans.
Mr Scanlan suggested that these plans, to be submitted by the end of next week, should contain a balance of savings which could be obtained through internal efficiencies and those that would require the Government to either change policy or introduce special legislation to implement.
In a brief statement last week, the HSE appeared to suggest that there was little more it could save through operational efficiencies alone and that policy or legislative changes would be needed to generate the savings required.
The HSE has not commented further on the cutback plans. It has already introduced value-for-money savings of more than €200 million for 2008 and has targeted efficiencies of about
€560 million for the current year. Much of these savings were generated through rationalisation in procurement policy as well as cuts in areas such as travel and subsistence and curtailing the use of agency staff.
In his letter, Mr Scanlan sought plans setting out the impact of reducing the HSE budget by €400-€800 million next year, in steps of €50 million.
However, initially the HSE is expected to seek clarification as to whether the proposed new cuts of up to €800 million will be over and above the value-
for-money measures already implemented in 2008 and 2009, which will inevitably carry over into next year.
Initially, HSE management is expected to look at work practice changes and non-core payments made to staff, as well as rationalising some services such as AE in Dublin and significant reforms to the medical card scheme.
One of the first areas expected to be examined is the current 9am-5pm core working day for most staff.
Management believe this is a significant contributory element in the €1 billion-plus paid out annually by the HSE in variable pay, which covers premium payments for working outside normal hours and special allowances, etc.
An Bord Snip recommended the introduction of a basic seven-day core week running from 8am-8pm within which staff would be rostered for duty without receiving any additional premium payment– Saturday and Sunday would form part of the regular working week.
The HSE is also expected to look at greater staff flexibility including compulsory re-deployment arrangements.
However, senior HSE figures are understood to believe the introduction of compulsory redeployment arrangements could require the Government to introduce special legislation to effectively overcome existing contractual terms.
As part of any cost-saving initiative the HSE is also expected to look at the consolidation of some hospital services such as the 10 full-time A&E services in Dublin.
The HSE may also examine the medical card scheme and the cost of drugs prescribed under the various community schemes.
The McCarthy group recommended that the income guidelines for the medical card scheme be revised to the basic rate of social welfare, that the monthly threshold for the Drug Payment Scheme be increased to €125 and that patients covered by the medical card and long-term illness schemes should make a co-payment of €5 for each prescription.