€50m to be used to offset health service overspend

Nearly €50 million which was earmarked for the provision of additional hospital beds, as well as for developments for medical card patients, is to be used to deal with overspending in the health service.

The Department of Health said there had been delays in recruiting staff and in the construction of new hospital modular buildings – which will not be put in place until early next year – and for developments in the general medical services scheme.

It said €49.871 million in funding originally to be spent on these initiatives would now go towards meeting a deficit in the HSE from 2017 which legally has to be funded this year.

Official documents also show that €90 million of the additional €625 million funding set out by Government for the health service in Budget 2019 will now be allocated – along with the savings from the delayed provision of hospital beds and other developments – to meet the cost of an HSE overrun in 2017.

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Department of Health sources said construction of a planned modular hospital would not be completed until 2019 and as a result the funding would not be required until then.

The plans to divert the funding to deal with overspending is contained in a confidential letter sent in mid-October to the HSE. The letter sets out the strategic direction of the Minister for Health Simon Harris for the organisation for the year ahead.

This letter also suggests that hospitals and health agencies that perform well will see increased funding.

‘Should be rewarded’

The letter says that “work that is done well should be rewarded and work that is not done well or should not be done at all should not be rewarded”.

The Department of Health letter also indicates that a new dedicated pharmaceutical value improvement programme across community and hospital settings could unlock very substantial savings to meet the cost of new drugs approved by the HSE. It says €3 million will be provided next year to facilitate the early establishment of this new programme.

The letter, sent on October 17th by the secretary general of the Department of Health, sets out the directions of the Minster to the HSE on the preparation and implementation of its national service plan for next year.

It says the Department of Health is holding back just over €200 million in health service funding for specific new initiatives next year. This includes €72.3 million for “primary care scheme changes” , €55 million for mental health services and €9 million for CervicalCheck including the new HPV vaccine.

The letter suggests the Government’s proposals to end the two-tier pay system for staff recruited since 2011 will cost €14 million.

Models of care

It says that there is also a need to reform the current funding system to ensure it encourages providers to make a better use of resources and supports new models of care as set out in the Sláintecare implementation strategy.

“Work that is done well should be rewarded and work that is not done well or should not be done at all should not be rewarded. It is considered that there is a significant opportunity to greatly enhance the contribution and relevance of the activity -based funding programme supplemented by quality of care criteria and to use it to reward productivity and appropriate care.”

Department of Health sources said it was envisaged that any such rewards would be aimed at hospitals and health agencies, which could receive higher funding, rather than individuals.

The letter also says that Mr Harris wants the HSE to give specific attention to ensuring health service activity was planned next year so as to anticipate and manage critical demand pressures, particularly in relation to pressures on emergency services during the winter.

“This must involve not just acute services but an uplift in planned activity levels in primary and community care eg home supports, transition care, GP out of hours [services/] and aids and appliances.”