ANALYSIS:There is simply no more money for the health service. Budget deficits will inflict much pain, writes EITHNE DONNELLAN
HOSPITALS ACROSS the country ran up deficits totalling €99 million in the first four months of this year, a figure which is growing by the day. But they needn’t come cap in hand to Minister for Health James Reilly looking for more cash.
There is no question of them getting a bailout, Reilly insisted on Monday, stressing additional funding was just not on in an environment where the International Monetary Fund was “in the parlour” checking the Government’s homework every week.
Reilly was very clear. “We’ve all got to live within the budget that we have been given. And there’s no ifs, buts or anything else about that. That’s the way it is,” he said.
So what are hospitals to do now to balance their books? And what will be the implications for patients when the hospitals, on already reduced budgets for 2011, start implementing measures to make “savings” during the remaining six months of the year?
The Health Service Executive is remaining tight-lipped about what cuts are proposed. This is partly because the plans are being “refined”, but also because Reilly said just over two weeks ago he would put the cost-cutting plan before the people in the next few weeks, after hearing back from the four HSE regions on their proposals to make savings. This week, clarifying his position further, he said that plan was not yet ready but would be in “a couple of weeks”. The HSE is therefore happy to leave it to him to deliver the bad news.
This Minister, who has taken a much more hands-on approach to the day-to-day running of the health service than his predecessor, says it is up to hospitals rather than him to decide which services should be prioritised and which should be cut. But when some admittedly radical suggestions were put forward by Stephen Mulvaney, director of operations for HSE Dublin North East – like capping childhood vaccinations and hospital closures – he was quick to knock them on the head.
He has also warned hospitals they will have to explain to the public what decisions they have taken to balance their books and why. In a somewhat mixed message, he wants to announce the cuts but wants the hospitals to be accountable. Whether this will wash with the public from a man who in Opposition constantly called for closed beds to be reopened remains to be seen.
Informed sources say the necessary cuts will be dramatic. Even last year, when the country’s finances were not in such a dire state and when there was potentially more “fat” to be trimmed, we had ward and theatre closures at major Dublin hospitals like the Mater and Beaumont. Most are agreed the situation is now looking much more bleak.
“All sorts of proposals are on the cards . . . The cuts will be very severe,” said one HSE source yesterday.
A senior medic pointed out that, if hospitals have to live within their allocations this year, it will have “a profound effect” and certainly result in the closure of some services. “There are no other quick ways to save money in hospital medicine,” he added.
“They might also defer programmes that were meant to be starting up or try to accelerate hospital reconfiguration programmes in a way that is not really controlled,” he said, pointing to the plans to end round-the-clock emergency services at Roscommon hospital. This plan was left to the Taoiseach to confirm earlier this week after the HSE claimed no decision had been taken. The executive doesn’t seem to know what to say and when to say it in the new political landscape.
Figures for HSE expenditure up to the end of May are not yet available. They are due to be presented to the next meeting of the interim HSE board in about a week’s time and are expected to show hospital deficits continued to rise in May. They are likely to have grown to about €125 million.
Overall, the HSE was running over budget by €183.7 million at the end of April. Expenditure on community drug schemes and childcare services was in the red. And demand for medical cards and services such as dialysis is increasing.
Some €1 billion was taken out of the health budget at the start of this year. The HSE drew up a service plan indicating how it would run services within these constraints, but already it says more patients than planned are being treated in its hospitals. Emergency admissions were up 3.7 per cent for example in the first four months of the year.
To compensate for this and to cut costs, it is likely some patients will have operations deferred and waiting lists for outpatient appointments will lengthen further. Even now it can take years to get an orthopaedic outpatient appointment in some hospitals. Reilly said he could give no guarantees patients wouldn’t have to wait longer.
Paul Burke, a surgeon at the Mid-Western Regional Hospital in Limerick, says he does not know how his hospital – running the largest deficit at over €11 million – will cope if it has to make further savings, because it has already made significant changes. Emergency cases and cancer patients will have to be prioritised and relatively discretionary elective cases – such as hip operations and ear, nose and throat procedures – may have to be put on the long finger, he believes.
The biggest spend by the HSE is on its pay bill. If wards were closed and patients corralled into fewer wards, the bill for costly agency staff and overtime could be reduced. Agency staff cost the HSE €48 million in the first quarter, which is higher than over the same period last year, much of it necessary because of the moratorium on recruitment. But if wards and beds are closed, there are likely to be more patients on trolleys.
It is constantly stressed money will have to be saved without hitting frontline services by ensuring patients have shorter stays in hospital. And, as Archbishop of Dublin and chairman of the board of Crumlin hospital Dr Diarmuid Martin put it on Monday, it is very hard to see how we can keep the current level of service on a constantly reduced budget. “Even as an archbishop I’m not into miracles,” he remarked.
Huge savings could be made if the HSE had better information technology systems but this would require investment. It is estimated for example that, in the area of finance and procurement alone, up to 400 fewer staff would be needed if there was just one IT system, rather than at least eight, established.
While there is bound to be tough medicine ahead for patients as a result of planned cuts in the coming weeks and months, it may be possible for at least some of the current hospital deficits to be made up by adopting a more aggressive approach to income collection. A recent internal audit found the amount of private insurance income outstanding to public hospitals nationally in September 2010 was about €170.5 million.
If even some of this money was collected from insurers and if some of the payroll overpayments to HSE staff (which stood at €5.04 million at the end of 2010) was recovered, it could go some way towards softening the blow.
Eithne Donnellan is Health Correspondent