There are serious financial challenges facing the health system, where demands for services are increasing, while resources have been diminishing. In addition, the cost of providing health services has increased considerably in recent years, with ‘medical inflation’ running considerably ahead of the ’all items’ rate.
As part of the reconfiguration of the health services, the Vote (budget) of the HSE has been ‘disestablished’ and is now funded through the Vote of the Office of the Minister for Health, since 1st January 2015, as a result of the enactment of the Health Service Executive (Financial Matters) Act. This allows for greater accountability to the Minister through the Department of Health and allows the Department to exercise much greater control of expenditure and resource allocation in the health system. You can find further information by reading Minister Varadkar’s speech to the Select Committee on Health Estimate for 2015.
Closer monitoring of expenditure on health services will be crucial to the success of the reform programme and the better allocation of resources. The HSE has set up a Finance Reform programme to deal with these challenges. One of the early outputs of the programme was the development of a new operating model for finance in health. The HSE has submitted a business case for a new operating model to the Department of Health and the Department of Public Expenditure and Reform which is receiving attention. The HSE has also engaged in pre procurement market engagement around the preferred option. This informed the finalisation of an ICT business case that was submitted to the Department of Health and the Department of Public Expenditure and Reform and will be subject to Office of the Government Chief Information Officer and Peer reviews.
Work is progressing on the Finance Reform Programme on a number of important work streams including the Integrated Financial Management System; Legacy Systems; Accounting Lead; Corporate Development; and Programme Management.