Press Release

Minister for Health calls for a united approach to challenges ahead

Commenting today, Monday 5th December, on the Government’s expenditure allocations for 2012, Dr James Reilly TD, Minister for Health said “the primary commitment in the Programme for Government insofar as it refers to health services is that it ‘is committed to developing a universal, single-tier health service, which guarantees access to medical care based on need, not income’ and that continues to be our aim. Today, we have delivered two important measures with the allocation of €35m for new mental health services and the €15m necessary to provide free GP care for people on the Long Term Illness scheme.

“We have clearly set out our objectives but the reality is that reaching them is going to be very challenging for all of us. While the reduction in funding will impact across all programmes, the reduction in public service numbers, of which a majority are from the health services, will also impact on front-line services”.

The Minister acknowledged the progress made by the health services in “doing more with less” and in providing various flexibilities in line with the Croke Park agreement. However he said that “the reductions in funding for 2012 will pose major challenges and will require acceleration in the reform programme. I will be looking for support and co-operation from healthcare workers at all levels to minimise the impact this reduction in funding will inevitably have on those who need our care”.

In particular, action will be needed in the following areas:

  • further implementation of the HSE’s clinical programmes * which are widely acknowledged to be resulting in both service improvements and cost savings;
  • continued redeployment of staff so that frontline services are delivered in the most effective and appropriate manner;
  • revised rostering arrangements for nursing, medical and other staff to achieve more efficient delivery of services;
  • more cost-effective skill mix in the provision of services; and
  • much reduced reliance on agency and overtime working by reorganising the way services are delivered.

The Minister also announced a major change in the charging regime for private patients in public hospitals. Under existing legislation, public hospitals can not charge private patients who occupy public beds. This represents a loss of income to the public hospital system and provides a significant subsidy to private insurance companies. It is intended to introduce new legislation next year to allow public hospitals to raise charges in respect of all private patients in public hospitals. The Minister acknowledged that the new regime would have a significant impact on private health insurance premiums but pointed out that the new arrangements would provide much needed extra income for the public hospitals. He said “the new system is fairer and entirely in keeping with the changes required along the road to universal health insurance. Removing this subsidy to private patients will help to protect services for public patients”.

The Minister went on to express his regret that due to the current financial climate, he is not in a position to remove the 50c prescription charge, one of his goals on entering office. However, despite the very difficult budgetary situation, the Minister has ruled out an increase in prescription charges. “Since the charge raises €27m annually it was simply not possible to abolish it at this time, without adversely affecting frontline services.”

Given the pressure on the State finances, it is also necessary to take further measures to reduce costs in 2012.

The monthly threshold for the Drugs Payments Scheme is being increased from €120 per month to €132 per month with effect from 1st January 2012. This Scheme ensures that individuals or families do not have to pay more than the monthly threshold on approved prescribed drugs, medicines and certain appliances. The estimated saving to the Exchequer of this measure is €12m.


Estimates 2012: Summary of Measures

The original gross health sector budget allocation for 2011 was €13,748m. This figure has been reduced to €13,644. The net cash reduction required in 2012 is €183m, €104m saving on the gross Budget and an additional €79m to be achieved by generating additional income thus reducing the net allocation from the Exchequer. (It should be noted that the figures published in the Estimates for 2011 are €163m higher than the original allocation. This is due to a number of once off technical adjustments to the 2011 allocation).

In addition to the target saving of €183m there is an additional €310m required to meet unavoidable cost increases in superannuation, demand-led schemes and Fair Deal and €50m to meet Programme for Government commitments. As a result, savings measures amounting to €543m in total have been agreed by Government.

In addition, the health services will have to deal, within its expenditure allocation, with

  • any underlying deficit at the end of 2011;
  • other unavoidable costs such as increments, general non-pay inflation (CPI) and the EU agency workers directive;
  • any Budget 2012 measures which have a cost impact on the health service; and
  • the increase in health and social care needs arising next year from population growth, ageing and increased disease incidence.

The combination of these factors and the reductions in health service numbers recently approved by Government will result in reductions in services in 2012 and beyond. The extent and nature of the impact on services will fall to be addressed in preparing the HSE’s National Service Plan for 2012.

Hospital charges for private patients

It is intended to increase the charges levied on private patients which will come into force from 1 January 2012. The Department will write to the HSE and private health insurers informing them of the new rates for 2012.

It is also proposed to introduce legislation to allow hospitals to raise charges in respect of all private patients in public hospitals. In addition, as announced last year, there will be a further increase in the charges for private beds in public hospitals in line with the recommendations of the Department’s 2010 Value for Money & Policy Review of the Economic Cost and Charges Associated with Private and Semi-Private Treatment Services in Public Hospitals. The Review recommended a refined per diem costing methodology which allowed for higher private patient charges in 2011 and 2012 for the purposes of generating revenue and reducing the previous subsidy for private treatment. An increase of €75m was targeted for recovery in 2011 (an overall increase of 21%) and a further increase in the charges will be applied for 2012 which will close the subsidy to private treatment and generate an estimated additional €18m (or approx 4% increase in income) for the health system.

Developments related Clinical Programmes and the Special Delivery Unit. *

The Clinical Programmes lead by Dr Barry White of the HSE, and fully supported by the Health Minister Dr James Reilly, are at the cutting edge of developments across a number of areas. The initiative, which provides a major step forward in clinical leadership in the health service, is producing benefits of both a clinical and an economic nature. With the development of programmes such as: the Productive Theatre Initiative (getting the maximum from hospital theatres), the Acute Medical Programme (improving access to hospitals by people who seek unscheduled care), the ‘money follows the patient’ initiative in Orthopaedics and the developments in Stroke Units in our hospitals, it’s expected that major savings can be achieved in the more effective use of hospital beds.

The Special Delivery Unit, established in June by Dr James Reilly, is also making significant strides. The unit is charged with improving performance in the health system and in the process reducing waiting lists. In July Minister Reilly and the SDU established a target of ensuring that no one is waiting for elective treatments for longer than twelve months. At that time the target applied to14,000 people. The target date for achieving that outcome is the 31st of December of this year. That target is now expected to be met.

The Special Delivery Unit has also been engaged in providing High Intensity Supports to a range of hospitals experiencing difficulty with trolley numbers. Although this process is only a few weeks old, there are certain encouraging signs of improvement.