Press Release

Minister Reilly announces free GP care for children aged 5 and under as part of Budget 2014 Progress made in achieving more for less but 2014 will be a challenging year for the health services

The Minister for Health, Dr James Reilly TD, today (15 October) set out the key elements of Budget 2014 for the health services.

“I am very happy to announce that I have secured additional funding of €37 million to provide for free GP care for children up to and including 5 years of age as a key element of this Government’s programme of health reform”, the Minister announced.

“This is part of our phased approach to the introduction of Universal Health Insurance and a significant step as part of our reform of the health services. Despite the challenging year which we face in 2014 in the health services, with savings to be made, I believe it is vital that we pursue our reform agenda. Free GP care is about delivering healthcare close to people in their communities, at the lowest levels of complexity and the lowest levels of cost. That is why I have prioritised free GP care for children aged 5 and under because I believe in our change agenda and it’s vital if we are to create a health service fit for the 21st century. Of course, I believe that this measure will benefit families and the 240,000 children aged five and under in Ireland today, in particular during these economically challenging times”.

I am also pleased that we can continue to invest in mental health, with a further €20 million earmarked for mental health services in 2014, to be primarily used for community mental health teams”, said the Minister.

The 2014 provision for the health services is €13.660 billion (including €397 million in capital expenditure) and savings measures amounting to €666 million have been identified.

“Some difficult choices were required for 2014”, the Minister said. “While we are benefitting from the ongoing implementation of difficult decisions we took in 2013 – such as the Haddington Road Agreement – as well as the progressive and reforming decisions – such as generic substitution and reference pricing – additional savings measures will be required.”

The main additional measures are:

  • Reduce income thresholds for over the over-70s medical card to €900 per week for a couple and €500 per week for a single person;
  • Increase Prescription Charges to €2.50 per item with €25 cap
  • Medical Card probity
  • Instead of retention of full medical card on return to work, give GP visit card

The full list of savings measures is set out below.

“The Director General of the Health Services will now draft the 2014 Service Plan for the health services on the basis of this budget”, the Minister continued. “The need to ensure patient safety is recognised throughout the health services and it continues to be our shared key priority”.

“By implementing our programme of reform and by managing and controlling our budgets, we have managed to deliver high quality healthcare and meet increasing demands with less funding and less staff”, the Minister concluded. “Together with my colleagues, Minister Lynch and Minister White we have been working hard to achieve our shared goals. I commend the staff of the health services for their dedication and commitment. No one is in any doubt but that 2014 will be a challenging year but if we continue to implement reform and manage our costs, we will achieve our shared goal – a health service fit for our children and their children”.

View Department of Health Expenditure in 2014 and Estimates in 2014

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ENDS

Notes for Editors

 

Details of Savings Measures

 

Children’s GP services

  • Approximately 240,000 children aged 5 and under will be able to access a GP service without paying a fee at the point of use. This is about 57% of the total population of children in this age group. 43% are already covered by the medical card or GP visit card.
  • Almost half of the population (49%) will have access to GP services, without charges by the end of next year, as part of progress towards a universal GP service under UHI.
  • This measure requires primary legislation and will be fully set up and implemented during 2014. Estimated cost is €37 million.

Reducing income thresholds for medical cards for the over 70s

  • This measure reduces the income thresholds for a single person aged 70 or over to €500 per week and for a couple aged over 70 to €900 a week.
  • A single person aged 70 or over with income up to €700 per week will continue to have access to GP services without charges. A couple aged 70 years or over with income up to €1,400 per week will continue to have access to GP services without charges.
  • It is estimated that, as a result of this measure, 35,000 people will now qualify for a GP visit card instead of a medical card and that 97% of the over 70s will continue to be able to access GP services without charges.
  • Estimated savings in 2014 are €25 million. It will require legislation and it is planned to have that legislation in place by the end of the year/early 2014, with reassessments beginning after the legislation is in place.

What changes are being made to prescription charges?

  • Currently, people with a medical card pay a prescription charge of €1. 50 per item subject to a cap of €19.50 per month per person or family. The proposed new rate is €2.50 per prescribed item with a monthly cap of €25.00 per person or family. This increase is expected to raise a further €43 million per annum.
  • Charges are set by regulations made by the Minister for Health with the consent of the Minister for Public Expenditure and Reform. It is envisaged that the new rate will take effect on 1 December 2013.
  • The prescription charge is intended to address rising costs in the medical card scheme and to influence to some degree demand and prescribing patterns. The number of items dispensed under the scheme is projected to be 65 million in 2013.

Medical Cards Probity

  • Savings in the region of €113 million in 2014 have been identified by improving the accuracy of the medical card system.
  • Apart from the change to income thresholds for the over 70s and return-to-work, there are no other changes to the eligibility criteria for medical cards. This measure is about ensuring that those who are entitled to medical cards continue to hold them and that those who are not entitled to medical cards do not.

Medical Cards – return to work arrangements

  • Currently, a person who returns to work after a period of unemployment retains their medical card for 3 years, regardless of income. Under this measure, a person that has returned to work after a period of unemployment will retain a GP visit card for 3 years, irrespective of their level of income.
  • The measure will not be retrospective in that the HSE will not be seeking refund of costs of any services provided to people who retained a medical card after returning to employment. However, the current circumstances of a person who has returned to work will determine whether they qualify for a medical card or a GP card.
  • Estimated savings are €11 million and it is estimated that around 22,000 people will be affected. The measure requires legislation and it is planned to phase it in during 2014.

Private Patient charges in public hospitals

  • The Health (Amendment) Act 2013 introduced a new system of charges for private in-patients using public hospital facilities, which will take effect from 1 January 2014.
  • Up until now, the private maintenance charges did not apply to about 40% of private in-patient bed-days in public hospitals.
  • This represented a significant subsidy given by the public hospitals to private health insurers. A significant subsidy will continue even after the introduction of these new charges.
  • We have budgeted for an additional €30 million in income for public hospitals to be generated in 2014. It is not felt that it will have a significant impact on a private health insurance industry that annually pays claims in the region of €2 billion annually.

Generic Substitution and Reference Pricing

  • Additional savings of €50 million are expected in 2014 as a result of the implementation of generic substitution and reference pricing following the commencement of the Health (Pricing and Supply of Medical Goods) Act 2013.
  • Generic substitution and reference pricing is being implemented on a phased basis. Priority is being given to medicines which will achieve the greatest savings. Initially 20 active substances, which equate to approximately 1,500 individual medicines (and account for 57% of the overall ingredient cost of off-patent drugs) will be reviewed.
  • The first List of Interchangeable Medicines, containing groups of atorvastatin products, was published in August 2013. The HSE has set the reference price for these products resulting in price reductions of 70% below May 2013 prices. The atorvastatin reference prices will be implemented from 1st November.

IPHA/APMI Agreement

  • Additional savings of €28 million are expected in 2014 as a result of agreements on price reductions negotiated by the Department of Health and HSE in 2012 with the Irish Pharmaceutical Healthcare Association (IPHA) representing the research-based drugs industry and the Association of Pharmaceutical Manufacturers in Ireland (APMI) representing the generic drugs industry. This is in addition to savings in excess of €120 million in 2013.

Delisting products from GMS and Community Drugs Schemes

  • Provision is made for €10 million savings arising from the removal of products from the Reimbursement List. The HSE will now consider products for review in compliance with the provisions of the Health (Pricing and Supply of Medical Goods) Act 2013

Full year effect of FEMPI fee reductions

  • 2014 saving arising from FEMPI reductions implemented in July 2013 is €37 million.

Nurse Bank Initiative

  • This measure will improve the continuity of nurse-provided care and is intended to contribute towards savings in expenditure on agency nurse staffing in the health service. Details of this scheme will be worked out in conjunction with DPER and the HSE.

Haddington Road Agreement (HRA)

  • Since 2010, and despite substantial reductions in funding and staff numbers, the health workforce has made a major contribution to sustaining services. This has been achieved through the provisions of the Croke Park Agreement and, from July of this year, the HRA. Staff have accepted significant reductions in income and increased working hours but nonetheless have adopted new work practices and signed up to reforms in how service are organised and delivered.
  • A key focus of the HRA is the effective harnessing of the additional working hours to which staff are committed under the terms of the Agreement. The HSE is required to drive this right across the system so that the savings in overtime, agency and staff headcount which this additional capacity facilitates are maximised.
  • Significant savings are also to be achieved through the nurse/midwife Graduate programme and the intern scheme for support staff, the terms of which were agreed at Haddington Road. The staff taken on under these schemes are being deployed in a focused way so that savings, particularly in expensive agency arrangements, are maximised.

Health service staff numbers

  • A net reduction of 2,600 from the current level of 100,600 WTE has been targeted by the end of 2014. This is challenging and it will require substantial efforts on the part of all health service staff to sustain and protect services despite the necessary reduction.
  • Natural attrition and retirements will contribute towards achieving the reduction, together with targeted initiatives such as further incentivised career breaks and targeted voluntary redundancies.

Charge on Retailers for the Sale of Tobacco

  • Currently under Irish Tobacco Control Legislation a retailer wishing to sell tobacco products must register with the HSE and be placed on the Retail Register for the sale of tobacco products. Under the Public Health (Tobacco) Act 2002 as amended the HSE may charge a fee as may be determined by the Minister for Health. To date this has been a once-off fee of €50.
  • The Government proposes to increase the Retail Register fee during 2014 in the context of legislation to provide for the licensing of the sale of tobacco products as outlined in Tobacco Free Ireland which was approved by Government in July of this year.

Fair Deal

  • There are no changes to Fair Deal in Budget 2014. This savings measure recognises the changes made last year, as part of Budget 2013, and represent the full year value of those savings.
  • As part of Budget 2013, legislation was introduced to provide for an increase in the asset contribution from 5% to 7.5% capped at 22.5% after three years in the case of the principal private residence and the entitlement for State support to be backdated will be abolished. Approvals will continue to be granted and the position will be kept under constant review.

Mental Health Services

  • Budget 2014 provides for a further €20 million ringfenced for mental health services. This will bring to €90 million the total investment ringfenced by the Government in mental health services.
  • The additional €20m in 2014 will enable the HSE to continue to develop and modernise our mental health services in line with the recommendations of A Vision for Change and will allow for the recruitment of additional staff to further enhance our –
    • Adult Community Mental Health Teams
    • Child and Adolescent Mental Health Teams
    • Specialist Community Mental Health Teams
    • Work on suicide prevention initiatives
    • Further details will be outlined later this month when the Minister approves the HSE National Service Plan for 2014.