Speech by Minister for Health Leo Varadkar T.D. at the Institute of Chartered Accountants 5th November 2015

I want to begin by thanking the Institute for the invitation to address you this morning on the subject of health reform.

Everyone, no matter their means, at some point in their life, and some on a number of occasions, interacts with the health service and so a well-functioning health service is ultimately a matter of importance for everyone.
When I became Minister for Health just 15 months ago I took on the task of trying to address some of the immediate issues facing us but also to create some space for reasoned appraisal of the strengths and weaknesses of our health service.  We have made good progress in some areas. In others it still eludes us.

I have prioritised getting important practical reforms and projects over the line, like GP care without fees for the oldest and youngest in our society on a universal basis, with no means test or sickness tests – the first concrete step to universal healthcare.

At the same time, the rules for discretionary medical cards were relaxed to take in more people with high medical costs and needs, almost 100,000 now, who would not qualify under a means test alone. And the first tentative, but concrete, steps were made on moving chronic disease management into a primary care setting through the asthma and diabetes cycles of care.
I pressed ahead with important and overdue infrastructure projects like the new National Children’s Hospital. All things going to plan, it will be well under construction by this time next year, as will the new National Maternity Hospital on the campus of St Vincent’s, the new National Rehabilitation Hospital and the new Forensic Mental Health campus.

There will always be important immediate priorities and issues calling for attention. In the past year, for example, I have sought to improve patient safety, ease hospital overcrowding, and reduce excessive waiting times for public patients. I have done this by getting more community and acute hospital beds opened, securing more funding for the Fair Deal nursing home support scheme, promoting system change and setting maximum permissible waiting times, resourcing and enforcing them.

Clearly more needs to be done and you cannot put off necessary immediate actions until you have reformed the service as a whole. But, nor can one lose sight of the need to develop and drive forward a programme of wide ranging reform. For that reason, alongside the immediate work I have sought to map out a vision for the future – practical, patient centered, politically deliverable and affordable – better and visibly so.

I have acknowledged the many shortcomings and failings in our health service and haven’t run away from them. But I have also defended our health service and our staff when they come under relentless and unfair attack, or are subjected to unbalanced criticism and scrutiny.
Advances in Healthcare
We face many challenges in the health service, particularly in terms of access. But lots of things in our health service are going well or are even getting better. It has become fashionable for some, both inside and outside the health service, to constantly portray the service in dark terms, in a state of constant crisis or even collapse.

Of course we have enormous difficulties but we have also made advances in many areas and we should not lose sight of that.

These include:
·    improving life expectancy;
·    less expensive medicines for patients and taxpayers;
·    improving cancer survival;
·    reduced deaths and disability from stroke;
·    advanced paramedics at the scene of serious emergencies, providing care long before the patient gets to hospital;
·    an air ambulance to take people from more remote areas to specialist centres in time; and
·    the lowest MRSA infection rates reported in many years.

Our maternity services have come in for much criticism, much warranted, much sensationalised. Nonetheless, we continue to have lower maternal and peri-natal mortality rates and fewer low birth weight babies than the OECD average. We have more staff midwives and consultants than ever before and a new Maternity Strategy is being developed.
And although we struggle to recruit and retain staff, the number of doctors registered with the Medical Council at 19,000 is now at a ten year high, the number of consultants and NCHDs employed in the public health service is at an all-time high and we have 500 more nurses on staff today than this time last year.

Anyone who follows the public debates and discourse on health, the political Punch and Judy show, would be forgiven for thinking it is otherwise. But those of us who know the health service, have worked in it and care about it, know that we have many things to be proud of, much to protect, and most importantly, much to build on.

Objective of Health Reform
Too often discussions about health have come down to funding – does the service receive a big enough allocation, are there different ways in which it can be financed and is the funding it does receive spent properly.

Discussing funding and how it might be raised in advance of deciding what sort of health service you actually want is, in my view, really a case of putting the cart before the horse.  The vision must come first. And that vision should be patient centred, about access and outcomes for patients, not a vision centred on funding models.

The vision which best meets the needs of patients in a practical and affordable manner is that of universal healthcare.

Universal health coverage is defined by the World Health Organisation as ensuring that all people can access promotive, preventative, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while ensuring that the use of these services does not expose the user to financial hardship.

As our population grows and ages the delivery of universal healthcare is no easy challenge but it is achievable. It is surely the greatest goal we have yet to achieve in our efforts to build a Just Society.

We must learn from the past and in doing so know that many of the structures and arrangements in our health services are historic artefacts or arise from ad hoc arrangements to solve particular problems at a point in time

Some of the progress we have made in health since 2011 has been slow, but some of the caution has been justified because reforms should not be rushed. That was the cause of so many of the problems back when the HSE was established in 2004 and I am determined not to repeat them.

Looking back with the benefit of hindsight we were overly ambitious back in 2011 as to how quickly change could be delivered in the Irish health service. In truth the scale of the task is without parallel in any sector of the Irish public service.

Frankly to have advanced at all during a period of unparalleled economic difficulty with severe pressure on the health budget was an achievement in itself. It gives me the confidence to believe that now, as times improve and the health budget starts to grow again, we can drive forward the reform programme. It will take time but much progress can be made over the next five years.

It will involve engagement from the whole of Government, from the wider public sector and also from the private sector and I welcome the attendance here today of people from both the public and private sectors.
In its first term this Government understandably focused on putting the public finances back in order and restoring our economy to growth thus getting 125,000 people back to work. This was achieved because of a clear cross Government focus and a cross Government focus will be required in a second term if health reform is to be successfully delivered. It needs to be as important to the next Government as exiting the bailout and restoring our sovereignty was to this one.

Foundation stones of a reformed health service
To achieve universal healthcare, we must first put in place the building blocks. If a new service is to work, it will have to be built on solid foundations. This will require four foundation stones as I see it:
(1) Healthy Ireland and the public health agenda;
(2) sufficient capacity to satisfy unmet demand;
(3) the expansion and development of primary and social care; and
(4) reformed structures, ICT and financial systems.
Foundation Stone – Healthy Ireland
When considering vision and policy for the future, I believe we should always start with Healthy Ireland, the Government-led programme to improve our personal and public health. It’s the best way to ensure that we all live longer and healthier lives and it’s the best way to tackle rising health costs in the long term.
We’ve made great progress on smoking and now we need a similar focus on alcohol misuse, obesity and physical inactivity. Just last week I launched our sexual health strategy and look forward to publishing in the next few weeks our first ever public health legislation on alcohol.
For too long health and wellness programmes have been seen as important but not critical and have therefore too often been overlooked when additional resources were being allocated.
We need to change that by making a commitment to increase the total budget for Healthy Ireland and HSE Health and Wellbeing programme every year by more than the average increase in health spending.

Important evidence based initiatives including the extension of screening and the childhood vaccination programme cannot wait till some point in the future when every immediate issue has first been dealt with. The same applies to programmes like smoking cessation and other public health campaigns and programmes.

The required additional funding could be sourced by ring-fencing the proceeds of a tax on sugar sweetened drinks or excise on cigarettes.

Foundation Stone – Sufficient capacity to satisfy unmet demand
With the current staffing levels of specialist doctors, GPs, midwives and specialist nurses, allied health care professionals, critical care beds and other capacity, no system of universal healthcare will be able to deal with unmet demand.

We need to get a clear fix on the workforce requirements across the health service now and into the future. I have initiated a process to prepare a clear plan within 12 months and then we need to work to fund it and implement over a number of years.

We also need to re-assess the number of acute hospital beds we need.  OECD statistics indicate that the number of hospital beds we have is low relative to other countries but this does not take into account private hospitals.  OECD numbers also indicate that we use our public hospital beds relatively efficiently with a short average length of stay.

No matter how much you reform the service, unless you have the necessary resources in place you will always have long waiting times and overcrowding. An under resourced system of universal healthcare which puts everyone on a lengthy waiting list – albeit everyone waiting for the same length of time – won’t have much appeal.
At the same time, no matter how you much money you have, it will never be enough if you don’t spend it well and spend it efficiently – hence the need for the organisational and financial reforms which we are undertaking.
On a positive note, in 2015 we secured the first Budget increase in seven years and secured a further increase in the recent Budget. The increases have allowed the health service to take on or regularise 4,000 more staff and fund new treatment programmes. Nonetheless, we are still operating with about 10,000 fewer staff than was the case at the peak and since then our population has grown and aged further.
Based on a clear vision and a solid commitment to adequate resources we can put in place the foundation stones of a reformed service.

Foundation Stone – enhancing and developing primary and social care
The key challenge for Government is to find a way to deliver universal healthcare at a cost that is affordable and sustainable for society.
This cannot be achieved without refocusing our health service from a hospital-led model of care and towards a more preventative and less acute model that is grounded in more comprehensive and developed primary and social care.

We need to continue to strengthen and enhance primary care provision in Ireland through the ongoing development of comprehensive chronic disease management programmes. We are already showing form, with better asthma care written into the new under six contract, and a new diabetes contract for GPs, alongside better access to ultrasound and a GP minor surgery pilot. Nearly 14,000 children have registered for the Asthma Cycle of Care and 37,000 patients for the Diabetes Cycle of Care.

I’m looking forward to concluding discussions with the IMO on further extending the scope of – and access to – general practice in the New Year. As part of the new contract I would like to see more GPs encouraged to provide expanded services like chronic disease management, minor procedures and first-line investigations like 24 hour blood pressure and cardiac monitoring. However, I would not like GPs to become de facto public servants, entirely dependent on the State for their income. Their autonomy and business-orientated approach is one of the things that makes General Practice work.

As part of the negotiation with GPs the State will seek to continue the implementation of GP care without fees on a phased basis, with the next phase bringing in all children up to twelve years of age. Our objective remains to extend GP care without fees to all children in the next few years.

In July this year we took  the first step in realising timely access to safe and quality healthcare for everyone with the extension of GP services without fees to 270,000 children under the age of six, and an enhanced and better-funded service for 150,000 children under six who already have a medical or doctor visit card. The second step came in August with the inclusion of another 36,000 people aged 70 or older.

Of course, we should never make the mistake of thinking that primary care is just about GPs. Dentists, therapists, nurses, community midwives and psychologists play an increasingly important role. We identified, for example, in the recent Budget the importance of prioritising resources for speech and language therapy.

Community Pharmacists are enthusiastic to do more, to manage patients as well as dispense prescriptions, and we should help them to do more – to manage minor ailments, administer more vaccines, and do more medicine management and monitoring.

We need to develop social care provision so that people, especially our elderly, can stay in their homes or supported housing with care for longer rather than in nursing homes.

Modern technology will allow more people to stay at home for longer and nursing homes should enhance the level of nursing and medical care they provide to avoid unnecessary admissions to hospital.

Foundation Stone – reformed structures, ICT and financial systems
To deliver reform it is necessary to be clear about the architecture one is seeking to build.

The HSE is too large and too remote from the frontline. It has been successful in some of its national functions; models of care, national clinical programmes and the National Ambulance Service. However the centralised command and control model is not conducive to good management of hospitals or community services. It makes accountability almost impossible. It will have to be dismantled overtime replaced by new structures that will devolve more decision making to the level of the hospital or community and ensure greater accountability.

International evidence demonstrates that well designed commissioning approaches and payment systems may have the potential to increase transparency, drive efficiency and encourage the provision of quality, integrated care at the lowest level of cost.

A new Health Commission could be established based upon a re-shaping of existing responsibilities and expertise in the HSE and the National Treatment Purchase Fund, but also crucially with input from new people who bring additional skills. The Commission would purchase services from Hospital Groups and Community Health organisations.

The development of commissioning will require the establishment of the Healthcare Pricing Office on a statutory footing, independent of commissioners and service providers, to develop objective pricing mechanisms and determine standard national prices.

It will also require the extension of coding and costing systems beyond the hospital walls to allow, where it is appropriate, more to be done in primary and social care settings.

Most important of all it will be necessary to drive the introduction of Activity-Based Funding (ABF) for public patients in public hospitals, while also developing a complementary system of case-based charging for private patients in public hospitals. This means money will follow the patient or service user and hospitals and other healthcare providers will be funded for the work they do and the outcomes they deliver, rather than being funded on the basis of historic budgets.

It will mean that hospitals and community healthcare organisations are incentivised and paid more to do more work, whether that involves more hip operations, more home help hours or more dermatology clinics.

In my view linking spending to activity is the biggest single reform that will make the most difference for the better in our health service, from the point of view of patients and taxpayers. Much work has already been undertaken and more can and will be done over the next five years on this crucial initiative.

The commissioning approach will only work if the new health service is capable of responding to the introduction of stronger incentives. A major reorganisation of healthcare delivery structures is, therefore, underway with the aim of strengthening local responsibility, accountability and responsiveness.

This involves the transformation of all HSE and voluntary hospitals into seven major Hospital Groups, each of which will develop a strategic plan describing how they will operate as a cohesive entity which delivers safe, high quality and cost effective healthcare.

I am strongly of the view that hospital groups should be truly autonomous to the extent that any body or organisation funded mainly by public money can be. The Hospital Groups, or Trusts if you prefer, should also have the authority and freedom to make collective agreements, manage their own assets and payroll, negotiate independent contracts to recruit managers and specialists outside of the constraints of public sector rules in the way semi-state companies do now.

With authority will also come accountability. Where hospitals consistently under perform in terms of clinical outcomes, patient experience and financial management, it should be open to the provider to transfer management of the hospital for a period of time to a private provider by means of a concession or management contract.

It’s certainly not the case that all hospital groups have to be the same, and one size does not need to fit all.

Voluntary hospitals have made a valuable contribution to the development of health services in Ireland down the years. I value their ethos and history and where their financial affairs are in order, it is our intention to retain their boards and governance. Where earned, their autonomy will be expanded provided they fulfil contracts or service level agreements with their hospital group or trust.
Voluntary hospitals may come together to lead their hospital groups. In others, new governance arrangements will be required at group level. In some they exist already. The Groups are in place and functioning, we need to drive on with the objective of providing the Groups with a legislative base by 2018.
Service delivery reform also involves the restructuring of all health services outside the acute hospitals, i.e. primary care, social care, mental healthcare, and health and wellbeing, into nine Community Healthcare Organisations (CHOs), with the aim of providing the maximum proportion of care to people in the most appropriate settings in the communities where they live. The CHOs have been established and their development needs to be driven forward.
A crucial element in the reform programme must be investment in Information and Communications Technology (ICT). Partially as a result of past failures but also because of competing demands investment in ICT in Irish health care has fallen behind international standards and developments in the private sector, including general practice, pharmacy and private hospitals.
The recently announced Capital Plan will allow us to start catching up on ICT modernisation, including a new financial management system, facilitating the provision of important and timely information. I look forward to a close collaboration with the private sector in the development and full utilisation of this technology in the period ahead.
Patient Safety and Quality Assurance
A robust system of patient safety and quality assurance is a final vital building block of a reformed health service and in this respect I am going to prioritise a number of actions which I plan to outline in detail next week.

Funding Models
The delivery of the reform programme I have outlined today must be completed first so that the foundations are in place to change the funding model. This will allow the next Government to make a final decision on the best funding model.
While this decision could be made towards the end of the term of the next Government, I do not believe it could be implemented in term of the next Government as the reforms I have set out this morning will take at least 5 years to complete, in particular the increases in capacity and staffing.

Considerable initial work has been conducted by this Government on the costs and implications of the introduction of compulsory universal health insurance with assistance from the ESRI, KPMG and the Health Insurance Authority. The outputs of this work will be published in the next couple of weeks and I believe they will make a valuable contribution to the debate on future funding models.
Further work needs to be conducted on the costs of various models, how to meet those costs and on how best to address unmet need for health service prior to the move to a new funding model.

The work to date points to the wisdom of decision made last year to move more slowly on the health reform programme. It is unlikely that there is ever a perfect time to change funding models but the research, which is based on 2013 data, certainly points to the fact that to seek to do so during a financial crisis would have been the wrong time. Neither the Exchequer nor families would have been able to bear the considerable additional cost in terms of subsidies or increased insurance premia.

The funds for health care can be collected in various ways – from tax, from social insurance, from health insurance, or from out-of-pocket payments, or some form of combination?
There are varying systems across the world. Australia has a two-tier system a little like ours, but because access to the public hospitals is timely and the most complex and specialist centres are in public hospitals, people really only take out health insurance for hotel-type benefits, but they do so in large numbers. The Dutch system rates high on quality and cost and operates under a multi-payer compulsory private insurance regime. Germany does it differently and France differently again.
The reason their systems are relatively better than ours is because they get the other things right.
So, we need to get the other things right first before making the final leap – adequate funding and staffing, sufficient numbers of specialists, sustained investment in health and wellbeing, wider primary care, much stronger social care, autonomous statutory hospital trusts and community healthcare organisations, activity-based funding, and a health commission with a purchaser/provider split.

I started by pointing out how the quality of the healthcare service is a matter of interest to everyone at some point in their life’s. A reformed health service providing universal healthcare is not impossible. It just needs to be approached with determination, over a sensible period of time and on the basis of a realistic vision. In the next five years, with a political mandate behind it and a strong stable economy to finance it, I believe we have a new opportunity to do exactly that.
Thank you