Speech by Minister Reilly at the Master Class on Driving Change and Achieving Value in Healthcare

Good evening ladies and gentlemen.

May I begin by thanking the Director General of the HSE, Tony O’Brien for inviting me to speak and commending him and the other conference organisers on putting together such an impressive list of speakers, both for today and tomorrow.

In particular, I’d like to welcome Professor Kaplan and our other speakers from abroad. I’m sure you’d agree that the Professor’s insights have been both interesting and informative.

Challenges Facing the Health Service

The master class theme, ‘driving change and achieving value-based healthcare’ could not be more timely or appropriate given the unprecedented challenges visited upon the health service by the extreme economic difficulties faced by this country over recent years.

The health budget has been cut by over €3 billion since 2008 and the numbers working in the health service have been dramatically reduced.

At the same time the system has had cope with an 8% increase in the overall population and a 20% increase in the number of people aged 65 or over.

In addition, lower incomes and higher levels of unemployment have resulted in the highest number of people with medical cards in the history of the state.

In short, an extraordinarily difficult situation. There is no way round the need to cut costs because we simply can’t keep on spending money we don’t have. However all efforts have been focussed on cutting the cost not the quality of the service.

Accelerating the pace of reforms that will deliver a more efficient health service both in terms of cost and patient focus is the key to success. And that is where the focus must continue to rest.

It is a difficult and complex objective and not one that can be delivered either easily or speedily. But progress is being made and significant improvements have been achieved in terms of productivity and the range of services delivered.

Substantive headway has also been made in terms of improving health outcomes. Since 1990 mortality due to cancer has fallen by 21%, ischemic heart disease by 59% and cerebrovascular disease by 54%. Life expectancy in Ireland has increased by a full four years since 2000 and now stands at 80.6 years a figure above the OECD average.

None of these achievements or reforms have been easy and some of them have involved difficult decisions such as cutting staff pay and introducing the pension levy in order to avoid cutting patient services.

Therefore I particularly want to take this opportunity to acknowledge the continued hard work and commitment of the people in this audience as well as the staff across the health and social care services in maintaining and in many cases improving the range of services provided to the public throughout all of these, sometimes personally, difficult times.

The Need for Value

While the challenges faced by our health service may have been of a greater scale than most, the issue of rising costs and the need for value is common to all countries.

Demand for health services is increasing year on year and this in turn will continue to push cost upwards.

The drivers of demand and cost include an ageing population, the increase in chronic diseases and advances in medical technology.

In light of these pressures, the need for fundamental reform of the way we deliver healthcare is unquestionable. It is no longer possible to tinker round the edges of the existing system. We must implement large-scale change that delivers fundamental reform.

The Government set out its plan for this reform in ‘Future Health – A Strategic Framework for Reform 2012-2015’. The aim of this plan is to deliver a single-tier health service, supported by Universal Health Insurance (UHI), where access to healthcare is based on need and not ability to pay.

The recent publication of the White Paper on Universal Health Insurance attests to the Government’s determination to deliver this radical reform programme.

The White Paper provides detail on the UHI model for Ireland, the process for determining the future health service framework, the financing mechanisms for UHI, an update on progress in relation to the major building blocks for UHI as well as the key steps on the journey to UHI.

The Government is keen to engage with the public and other stakeholders on this major policy reform of the health service. For this reason, the publication of the White Paper also marked the initiation by my Department of a major consultation process with a call for written submissions from the public and key stakeholders on the overall policy approach set out in the White Paper.

I would urge all those present here today to use this opportunity to make their views known and to participate in this process which will last until the 28th May. More details in relation to the process are set out on the Department’s website.

I’m glad to say we have also built up a great deal of momentum on a number of other aspects of the reform process. I would like to take this opportunity to highlight some of them.

Firstly Hospital Groups and Trusts. A central part of the planned reform of our hospital system is the development of independent trusts, comprising a number of hospitals operating as a single cohesive unit, each with their own governance and management.

The reform of hospital services is designed to achieve three main goals:

• To deliver more responsive and equitable access to vital services for all patients;

• To organise our public hospitals into more efficient and accountable entities which can deliver better patient care for less cost; and

• To ensure that smaller hospitals continue to play a key role in the delivery of health services.

Following the publication of the Hospital Groups and Smaller Hospital Framework reports, seven Hospital Groups have been established as a first step towards trusts.

Work is now focused on bringing the hospitals together to form single cohesive entities.

As part of the process of forming these new entities, Hospital Groups must develop a Strategic Plan. In general terms, the strategic plans will describe:

• how they will provide more efficient and effective patient services;

• how they will reorganise these services to provide optimal care to the populations they serve; and

• how they will achieve maximum integration and synergy with other Groups and all other health services, particularly primary care and community based services.

While it is intended that Hospital Groups will manage their own affairs and operate with as much autonomy as their administrative status allows, it is essential that a coherent approach is taken to progressing the rationalisation and reconfiguration of services so that we achieve the optimal hospital service nationally.

With this in mind, my Department has committed to the development of an overarching framework to provide national direction in this regard.

In order to assist with this process, I have established a Strategic Advisory Group to provide objective advice and expertise to my Department, the HSE, hospital groups and to me as Minister.

The Strategic Advisory Group will ensure that international best practice informs the implementation of hospital groups, particularly in relation to developing trends in acute healthcare service provision and governance.

Another key building block for UHI is the implementation of a new, more efficient system for funding care.

In this regard, I am happy to report that Phase 1 of implementation of the new ‘Money Follows the Patient’ funding system for acute care commenced in line with the target of January this year.

‘Money Follows the Patient’ involves moving away from inefficient block grant budgets to a new system where hospitals are paid for the actual level of activity undertaken.

As such, hospitals will be funded based on the quantity and quality of the services they deliver to patients. They will be liberated, subject to overall budgetary ceilings, to pursue the most cost-effective means of achieving this standard of performance.

However, as with all aspects of healthcare, budgetary discipline is essential and this will be delivered through the use of fixed budgets for ‘Money Follows the Patient activity.

In short, the new funding system is intended to:

• ensure a fairer system of resource allocation where hospitals are paid for the quality care they deliver,

• drive efficiency in the provision of high quality hospital services,

• increase transparency in the provision of hospital services, and

• ultimately, support the move to an equitable, single-tier universal health insurance system where every patient is insured and has their care financed on the same basis.

A phased approach to implementation is being applied in order to minimise the risks associated with changing the funding model and ensure that hospital finances are not destabilised.

Subsequent phases of implementation will lead to more hospital activity, such as outpatient services, being funded on a ‘Money Follows the Patient’ basis ahead of an expansion to other service areas.

Just as important as the focus on the acute hospital services is the need to ensure that the wide range of non-acute services are also fit for purpose, particularly primary care and those involving the care of older people, people with a disability and people with a mental illness

For this reason, in line with a commitment in Future Health, the HSE has recently completed a detailed review of primary and social care services. This review proposes revised structures to facilitate delivery of integrated and person-centred care across the non-acute services and the acute hospital system.

I have received the HSE’s report and I intend to bring proposals regarding the reorganisation of primary and social care services to Government shortly.

And last but by no means least, since becoming Minister for Health, I have repeatedly said that my primary concern is patient safety and putting the patient at the heart of what we do.

I’m therefore particularly encouraged to see that one of the topics for discussion tomorrow is titled “Learning from the Experience of the Mid-Staffordshire Trust”.

The findings of the Mid-Staffordshire Report and those of reports closer to home such as the Report into the Maternal Death at University Hospital Galway (UHG) and the Chief Medical Officer’s Report into Perinatal Deaths in the Midland Regional Hospital Portlaoise, remind us that we cannot be complacent about our services and our health care delivery system. We must continue to strive to ensure that patients receive the best care possible whenever and however they need to access our health and social care services.

I am confident that the recommendations of both the UHG and Portlaoise reports, which are currently in the process of implementation, will ensure that patient safety becomes and everyone’s priority and that patients will be reassured that the services they access are of the highest quality and safety. The HSE are providing my Department with monthly progress reports on the implementation of the recommendations in each report.

I might add that I have ensured that patient safety has been made a priority within the HSE’s Annual Service Plan through specific measures such as HCAIs, Medication Safety and implementation of Early Warning Score Systems. My officials meet with the HSE each month on the Service Plan and patient safety is a standing item on that agenda.

My Department is also continuing to develop proposals on the organisational structures needed to improve patient safety in our health system including establishment of the Patient Safety Agency. I’m glad to say that the HSE is expected to commence the process of recruiting an interim Chief Executive Officer for the new Agency shortly.

All of the measures and initiatives I’ve spoken about today are just part of the mammoth reform task underway. I believe that it is only through this fundamental reform of our health service that we can drive value in healthcare, ensure sustainability into the future and continue to make improvements that will benefit our nation’s citizens.

None of this will be possible without the hard work and commitment of you and your colleagues. I thank you sincerely for all you have done to date and ask for your continued support as we tackle the challenges that still lie ahead.

Finally, I would like to again thank all of the speakers for their contributions and you all for attending. I am sure that the knowledge gained and information shared here today and tomorrow will help us to deliver a health service that we can all be proud of.

Thank you.

Further information on Healthcare Leaders Masterclass 2014 is available here