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Home > Select Sub-Committee on Health debate. Estimates for public services 2014.

[Oireachtas] Select Sub-Committee on Health debate. Estimates for public services 2014. (31 Jan 2014)

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Vote 38 - Department of Health (Revised)
Vote 39 - Health Service Executive (Revised) 

Acting Chairman (Deputy Dan Neville): The Dáil has referred to following Revised Estimates to the select committee for consideration: Vote 38 - Office of the Minister for Health; and Vote 39 - Office of the Health Service Executive. I welcome the Minister for Health, Deputy James Reilly, and his officials. The purpose of the meeting is to consider the Revised Estimates and the supplementary performance information on the outputs and impacts on programme expenditure. A draft timetable for the meeting has been circulated. Is it agreed to? Agreed. A departmental briefing note on each Vote was circulated to members. I call on the Minister to make his opening statement.
Minister for Health (Deputy James Reilly): I am very pleased to have the opportunity to address the select committee on the Revised Estimates for 2014 for my Department - Vote 38 - and the Health Service Executive - Vote 39. Copies of the Revised Estimates and briefing documents on the two Votes by subhead have been provided for Deputies. As they are aware, the annual Estimates are being reconfigured along programme lines to ensure greater transparency in Government expenditure. The Department of Health is working towards the development of programme budgeting and changing the structure of the health Votes to reflect this. This will take some time, however, as the financial systems in the HSE will have to be adapted to allow for it in the context of the financial reform programme under way. In the interim, the appendices to the Revised Estimates for the health Votes have been constructed along programme lines, based on the HSE's national service plan, to provide a high level programme breakdown of health expenditure. In addition, two programme subheads, concerning the PCRS and long-term residential care, are now included in the Revised Estimates Volume. The third programme for which information had been extracted - the children and families directorate - is now funded through the Department of Children and Youth Affairs following the establishment of the Child and Family Agency.

Before dealing with the Estimates in detail, I will make a few general observations about the overall budgetary situation facing the health sector. As members of the committee are fully aware, the Government is committed to tackling Ireland's very serious deficit problem. Current health expenditure in 2014 will account for 27% of gross current expenditure, meaning that fiscal realignment must, of necessity, affect health sector spending. The challenges facing the health system at a time of growing demand mean that the Government must press ahead with major health sector reform. I will continue to deliver the Government's programme of health reform throughout the course of the year and I am pleased that the HSE has set the advancement and implementation of the reforms at the centre of its planning for 2014, including but not limited to phased implementation of a money follows the patient funding system in hospitals; the transition to hospital groups, including appointment of new group CEOs, where required; the establishment of new community areas with associated governance and organisational arrangements; and the establishment of a patient safety agency.

In 2013 we published Healthy Ireland, the strategy for improving the health of Irish people and enhancing their health and well-being. It is an ambitious strategy that aims to embed health and well-being across public policy and services. It sets out a whole-of-government and cross-sectoral approach to address the demands placed on health and social care services from the growing incidence of chronic illnesses, together with the challenges presented by an ageing population. Chronic diseases such as cancer, cardiovascular and chronic respiratory disease and diabetes are the leading causes of mortality and account for over three quarters of all deaths in Ireland. The risk factors associated with the increased prevalence of chronic diseases such as obesity, a lack of exercise, unhealthy eating patterns, the over-consumption of alcohol and the use of tobacco products are generally preventable. Healthy Ireland is critical in enabling the required shift in emphasis towards health prevention, promotion and improvement in the years ahead. The 2013 edition of Health at a Glance, published by the OECD, shows that Ireland continues to make substantial headway in improving health outcomes. Mortality due to cancer fell by 21%, ischaemic heart disease by 59% and cerebrovascular disease by 54% between 1990 and 2012 and in all three cases the rates of improvement in Ireland were above the OECD average. Life expectancy in Ireland has increased by a full four years since 2000 to reach 80.6 today, again above the OECD average.

I will now address the Estimates for health in some detail. The Revised Estimates for 2014 for the health group of Votes provides for gross expenditure of €13.164 billion for health services. Of this amount, some €12.774 billion is for current funding and €390 million for capital funding. A further €544 million, that is, €537 million in current funding and €7 million in capital funding, for child and family services is funded through the newly established Child and Family Agency under the aegis of the Minister for Children and Youth Affairs. Significant cost extraction is required, with €619 million in savings to be achieved in 2014. The primary aim in targeting savings is to cut the cost of services, not the services. This will be achieved largely through efficiencies and reconfiguration under the Croke Park and Haddington Road agreements, new charging arrangements for private patients in public hospitals and curtailing the growing cost of pharmaceuticals. The required savings have been incorporated in the HSE's service plan published on 18 December 2013 and are recognised in the Revised Estimates.

The funding for Vote 38 provides for gross expenditure of €206 million. This comprises €16 million in capital funding and €190 million for current expenditure. This represents a 6% reduction on the provisional outturn for 2013 and a 17% reduction on the 2013 budget.  All health agencies funded by my Department were required to achieve further efficiency savings this year, with the Department's administrative budget being reduced in line with the moratorium on recruitment and the provision for legal costs and statutory inquiries also reduced. The provision for the National Treatment Purchase Fund has also been significantly reduced, pending consideration of its future role in the context of the structural reforms set out in Future Health.

  In addition to the funding reduction, some €22 million was transferred from the Department's Vote to the HSE in the context of the drugs initiative. The funding will be used to support approximately 220 drugs task force projects, in respect of which the HSE has acted as channel of funding for a number of years. The HSE also provides funding for a significant number of the same drugs projects from its own Vote. The HSE-funded projects are subject to the standard governance and monitoring procedures of the HSE. Separate reporting, accountability and monitoring arrangements had applied to projects funded by the Department through the channel of funding arrangement. Allocations to drugs task forces will continue to be based on drugs task force recommendations and focus on tackling the drugs problem. The transfer of operational responsibility for the funding administration of drugs task force projects to the HSE is a key priority in the HSE primary care operational plan for 2014. Some €7.4 million remains in the Department of Health's Vote for 2014, €6.6 million of which is in respect of expenditure on 100 community drugs projects. The remainder funds the activities of the National Advisory Committee on Drugs and Alcohol, the Family Support Network and the citywide drugs crisis campaign which represents the community sector.

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