Ireland’s health services at inflection point

Former Irish health chief, Prof. Martin Connor believes our health system may be at an inflection point where a combination of internal and contextual factors are progressively limiting its leadership’s room for manoeuvre to safely deliver the final phase of fiscal consolidation envisaged by published government spending plans to 2016.  Maureen Browne reports.

Martin Connor
Prof. Martin Connor

In a report for the HSE, a former Irish health chief has argued that our health system may be at an inflection point where a combination of internal and contextual factors are progressively limiting its leadership’s room for manoeuvre to safely deliver the final phase of fiscal consolidation envisaged by published government spending plans to 2016.

Prof. Martin Connor, former head of the Department of Health Special Delivery Unit (SDU) concluded that a change in the overall direction of government spending policy and decision making on the health service was necessary to avoid a further, and unacceptable, decline in services to citizens. He proposed a Commission on Health Spending should be established, to consider all and any changes to the system.

Prof. Connor, is now Executive Director of the Centre for Health Innovation, a collaboration venture between Griffith University and the Gold Coast Hospital and Health Service in Queensland, Australia.

We’ve created the same environment that existed in Mid-Staffordshire, but instead of doing it on a hospital by hospital basis we’ve done it on a national basis.

The report – to review the overall progress on reform and provide recommendations for areas the HSE could improve the implementation of reform or its operational performance – was commissioned by the Director General of the HSE, Mr. Tony O’Brien, last March and the interviews and analysis that underpin it took place in May and June 2014.

Prof. Connor said that one of the more sobering comments cited from the interviews was as follows: “we’ve created the same environment that existed in Mid-Staffordshire, but instead of doing it on a hospital by hospital basis we’ve done it on a national basis, because we have said the only thing that really matters in discussion is budget, money and head count… this is austerity…”

He said that the logic of the Irish reform programme “as presently proposed is absolutely right. The moves to improve performance and accountability, to create a more locally responsive and autonomous care delivery system and ultimately to reform the revenue and reimbursement system through Universal Health Insurance were both ethically correct and consistent with international best practice.

The next moves required a whole of government response – including, but not limited to, a review of the spending framework.”

He believes that to arrive at the ultimate strategic goal of UHI, the health service must dramatically reduce its waiting times, transform its financial capability and performance, and succeed in creating new delivery organisations that can function as independent care Trusts.

He said Ireland appeared to have reduced health spending more rapidly and to a greater extent than its international peers and the health programme appeared to have been disproportionately reduced compared to social protection and education and skills for a number of years, with allocations now ‘locked in’ to similar differential changes making the current proportional allocations de facto structural.

“Between 2009 and 2013, the reduction in vote to all departments by 13.5% over the period and the reduction of nearly 10% in health contrasts with a 5% reduction in education and skills, a 4.75% reduction in the budget of the finance ministries, and less than 1% reduction in social protection. The social protection budget in 2013 is now €2.5bn higher than it was in 2008, whereas the health budget is cumulatively more than €1.5bn below its 2008 level – a cumulative and annually recurrent redistribution of over €4bn between the programmes.”

He said the government’s present expenditure strategy was not sensitive to the risks associated with the rapid and continuing reduction in health budgets, and there were underdeveloped processes in place to monitor and check these risks.

The headcount reduction target should be removed, which would enable local teams to be ‘rebased’ with permanent staff.

The self-avowedly ‘top down’ budget setting process has resulted in cuts being applied to the health budget in an arbitrary fashion – sometimes with no identified savings programme in place. It was not clear whether the annual ‘spending crisis’ in health was a function of poor financial control or under-resourcing, and little work had been done to establish which was the case.

The combination of legislated programmes, political direction and policy mandates had significantly reduced the leadership scope for manoeuvre and this process was continuing with the recent response to the medical card problem.

There was evidence that the requirement to reduce headcount was now running directly counter to the requirement to deliver savings, creating a contradiction in government policy and there was evidence that the very high levels of agency driven by the headcount reductions in some teams was having a direct detrimental impact on the ability to deliver high quality care.

There was also evidence that national decision making was hampering elements of the reform programme, significantly increasing the risks to quality and financial performance through delaying the establishment of effective leadership.

Evidence was there that performance and productivity gains of recent years had now run their course, that sustained budget reductions had moved services from delivering ‘more for less’ to ‘less for less’. “There are suggestions in the evidence that performance may now be deteriorating, and that this could accelerate.”

There had been no effective national debate on the costs of reform itself or what the scope of a national reform programme should be, nor agreement on how this should be organised.

Prof. Connor made the following recommendations:

  • The 2014 budget allocation for health needed to be ameliorated such that further damaging effects on safety, quality or public confidence were avoided.
  • Even if the overall fiscal framework remained sacrosanct, resource allocations within it were not. The government should commit to an end to real terms reductions in health budgets on the grounds that the risks of continuing down this path were simply too great. There are three methods that could be adopted: (1) Pursue an ‘at least inflation’ increase, (2) Target a per cent of GDP to be reserved for health, (3) Undertake a cross-party bottom up review of health spending to establish a realistic minimal baseline from which a multi-year spending strategy could be developed.
  • Effective Hospital Group and CHO leadership must be recruited and appointed without delay on a ‘whatever means necessary’ basis.
  • The government should consider how to ensure whole of government alignment around critical decisions associated with health reform, ‘fair play’ during the resource allocation process and a mechanism to escalate legitimate concerns about the impact of resourcing decisions that were not handled appropriately during the normal inter-departmental process.
  • The headcount reduction target should be removed. This would enable local teams to be ‘rebased’ with permanent staff, a process that would both reduce cost and improve quality.
  • A ‘National Health Renewal’ Programme should be scoped and initiated and independent sector strategic partners should be identified that could implement national systems for care and control. Innovative funding should be sought for this programme over and above the operating budgets for health and the programmes should be time-limited with a maximum of five years such that when the programme wound up, the service had a new capability to deliver higher quality at lower cost.
  • A Commission on Health Spending – ideally with cross party support – should be established, to consider all and any changes to the system (even those that might require legislative change), with professional representation, to review safe and effective means by which costs can be reduced on the journey towards UHI.
  • The 30% reduction in salary for new consultants should be reviewed with a view to suspending the measure on the basis that it threatened the ability of organisations to sustain services.