Reilly’ rejects HSE 2012 Service Plan: pure optics and a damage limitation exercise

Posted in Blog by saraburke on January 6, 2012

Having received a hammering from the print media over the holiday period, Minister James Reilly took a media offensive on 5  January 2012 on  RTE Radio with appearances on the Pat Kenny show and an interview with Fergal Bowers on the News at One. In my opinion, these media appearances were a combination of damage limitation and pure optics… Yesterday, on 5 January, Minister James Reilly rejected the HSE Service plan submitted to him on 24 December last. The HSE Service Plan is the most important health service document published in any year. It is the contract between the government and the HSE about what type and volume of services will be provided in the year ahead within the budget allocated.

Under legislation, the HSE has 3 weeks to submit a plan to government after the budget, the minister then has 3 weeks to approve it. In the past, this was done with some amendments usually in the form of a letter to the Chair of the HSE board.

It is usual for the HSE to work closely with the Department of Health in developing the plan so that it reflects government policy. And this year, the co-operation was more intense as the HSE is in the process of being abolished and the Department of Health makes up half of the HSE interim board.  The Secretary General of the Dept of Health is now chairman of the HSE Interim board.

Since it was submitted on 22 December and the HSE has been negotiating/amending it with greater ministerial and departmental involvement. So there were no surprises  in it, so why is the minister is rejecting it?

As Sean O’Rourke said on the News at One, it is like ‘Sinn Fein/IRA in the old days’ or as Fergal Bowers said it’s like ‘sending a letter to yourself to complain about yourself’.

In my opinion the Minister’s media outings were a damage limitation exercise. His appearance on the Pat Kenny show was to take the heat out of the badly announced increase in health insurance levy. James Reilly did very well on Pat Kenny Show but it should not have come to that if better managed.

His lunchtime exclusive interview was pure optics, softening up the public to the imminent cuts and an effort to distant the minister from the cuts he will oversee.

The minister made the point that he wanted was the same amount of services for less money. The problem with that is that the HSE has been doing that year on year, since 2007, providing more services with less money and fewer staff, yet we have a growing ageing sicker population.

About €2 billion was taken out of the health system since 2010, and there are 5,000  fewer staff than there were in December 2009.

And there are 3,200 more staff expected to come out of the health system before the February deadline. When the government announced the public sector pay cuts they gave public servants until February 2012 to retire early, without their lump sum being taxed and with their pension at pre cut rates – a significant carrot.

Counter intuitively the fewer who go the more beneficial it is for the HSE in 2012 as they will pay out less in the lump sums and have more staff to provide essential services.

Also in the Fergal Bowers’ interview on the News at One, the minister said after discussion with the minister Howlin, he had negotiated health cuts down from €868 to €650 million. My understanding is that budget 2012 announced €550 cuts to health but €300 million was unaccounted for eg increments, new VAT rate and over runs from 2011 were not included. But there is no new money for the health system, what the minister might have negotiated is that if number who leave in 2012 is lower than 3,200 then the HSE get to keep €97 million allocated for lump sums.

Staffing costs are a majority of the health budget usually 50-60% of the budget and in some cases 90%. New information on staff pay was released in PQ on 24 December showing that 40% of HSE staff earn less than €40k, 75% earn less than €60k therefore 25% earn more than €60k. These same figures also show that 4.26% of HSE staff earn €160-200k!

So choices are being made about what to cut and where in the Service Plan without even considering high pay. And that’s where differences emerge between the minister’s with James Reilly doing a u turn on his pre election promise not to cut consultants pay.

James Reilly was very clear pre election that he wanted to cut consultants pay, then went to IHCA annual conference and said  Croke park was the way to go – yet an opinion piece in the Irish Times on 4 January 2012 by Roisin Shortall on health reform, she stressed the importance of on lowering the cost base of health care,  of more primary care, of providing care at the lowest level of complexity, of managing chronic diseases in the community and crucially of ‘bringing payments for hospital doctors in line with Europe’. This last sentence reads to me as cutting consultants’ pay.

So the minister is sending the plan back to himself for redrafting and we will know the final detail on Jan 13th and then there is a promise to review in March when the impact of the early retirements are known…

All will be revealed next week. Really it is not a matter of whether to cut but where and how much… Yesterday’s rejection of the plan was mere window dressing and a poor attempt to distance himself for the cuts he has no choice but to oversee.

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  1. norabatty said, on January 6, 2012 at 8:06 am

    I am watching this drama with great interest, it is clear as mud exactly what the Minister’s plans are for the smaller hospitals around the country and it worries me even more that the larger hospitals are still in crisis, how will the budget over-run in the Mid Western Hospital Limerick effect services in the HSE West ,
    the new CEO will have her work cut out for her in 2012. I would like to wish her luck with it.

  2. Seanán Kerr said, on January 10, 2012 at 2:17 am

    “About €2 billion was taken out of the health system since 2010, and there are 5,000 fewer staff than there were in December 2009.”

    Hi there, I’ve been looking for the past hour or so for a figure on how many hospitals, care facilities, beds etc have been shut down, or at the very least how much money has been taken out of the health system, do you have a source where I could find more concrete figures and data on this please?


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