PAC-ing a punch on HSE spending
Medical Independent column from 5 November 2015
Last month, HSE Director General Mr Tony O’Brien made his last appearance before the Public Accounts Committee (PAC) as the person with ultimate accountability for the health budget. This is because responsibility for the health budget was transferred from the HSE back to the Department of Health on 1 January 2015.
From here on in, the Secretary General in the Department of Health will be the accounting officer for health and therefore responsible for the health budget. Mr O’Brien will continue to appear before the PAC, but he will no longer be first in the line of defence.
The PAC was scrutinising the Comptroller and Auditor General (C&AG) report on the HSE 2014 accounts. The headline figures discussed are well known: The HSE spent €13.5 billion last year including €680 million provided in a supplementary budget in December 2014.
Mr O’Brien outlined how €400 million of €2.7 billion spent on supplementary health allocations between 2008 and 2014 was within its control, while the rest was due to increased demand for care, more people entitled to medical cards or Government initiatives that it did not have control over.
Fianna Fáil TDs John McGuinness and Sean Fleming were outraged at the HSE’s overspend, forgetting perhaps that they were in Government and therefore shared responsibility for nearly half of these supplementary health budgets.
Deputy Fleming criticised the HSE for not being compliant with national tax rules nor procurement rules, for being in breach of prompt payment deadlines, for its deteriorating record collecting income from private patients in public hospitals, as well as having inadequate controls over its own high-tech drug scheme.
In correspondence sent to the PAC in advance of the meeting, the HSE admitted that it paid €22 million to Revenue last August in underpaid taxes covering years 2011-13. Mr O’Brien outlined how this was a full and final payment for those years and that there was some more due for 2014. The HSE defended these payments reminding the PAC that it had done so voluntarily, that it is the largest employer in the State with 100,000 staff and a tax pay bill of €1.6 billion, arguing that €22 million was just a fraction of its overall spend in this area.
The C&AG outlined how by the end of 2014 there was €290 million not collected by the HSE for the treatment of private patients in public hospitals. Up to 2014, all hospital beds were designated public or private and there was a limit in the numbers of private beds capped at 20 per cent of all public hospital beds. Insurers were only charged for those private beds. On 1 January 2014, after a six-month lead-in process, any private patient was charged the full cost of the bed or day treatment.
Two main delays in collecting this €290 million were identified. First were delays in payment from insurance companies totaling €175 million. The C&AG was very critical of the Department of Health for the ‘confusion’ over what could be charged for up to August 2014. Some insurance companies refused to pay for patients in emergency department or intensive care beds, and there was also confusion if treatment in a chair or on a trolley was to be charged for. In August 2014, the Department clarified that private patients were to be charged, no matter what type of bed, chair, recycliner or trolley they were in.
In July 2014, the HSE started to work on a memorandum of understanding with insurance companies to get prompt payment on these contested beds. This is still a work in progress but is due to be completed soon with the VHI and, following this, with other insurance companies.
The second delay in collecting this private income is consultants not signing off on private treatment provided in public hospitals, contributing to €67 million in uncollected income. This is a perennial problem for the HSE and they have put in an ‘efficiency claims process’ to combat it.
While the majority of the 2,200 consultants employed by the HSE sign-off on these forms quickly, a small number of consultants account for the bulk of money owed. Some bills are outstanding for years.
PAC chairman Deputy John McGuinness recommended disciplinary action against these consultants, suggesting the HSE started ‘kicking some ass’ and otherwise ‘name and shame’ the consultants delaying €67 million of public money.
The C&AG highlighted €315 million of public money that was misspent or not collected in 2014. This is over half the supplementary budget that will be paid to health this year. It is €330 million that would go a good way towards much-needed investment in primary and community care, maternity and children’s services, or it could pay for 300,000 more medical cards.
Only when there is one integrated financial system will it be possible for the HSE to be held to account and for it to ensure that all its money is spent wholly in the public interest. The HSE says it wants to get Government approval to go to tender for this new system very soon, but realistically it will take five years to move to this single integrated financial system.