Presentation by Liam Woods

Finance Director HSE

18 June 2009

Content

• National financial outlook• HSE finances for 2009• Medium term planning focus• Sample of change in Mental Health• Sample of change in mid West hospitals• Conclusion

Budgetary Projections 2009 – 2013 Department of Finance

2009 2010 2011 2012 2013 €m €m €m €m €m

CURRENT BUDGET Expenditure Gross Voted Current Expenditure

56,588 56,757 56,111 56,892 57,672

Non-Voted (Central Fund) Expenditure

5,855 7,796 9,304 10,526 11,247

Gross Current Expenditure

62,442 64,553 65,415 67,418 68,918

less Expenditure Receipts and Balances

16,077 13,816 13,531 14,085 14,372

Net Current Expenditure

46,365 50,737 51,884 53,333 54,546

Receipts Tax Revenue 34,400 35,375 38,971 41,354 43,735 Non-Tax Revenue 852 765 722 722 723 Net Current Revenue

35,252 36,141 39,693 42,076 44,458

HSE financial trends in brief

HSE Net Revenue Funding 2006 - 2009

11,362

12,835

13,78013,556

10,000

10,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

2006 2007 2008 2009

Year

'€m

Percentage Change 2006 -2009

13%

7%

-2%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2006 / 2007 2007 / 2008 2008 / 2009

Year

%

NHO Expenditure Oct 2008 - April 2009(Net of Pension Levy)

340,000350,000

360,000370,000380,000

390,000400,000

410,000420,000

Oct Nov Dec Jan Feb Mar Apr

Month

Exp

end

itu

re '€

000

Schemes & Medical Card Growth 2005 -2009 (Est)

2009(Est)

2008

2007

2006

2005

1,500,000 2,000,000 2,500,000 3,000,000

1

Ye

ars

'€000

HSE financial challenges in 2009before the recent budget

€m Actions NSP 2009 Maintenance of 2008 VFM Programme €280 These are being

actively pursued and can be assessed through the Performance Report.

2009 VFM Programme €115 Service efficiencies €135 Additional efficiencies €133

Subtotal €663

Post NSP 2009 Risks addressed by Minister through the mini budget and REV.

Costs of Wholesale margin/Over 70s Medical cards and Hickey Case

€205

Additional Medical Card growth in 2009 €100 There is a risk that this figure could be exceeded

Long Stay repayment Scheme (€10m of this may not be an issue until 2010)

€67

Increased Uptake in Consultant Contract €30 Additional Government Savings

Requirement €40

Health Levy Shortfall €160 There is a risk that this figure could be exceeded

Subtotal €602

HSE financial challenges in 2009after the recent budget

Emerging Risks since previous presentation

Pensions (€20m YTD) €50 While this cost is difficult to project on a full year basis, the trend to date should it continue would give rise to a deficit of at least €50m.

Shortfall/delay in delivery of savings (€663m) identified in the NSP.

€150 Predominantly relating to work around re-configuration and non –basic pay savings.

Pandemic Flu €85 €5m currently ordered with a commitment for an extra €80m for the purchase of vaccines in process.

Capital pressures €30m Potential risk being assessed

Health Levy* TBC Will not be known until late in the year.

Medical Cards TBC Total of emerging risks €315m

Focus of medium term planning

International Experience

• Focus on key cost drivers• Reconfigure care focusing on ambulatory care• Develop clinical leadership• Performance manage – use data• ICT enable• Eliminate services that do not support

strategy • Shift to geographic management of services

Cost Drivers• In the USA, 75% of health costs are used to treat people with chronic

illness. In Australia, chronic illness account for nearly 70% of allocated health expenditure while in Ontario, the economic burden of chronic disease is estimated at 55% of total direct and indirect health costs. Five illnesses are responsible for most of these costs: Asthma, Congestive Heart Failure, Cardio Vascular Disease, Diabetes and mental illness. Reduction in and control of expenditure in these areas can have a large impact on the overall budgetary position.

• Health Care Reform Now, A Prescription for Change, George Halvorson, 2007

• National Health Priority Action Council (NHPAC), 2006, National Disease Strategy, Australian Government Department of Health and Ageing, Canberra

• Preventing and Managing Chronic Illness: Ontario’s Framework, Ministry of Health and Long Term Care, May 2007

Reconfiguration

• Reducing inpatient capacity in a planned, swift and sustained manner, substituting in-patient care with ambulatory care in either a hospital or primary care setting. This allows for the delivery of acute services in settings with a critical mass not only improving the cost of services but also the quality of the care provided.

Example of change in mental health services

through resource reallocation

1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

800

700

600

500

400

300

220

100

Number of Mentally Ill Persons Resident in Institutions in Ireland per 100,000 Population from 1850 - 2000

Source: Inspectors Reports / Damien Brennan, 2007

Vision for Change Commitments

Revenue

Additional Investment of €21.6m annually x 7 years

Raising percentage of Health Spending from 6.7% to 8.4%

€

Human Resource

Additional 1,800 WTEs

MDT Working New Skills & Investment

Capital

Sale of Lands & Existing Assets

Reinvestment of Proceeds to the value of €796m

Organisational Structure

Larger Catchments

Service User in Management

7

  Statutory Statutory Stat & VolStat & Vol

with 2006 Per Capita Regional National

Local Health OfficeExpenditu

re Budget Budget Patient flows Population Allocations Ranking Rating

Mental Health Budget 782,763,157 754,612,774 796,514,303 796,514,303 4,234,925 188    

                 

                 

PCCC Dublin/Mid Lein 205,943,365 178,970,025 206,696,258 196,714,814 1,215,711 162 4  

LHO Area 1 Dublin So 51,309,709 29,896,000 57,622,233 31,737,182 126,141 252 2 high

LHO Area 2 Dublin So 17,845,640 16,248,730 16,248,730 17,857,029 110,186 162 4 average

LHO Area 3 Dublin So 16,056,461 14,650,000 14,650,000 16,608,813 134,200 124 6 low

LHO Area 4 Dublin So 19,124,788 19,044,786 19,044,786 21,202,648 147,837 143 5 low

LHO Area 5 Dublin So 13,735,672 13,678,214 13,678,214 15,627,715 133,562 117 7 low

LHO Area 9 Kildare/W 14,713,066 14,565,000 14,565,000 17,529,157 203,077 86 9 low

LHO Area 10 Wicklow 11,417,960 10,995,298 10,995,298 12,591,074 109,328 115 8 low

LHO Area 11 Laois/Of 26,236,139 27,579,996 27,579,996 29,588,670 137,616 215 3 average

LHO Area 12 Longford 32,409,611 31,987,001 31,987,001 33,647,526 113,764 296 1 high

South Western Area R 88,303 325,000 325,000 325,000        

Retirement Window

Example of change in Mid West region

Services in Mid-WestNatural Hub and Spoke !

Populatiion = 360,000

Regional hospital (Limerick)

St John’s (Limerick)

Ennis (< 30 mins)

Nenagh (< 30 mins)

• 75% of population live within 25 miles of Limerick

TEAMWORK Background Risk Issues

• Approx 1 inpatient elective case / day done in 2 local hospitals

• 105 surgical “emergencies” in one month in Nenagh, only 12 required anaesthetic

• Jan- July ’08: -- 21 & 28 cases out of hours in St Johns and Ennis

• (Full theatre on call in 3 local hospitals)

• 1 in 3 rota (78 rest days) half of all weekends covered by locum!

• A/E: clinical governance,

TEAMWORK Report – Mid West

Surgery and Critical Care:

• “Unable to sustain safe reliable levels of care on a continuous basis in Trauma, Acute

Surgery, and ICU/High Dependency”

“These issues should be rectified Immediately”.

Stakeholder – The Goal!Consultants Patients GP’s

• Mid West Regional hospital

• Tertiary Care Centre

• Major Trauma Unit

• Academic/University Teaching Centre

• Centre of Excellence

Ennis / Nenagh

• Local Hospital

• Advanced diagnostics

• Day Surgery

• MIU / MAU / CAAU

• Inpatient beds

• Therapies

• PCT / HSCN

Summary

• First phase of project now complete with out of hours services in Limerick