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Hospitals move to Activity-Based Funding

11 Feb 2016

Moves to abolish and replace the HSE are under way, Gary Culliton reports. New reforms will see hospitals converting to Activity-Based Funding in 2016.

The development of post-HSE structures is under way, with the recruitment of CEOs and management teams for hospital groups and Community Healthcare Organisations (CHOs). The plan is to operate and develop these new structures on an administrative basis in advance of a legal structure.

The Government last year decided not to proceed with the universal health insurance (UHI) model proposed in the White Paper and re-stated its commitment to universal healthcare. Further research is being conducted by the Economic and Social Research Institute (ESRI) on the costs of various models before a move to a new funding system. 2016 will be the ‘conversion year’ for Activity-Based Funding (ABF) of hospital budgets. The technical capacity to assign and issue individual health identifiers is now in place.

The first concrete steps had been taken towards universal healthcare, the Government said: GP care without fees was extended to 219,451 children under six and 50,559 people aged 70 or more. The under-sixes programme includes health checks and a new cycle of asthma care, for which 19,911 children have been signed up. Some 62,436 adults with type 2 diabetes have joined a programme for it to be managed in a primary care setting.

The decline in the number of people with health insurance was reversed last year with an increase in the number of people covered of approximately 100,000. Young adult discounts and Lifetime Community Rating were introduced and Vhi Healthcare secured authorisation from the Central Bank.

Significant progress
2016 should see significant progress on a new GP contract, and funding has been set aside in the HSE National Service Plan for developments in rural practice, minor surgery, access to diagnostics and the extension of GP care without fees to children aged six to 11. Despite an overall fall in the number of medical cards, the number of discretionary medical cards rose by 28 per cent from 76,665 last year to 97,562.

The HSE Service Plan for this year sets targets for modest improvements in waiting times in 2016. Some €50 million was provided to reduce long waiting times for public patients, with a particular focus on those waiting for more than 15 months.

The numbers waiting for any amount of time for a procedure or operation rose from 64,000 to 69,000, but there has been a significant fall in those waiting over a year, down from more than 10,140 in September to under 7,780 in November.

The total number of people waiting any amount of time for an outpatient appointment fell from 395,000 in January to 385,000 in November. The numbers waiting more than a year fell from 67,000 in January to 48,000 by November.

The health service took on 4,000 more staff in 2015, with the midwife/birth ratio at its highest ever. There was a significant fall in agency costs in the hospital sector.

Recruitment of nurses, paramedics and consultants remains a challenge in a competitive international labour market. The focus in 2016 will be on filling vacancies, replacing locum and temporary consultants with permanent ones, increasing the number of GP trainees, and further reducing the agency spend.

The National Healthcare Quality Reporting System (NHQRS) annual report was published for the first time last year, enabling comparisons of health outcomes nationwide. This will be published again in 2016, so improvements and disimprovements may be identified.

The budget for health service information technology was last year increased to €55 million and this will be sustained in 2016 with increased capital cash available through to 2021.

A new Maternity Strategy was published last month and the new Cancer Strategy will soon be published. There were reviews of the Mental Health Act and the Fair Deal in 2015, and legislation was passed on Advanced Healthcare Directives.

A series of National Clinical Effectiveness Guidelines were published, along with the heads of the Health Information and Patient Safety Bill. The law was changed in 2015 to give people easier access to life-saving emergency medicines like adrenaline, glucagon, salbutamol and naloxone.

Some €3 million in extra resources has been provided in the HSE Service Plan for 2016 to develop a patient safety/ quality programme. A comprehensive patient safety package was presented at the recent Annual Patient Safety Conference.

Evolving methods
Progress has been made on reducing Child and Adolescent Mental Health Services (CAMHS) waiting lists, with a drop in those waiting more than 12 months and a continuing reduction overall. There is a new HSE Standard Operating Procedure for CAMHS at local level. For those waiting longer than 12 months, the figure was 479 in March and 222 in October — a 55 per cent decrease.

The HSE expects to further cut the over-12 months list in most areas — “except where particular staff recruitment/retention difficulties require special attention”.

Meanwhile, hospital funding associated with inpatient and day-case activity will effectively be withdrawn and replaced with funding provided upon the delivery of activity in line with agreed targets. The ABF model will continue to evolve, moving towards outpatient activity and extending into community services.

In order to maintain financial stability, where appropriate, hospitals will be given transition adjustment payments to reflect the difference between their current costs and the national average cost, the Minister for Health has said. These transition payments will be phased out over time.

ABF did not seek to reduce budgets, Dr Leo Varadkar said in response to Dáil questioning by Independent Deputy Tommy Broughan. Instead, it would encourage hospitals to use resources efficiently, and would provide a more transparent mechanism “that more fairly rewards hospitals for the activity they undertake”, he said.

Gary Culliton

Click here to view the full article which appeared in Irish Medical Times