Most of the €1 billion needed to be saved by the health sector in 2010 is coming from slashing staff pay rather than curtailing services further, writes EITHNE DONNELLAN
THE CUTS IN health service funding for next year had been well flagged. In August, the Department of Health instructed the Health Service Executive (HSE) to draw up plans to cut spending by up to €800 million in 2010 which prompted initial suggestions within the HSE that this could not be contemplated without closing some small hospitals. The following month the Minister for Health Mary Harney said 2010 would be “the most challenging year ever from the perspective of financing the health service”. And in November she made it clear the Government was looking at implementing cuts “of over €1 billion” in health next year.
So we were well softened up for tough medicine by the time the Minister for Finance Brian Lenihan rose to his feet to deliver the latest Budget last Wednesday.
In the end, while the various revenue-raising measures he reeled off were harsh, the truth is that many health sector observers expected much worse. In the days prior to the Budget there had been speculation about increased AE charges and a hike in the cost of private beds in public hospitals. But they never materialised. The much heralded introduction of a prescription charge for medical card holders was introduced though – at 50 cent per item dispensed up to a maximum of €10 per family per month – but had the McCarthy report’s recommendation on this been implemented medical card holders would have faced a €5 flat fee for each prescription filled.
The introduction of a prescription charge for medical card holders for the first time in the history of the State from April next year – which Harney claims will help stop inappropriate prescribing – has met with opposition but it’s unlikely to cause a furore like that generated a year ago by the abolition of the universal entitlement to medical cards among the over 70s.
The main reason why, on foot of the Budget, cuts to services are not as bad as they might have been is most of the €1 billion or so which needed to be saved by the health sector in 2010 is going to come from slashing staff pay rather than curtailing services further. Pay cuts among health sector staff and cuts of around 5 per cent which are to be made to the fees paid to GPs and other health professionals’ fees will save €659 million.
Nonetheless, patients who may feel the services they avail of have been protected should be warned they are not home and dry just yet as nobody can be sure what the ramifications will be of cutting the pay of the 100,000-plus staff working in the public health sector. If most of these staff take industrial action in protest at their pay cuts – something now being actively contemplated – it could have a very serious effect on patient services. And when you consider the effect just one day’s strike action had on the health services last month – when an estimated 16,000 patients had appointments deferred – the effect of a more sustained campaign of action could be huge.
The Irish Nurses Organisation has already said its members will “never accept” the imposition of this second pay cut in nine months. The national executive of the Psychiatric Nurses Association of Ireland has backed full and continuous strike action as part of a campaign against the pay cuts.
Meanwhile Impact, which represents many of those in administrative grades, is proposing selective strike action with the possibility of a wide scale strike at a later date. And while members of the Irish Hospital Consultants Association cannot take strike action they could take a limited form of industrial action if pay increases due before their 15 per cent pay cut announced in the Budget are not sanctioned.
But whether most workers would have a stomach for sustained industrial action – during which their pay packets would suffer once again – remains to be seen. Many nurses may have been put off the idea by their experience of seven-and-a-half weeks of industrial action in 2007 in pursuit of a 10 per cent pay rise and a shorter working week. They got a shorter working week but no pay rise. And since then their pay has actually been cut.
So the major Budget backlash in health will probably come from whatever decision staff make in coming weeks and months in response to public sector pay cuts.
But for individual patients the effects of the Budget may be more immediate. The non-pay savings in health required next year come to €400 million. This will see the monthly threshold for the Drugs Payment Scheme, for example, being increased from €100 to €120 from January 1st; dental services for medical card holders and those making PRSI contributions being curtailed; and the HSE has been told to achieve “economies” worth €106 million. How all this money will be saved won’t be clear until the HSE’s 2010 service plan is published in coming weeks.
In addition to these new savings the HSE will have to continue with a range of measures it had to introduce this year and last year to cut costs.
To date in 2009 more than 900 beds have been closed by the HSE and theatre lists have been cut leaving patients waiting longer for surgery and leaving some surgeons twiddling their thumbs – as graphically highlighted recently by Letterkenny General Hospital’s orthopaedic consultant Peter O’Rourke who said he had “nothing to do” because the hospital had postponed surgery due to budgetary overruns.
Furthermore, the ongoing moratorium on recruitment in the public sector will see an estimated 3,700 fewer staff in the health sector by the end of 2010 which could end up leaving many patient service areas being short-staffed, unless remaining staff agree to redeployment – something that’s unlikely in the light of pay cuts.
At the end of the day therefore, even if the HSE has a massive €14.5 billion for day-to-day spending next year out of an overall health service allocation of €15.6 billion – which incidentally is down 5 per cent on last year – it will have its work cut out trying to balance the books, with or without any industrial action.
Interestingly, just two days after the Budget was unveiled advertisements were placed in newspapers looking to recruit a new chief executive for the HSE to do this job, given Prof Brendan Drumm’s plans to quit in August once his five-year term expires. Anyone willing to accept a smaller pay packet than Prof Drumm and with an ability to lead organisational change and a now demoralised and rebellious workforce should lodge their applications by January 15th.