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Joint Committee on Health debate -
Wednesday, 31 May 2017

National Treatment Purchase Fund: Chairperson Designate

The purpose of this part of this afternoon's session is to engage with the chairperson designate of the National Treatment Purchase Fund, NTPF, Mr. John Horan, to discuss his strategic priorities for the role and his views on the challenges currently facing the NTPF. On behalf of the committee, I welcome him and thank him for coming. I wish to draw his attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if he is directed by the committee to cease giving evidence on a particular matter and he continues to do so, he is entitled thereafter only to qualified privilege in respect of his evidence. He is directed that only evidence connected with the subject matter of these proceedings is to be given, and he is asked to respect the parliamentary practice to the effect that where possible he should not criticise or make charges against any person, persons or entity by name or in such a way as to make him or her identifiable. I also wish to advise that any submission or opening statement that is made to the committee may be published on the committee's website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against the person or persons outside the House or an official, either by name or in such a way as to make him or her identifiable.

Mr. John Horan

I thank the Chairman and members for the invitation to discuss my re-appointment to the position of chairman of the NTPF. I also thank the Minister for Health, Deputy Harris, for re-nominating me to the position. This confirmation process provides a welcome opportunity to discuss my vision for the future contribution of the NTPF and for my role as chairperson. In order to do that and by way of providing the committee members with some background material I have in recent weeks forwarded to each member copies of my curriculum vitae, together with the NTPF’s strategy and action plan for the years 2017 through 2019. I propose therefore by way of this opening statement to deal briefly with these two matters.

In the first half of my career I held a variety of positions in both operating and service departments in Aer Lingus. During that time I had extensive involvement at board level with the airline’s wide-ranging list of subsidiary companies involved in what were then known as ancillary activities. For much of the following 20 years, I led two national organisations as chief executive, namely, the Irish Hotels Federation and then Veterinary Ireland. At home, this work involved extensive dealings with Departments, public bodies and the media, while abroad on the international front I represented these sectors in international organisations in dealings with a range of bodies, particularly at a European level. In the course of this work I was nominated by IBEC to be a member of the Employment Appeals Tribunal, EAT, uniquely at a time when I was a serving general secretary of a trade union affiliated to the Irish Congress of Trade Unions. Having served almost ten years with the EAT, this work is coming to an end with the amalgamation of the EAT into the newly created Workplace Relations Commission.

On the community front, on behalf of Blessington and District Forum I have served on a Fáilte Ireland tourism destination development steering group and have particularly championed the development of a new greenway around Blessington lakes. I have also been appointed by Kildare and Wicklow Education and Training Board as one of its nominees to the board of management of Blessington community college. On the academic front I hold a masters degree in management practice from the Irish Management Institute and Trinity College, Dublin. In addition to the above I was honoured to be asked to serve on the board of the NTPF, a body which has carried out some great work in delivering faster treatment to hundreds of thousands of patients in the public health care system.

While not wishing to delve too much into the history of the organisation, it is worth noting that from its establishment on an administrative basis in 2002 and on a statutory basis as an independent agency in 2004, the NTPF succeeded in reducing waiting times for public patients from their original levels of two to five years down to an average waiting time of two and a half months. This was achieved through the direct commissioning of patient-level treatment for public patients by the NTPF, mostly in private hospitals.

In 2009, the nursing home support scheme, referred to colloquially as the fair deal, was established and the NTPF was given a key role in the pricing of long-term residential care. In what is a vitally important task in terms of its importance both for the users of the system and for national finances, the NTPF has delivered consistently in setting up the system of agreeing prices with more than 400 nursing homes and achieving satisfactory results over the years. I should say that we are currently working with both the Departments of Health and Public Expenditure and Reform in a review to ensure that viable and effective systems continue to be provided for both providers and users of long-term residential care throughout the country.

A decision made in 2012, reflecting then Government policy, assigned additional responsibilities to the NTPF and effectively signalled the end of the organisation’s direct patient treatment commissioning role. It also produced major change in the operational framework of the NTPF, as this commissioning work had represented a significant part of the activity of the NTPF since its inception. The result was that the organisation re-focused its efforts to support the scheduled care system in areas such as data and analytics, negotiation of nursing home prices and audit and quality assurance. Through these efforts, the organisation continued to provide valuable support services to the broader health care system at a time when it was undergoing significant change and reform. During this period of change and uncertainty, the organisation reduced its staffing levels to reflect the changing roles and the reduction in annual budgets.

In more recent years the role and function of the NTPF have been clarified and have evolved in line with Government policy but the original intention has always remained the same, which is to achieve the faster treatment of patients. On foot of the decision of the Minister for Health, Deputy Harris, in 2016 to re-establish the individual patient level commissioning role of the NTPF, and importantly with the associated enabling funding, the organisation is particularly well placed to make again an increased positive and valuable contribution towards shorter waiting times for patients. I say this with confidence based on the proven track record of having done so in the past.

In 2014, a new NTPF board was appointed. It was one of the first selected under the Public Appointments Service process. This board has a wide range of skills covering areas such as medical, legal, accounting, IT, procurement, personnel and general management. While continuing to oversee the ongoing operations of the organisation, the board applied itself particularly to the task of preparing the organisation through the development of a detailed strategy and action plan, all aimed at supporting performance improvement for the faster treatment of patients. The outcome of this work meant that the NTPF was well placed to support the commitments contained in the programme for a partnership Government of 2016 pertaining to the specific funding allocated to the organisation to reduce waiting lists in 2017 and 2018.

In the strategy and action plan, which I have circulated to members in advance, it can be seen that we have established six key objectives that must be achieved to ensure that we deliver successfully on our overall strategic intent between the present and 2019. We aim to negotiate pricing agreements and purchase quality care from providers on behalf of the State. In this regard our second strategic objective is to ensure that a sustainable and fair market exists for long-term residential care with sufficient capacity to meet the requirements of those who require such care. We will continue to publish and share quality-assured waiting list information in respect of public health services.

This is designed to ensure our key partners and stakeholders in the health care system are equipped, in a timely manner, with the necessary data and tools to make decisions that will ultimately lead to patients being treated faster.

A further objective in this regard will be to develop performance improvement tools that will equip operational managers in the delivery system to manage resources in the most efficient, effective and equitable manner possible. We will also provide advisory expertise for the public health service on patient treatment pathways for scheduled care and waiting lists for primary and community care. While doing all this, as chairman leading a strong board of directors, I will ensure the National Treatment Purchase Fund governance and operational infrastructures are fit for purpose in delivering and communicating our strategic objectives for the treatment of long waiting patients.

On corporate governance, I am pleased that we now have our full complement of board members. Using the services of the Public Appointments Service, we have recently recruited a new full-time chief executive. This was a key part of the reactivation of the NTPF's role of commissioning patient treatment, as is the rebuilding of our staffing resources to support the work of reducing waiting times for the longest waiting patients.

To deliver on the requirements placed on the organisation under the programme for Government 2016 the NTPF's budget has been increased to €20 million in the current year, with a further €55 million committed for 2018. I am pleased to report that the preparatory work for the resumption of commissioning of patient treatment has been completed and detailed arrangements have been made with private hospitals to commence the work. Day case patients are already in the system and more are being placed on treatment pathways. A further tranche of funding will be committed very shortly to an insourcing initiative, under which up to €5 million will be spent on treating patients in public hospitals for specific procedures and treatments. In the second half of the current year a third phase of spending will be determined based on our experience with the first two elements and this may be a mixture of inpatient and day cases, all of which will be aimed at reducing the list of patients waiting for treatment for more than 15 months as at the end of October 2017. Looking ahead, our decisions on the specific uses for next year's funding allocation will be informed by our experiences with this year's approach.

As members will realise, these amounts of money on their own will not solve the waiting list problem. However, they will contribute to that process. More importantly, thousands of long waiting patients will receive their treatments faster and, I hope, be enabled to get on with their lives.

I reassure the joint committee that my objective, as chairman of the board, will be to ensure the National Treatment Purchase Fund continues to be well directed and managed in accordance with all appropriate governance requirements. We have a cohort of board members and a committed executive team and employees giving us a base of significant experience and skills. Our aim will be to ensure the functions allocated to us by the Government are carried out effectively and efficiently and that we will be in a position to demonstrate that all funding voted to the organisation is being spent, as intended, to reduce waiting times for patients in the public health care system. I will be pleased to answer questions members may have.

I wish Mr. Horan well in his new role and thank him for his work to date in all of the organisations in which he has been involved. He referred to the nursing homes support scheme. I have the terms of reference for the review of the system for setting nursing homes prices which is due for completion by 1 June. In recent weeks I have received correspondence from a number of nursing homes in which they complain about increased costs. They are being hit on a number of fronts. For example, as a result of the revaluation of commercial rates charged by local authorities, one nursing home has been informed that its rates bill will increase from €18,000 to €54,000 per annum. On average, the rates bills of nursing homes have doubled, which creates a significant drain on their resources.

A second cost for nursing homes arises from regular inspections carried out by the Health Information and Quality Authority, HIQA. While these inspections are appropriate to ensure standards are maintained in nursing homes, they also give rise to costs. Nursing homes must also compete when recruiting staff.

Nursing homes operating under the fair deal scheme face many competing demands. They have also had their payments cut in recent years. When is the review likely to be competed?

There is no appeals process in place when a nursing home is aggrieved about a decision setting the weekly cost of a bed. In some cases, nursing homes operating under the fair deal scheme receive between 30% and 50% less than what is available under the public scheme.

The level of care required by a patient may become more intense after he or she has been admitted to a nursing home facility. People are living longer and the level of care they require increases as they get older, but this is not taken into account when the level of payment is set. What is Mr. Horan's view on this issue?

It is astonishing that a waiting list of more than 4,000 has developed for gynaecological services in Cork. One of the issues that arose was access to theatres. The normal procedure is that the National Treatment Purchase Fund will refer a patient to a private facility, including in Northern Ireland. Gynaecologists and obstetricians in Cork have indicated that they have time on their hands and are prepared to do this work. They have suggested doing it in one of the private hospitals, which would require time to be bought in one of these facilities.

The issue of continuity of care has arisen. Clinicians find that when a patient is referred to another facility, there is a disconnect in providing for continuity of care. Is this issue being examined? If the role of the National Treatment Purchase Fund is to be expanded to deal with people on waiting lists, continuity of care needs to be addressed as it appears to be a problem. It was certainly a problem when people were referred to facilities outside the jurisdiction, for example, in Northern Ireland. When there were complications on their return from such facilities, the issue of who was responsible for their care arose. The issue of continuity of care needs to be examined. What are Mr. Horan's views on the matter? I thank him again and wish him every success in his new role.

I welcome Mr. Horan and join Senator Colm Burke in wishing him well in his new appointment. That said, I have serious ideological difficulties with the National Treatment Purchase Fund and the privatisation of the health service by stealth, as well as public money being siphoned off and given directly to the private sector. However, this does not in any way prevent me from wishing Mr. Horan well in his new role.

I will cite statements made about the National Treatment Purchase Fund by several people who are much more qualified than I am to speak about it. Professor Louise Kenny stated:

The NTPF does not build long-term sustainability ... The NTPF in its current format is not a solution to addressing waiting lists across the board.

Dr. Peter Boylan stated:

The NTPF is a bad idea ... It is just bad clinical practice and it should be abandoned.

It is a bit counter-intuitive to expect that handing money to the private sector will somehow magically improve the public service. It never will. The former acting chief executive officer of the NTPF was forthright in his opinion that the private sector was much more efficient. Members of this committee and the witnesses know that is because scheduled and elective procedures will always be cheaper than running an emergency department or a public hospital where all comers are treated. A significant amount of money can be saved if one can cherry-pick, but that option is not available to the public system. What are Mr. Horan's views on the performance of the public versus the private sector? I note from his curriculum vitae that he has experience in both sectors and that he served at the Irish Congress of Trade Unions, as did I, and on the Employment Appeals Tribunal, as did a close member of my family. In view of his experience, I am interested in his views on the performance of the public versus the private sector.

The witness also discussed the issue of insourcing. There is a very small amount of money put aside for that. Sinn Féin has long promoted a policy for a single integrated waiting list management system which it calls Comhliosta. Officials in the NTPF are examining this possibility but only on a hospital group basis. What are the witness's views on the nationwide expansion of such a system? If insourcing is to be focused upon, as should be done, and if money is to be put into the public service rather than fund the profits of large multinational private sector organisations, as should be done, it should be on a national basis.

With regard to the commissioning of beds or the negotiation and purchasing of beds in private nursing homes, in Scotland, large sections of nursing homes are leased for public use. Deputy Harty and I met the Scottish Cabinet Secretary for Health and Sport, Shona Robison, who said it is a very cost-effective model. If there must be privatisation in that sector, it would be important to get the best value for money for the Exchequer. The Scottish scheme proved very effective and did away with tensions in terms of nursing homes for residents, management and workers. We do not want a situation where nursing homes begin undercutting each other on price as that would impact on workers and residents. No one wants to see that. There has to be a fairer way of getting value for money for the Exchequer. What are the witness's views in this regard?

Sláintecare, the report of the Committee on the Future of Healthcare, was launched yesterday. The committee made ambitious plans as part of that report. One key principle agreed upon by the committee is that public money should only be spent in the public interest. The witness is aware of my views in this regard. How will handing money to the private sector so that large and small corporations can make a profit from treating patients fit with the future vision of the health service and how will the NTPF fit in, in view of there being cross-party agreement on a vision which does not tally with the work of the NTPF? I am open to correction or persuasion on this matter and I am interested to hear the witness's views.

Many questions have been posed and perhaps Mr. Horan could respond. Other members have yet to contribute and it would be appreciated if Mr. Horan could keep his answers as concise as possible.

Mr. John Horan

I thank members for their comments and questions. Senator Burke asked about the review of the system for setting nursing homes prices, the first part of which is to be completed in June 2017. There are two elements to it. A group comprising representatives of the NTPF, the Department of Health and the Department of Public Expenditure and Reform is working on one element. A broader group involving the Department of the Taoiseach, the Revenue Commissioners and many others is working on another element. We are well advanced in the work to be completed by June 2017. The terms of reference are to continue to ensure value for money and the economy with the lowest possible administrative cost for clients and the State and the lowest possible administrative burden for providers, to increase the transparency of the pricing mechanism in order that existing and potential investors can make as informed decisions as possible, and to ensure the adequacy of residential capacity for residents who require higher level or more complex care. That is the section on which the NTPF is leading. Work is well advanced in this regard.

I am conscious that when we were asked to carry out the review, the Minister of State at the time, Kathleen Lynch, referred to the review carried out in 2015 about the financing of the scheme and concluded that the NTPF had done an effective job in introducing and managing a pricing system for long-term residential care facilities. She said it accounts for a very substantial amount of State funding, and the way the scheme is priced has critical relevance not only for the Exchequer but also in securing the long-term adequacy of residential bed capacity for older people. It is acknowledged that we did a good job. When the Nursing Homes Support Scheme Act was passed in 2009, we were given a greenfield site and asked to get on with it. Very quickly, we had contracted more than 400 nursing homes to provide the service. This was done by negotiation and agreement, not with a group of them or a body but with each individual nursing home, and the process has continued to date. That is not to say that a system that we think is working well cannot be improved. That is what the review is about and we are working on it.

The question of complexity of care was mentioned. That is one aspect that is being looked at because, as residents are in nursing homes for longer periods, their needs become greater. We need to consider how that is dealt with and it forms part of what we are doing.

The appeals mechanism was mentioned. There are currently a number of stages in the appeals process. If a nursing home does not agree with the price negotiated with it, it can appeal. The case is referred to a new account manager for a peer review, as it were, who takes a fresh look at everything and decides whether an adequate price has been offered. If the nursing home is still dissatisfied with the outcome of that, it can appeal to the finance director of the NTPF who will take a further fresh look at the case. If it is still not satisfied, it can further appeal to the chief executive officer of the NTPF. There is an argument for an independent appeals mechanism but there would be a legislative difficulty with that as the NTPF is the body set up by legislation to negotiate and agree prices with nursing homes. To allow a third party to conduct appeals might require a change of legislation. That is not necessarily a bad thing but, as things stand, it could not happen without a change in the legislation. We have made significant progress in the review and are working with the Department of Health and the Department of Public Expenditure and Reform and will soon be coming back to the broader steering group involving the Department of the Taoiseach, the Revenue Commissioners and others.

Gynaecological waiting lists in Cork were mentioned. That is a specific issue. The Minister for Health, Deputy Harris, acknowledged it is an issue. Members might recall that I mentioned there is €15 million for patient treatment at our current funding levels. That has been divided into three tranches.

The first is €5 million which we have now begun to spend. That is being spent on day cases, all in private hospitals. The second €5 million comes to Deputy O'Reilly's point. It is to do with insourcing, that is, spending money in public hospitals. We have dealt with private hospitals and are now dealing with public hospitals. Within that, a specific element is being committed to the gynaecological care problem to which Senator Burke referred.

There is a slight concern that people generally have regarding insourcing. If there is a problem in a public hospital system with waiting lists and we are giving more money to it through the National Treatment Purchase Fund, people will ask whether we are paying on the double for something. If we spend €5 million, which we will, in the public hospital system, we have to be sure it is not going into a black hole. Rather, it must be identified for specific items and people, as is the case in private hospitals. We can relate every €1 we spend back to a patient. Similarly, in terms of the vast bulk of the €5 million going back into the public system, we will, due to the way things are being conducted, be able to ensure the same level of traceability in public hospitals.

I am going on the notes I have made. Deputy O'Reilly referred to her serious ideological difficulties with private versus public hospitals. I fully understand her thinking on that. She asked me for my thinking. My answer is that it is a case of whatever works. People are on waiting lists. There are individuals who have families around them. They are all suffering and do not want to be on waiting lists. If we can end their suffering, improve their situation and help them to get on with their lives through buying treatment in a private hospital, we will do that. If we can do so in a public hospital, let us do it that way. Let us do things in the most efficient way possible. I do not have any hang-ups about public or private hospitals. My phrase is "whatever works".

Does Mr. Horan not accept he is hamstrung in the public sector in the competition to be the best? Money is taken from the public sector and put into the private sector. There are many people who cannot afford to access the private sector and jump the queue in the way that some people do. It is proposed to put money into the private sector where money is top-sliced off for profit and the responsibility of a chief executive is to shareholders rather than patients. The responsibility of the people who run the public service is to patients, the public purse and the Minister.

Does Mr. Horan take my point? The acting chief executive said, in his opinion, that the private sector was more efficient. I do not believe that is the case. There are all sorts of reasons one might be able to say that, but it has to do with cherry-picking rather than efficiency. The very existence of a mechanism to siphon money from the public sector and put it directly into the private sector is hampering the public sector.

In the long term, we will not address waiting lists in the public sector, even if such a policy has a very temporary short-term impact, as it did several years ago. However, it did not have a long-term impact. We are dealing with the aftermath of what was most definitely not a long-term solution.

Mr. John Horan

The policy changed when we got the system working and so on. The Deputy is correct. When the NTPF was first established, we had a Government directive that we had to spend a minimum of 90% of our funding in private hospitals. That is gone. It is now open season. As I said, wherever we get the best value for money is where we should spend our allocation. We do not have a huge allocation, so we have to spend it wisely.

The Deputy mentioned people who will never be able to afford to get into the private system. In effect, over the years where the public system has not met people's needs. We have taken money that was allocated to the NTPF for this purpose and used it to put public patients into the private system and pay for their care. We managed to blur the lines. We are now putting our first €5 million into the private sector and our second €5 million into the public sector.

As I said in my opening statement, we will evaluate the outcome in determining where the third €5 million goes. More important, we have €50 million next year for public patient treatment commissioning. Where we spend that €50 million will be very much informed by our experiences this year. We are learning as we go and we will base our decisions on that. We have no ideological hang-ups. We have waiting lists because hospitals do not have capacity. There is capacity in private hospitals. That may not always be the case. If we can incentivise them or whatever, that may work.

That leads me on to the Deputy's question about the integrated waiting list management system, on which she is very keen. At our level, we have started that process and it is under way. I can tell her that, as of now, all stakeholders have been identified and have been written to. We have asked various experts and stakeholders to nominate nominees to participate in a project in the group study we are doing. The project approach has been outlined and the scope has been done. We have defined the review and so on.

We have commenced the socialising of a project charter which is due for sign-off this week. I know the Minister has committed to talking to the Deputy during the summer recess and to meeting her separately on that. The process is under way. It is a start. I know the Deputy wants it done on a national level, and we may well get there. At least we have made a start.

The approach of Scotland is interesting in that large sections of nursing homes are leased. Does that means one part of a private nursing home houses private patients and the other public patients? I wonder about the benefit of that. The system we have is seamless, whether someone is being paid for out of their own funding, the family's or from the State purse through the nursing homes support scheme. The lines are blurred. One does not see those lines when one walks in the door of a nursing home.

I may not have made myself clear. The system in Scotland is designed to ensure the constant availability of beds. We have a problem with delayed discharges. Part of the problem is finding a bed in a nursing home. If the vast majority of nursing home beds are provided by the private sector and the State leases a chunk of it, the system is operated by the State. Therefore, there can be throughput and it makes for efficiency in hospitals as well as in nursing homes because nursing homes know a wing or unit has been leased.

The Scottish health Minister was a proponent of the system. It is not intended to create a kind of "Upstairs, Downstairs" nursing home but rather to give the hospitals and health system the certainty of knowing that beds are available. When a patient is ready for discharge to a nursing home bed, it is available and he or she is not waiting three, four, five or six days or wrestling with fair deal forms or anything else. A person can be discharged in a timely fashion.

It is an aid to the hospital as much as anything else because they know they can put hands on beds, as it were. I would like to see that system investigated. If international best practice suggests it works, we should not busy ourselves trying to reinvent the wheel. If something works in another jurisdiction, we should be take the research and run with it if it is suitable for us.

Mr. John Horan

I am very happy to take that on board as a suggestion. It is something that should be investigated. As I said, if something works somewhere else-----

Mr. Horan might report back to the committee with the findings. It would be very helpful.

Mr. John Horan

Let us not be too precious about things. Deputy O'Reilly raised the question of the report of the Committee on the Future of Healthcare which was issued yesterday. I have been busily scanning through its 191 pages on a screen today.

It was not intended as an unfair question.

Mr. John Horan

I am very happy to take it. We made a detailed submission to the Committee on the Future of Healthcare and I was pleased to see some of our thinking coming through in sections of the report, particularly sections on the continued use of measures such as maximum wait times to ensure patients are treated within pre-agreed timelines and so on. If, as the committee report very clearly does, one sets out a maximum wait of 15 weeks for inpatient, ten weeks for outpatient and ten days for diagnostics, one is going to need some way of measuring it. One is going to need somebody to keep the score. The NTPF is particularly well-placed and that is what we do. We gather information from all the hospitals and we validate it. There were a number of points there, including extending the concept of maximum waiting times for hospital treatment to cover primary and community-based services, for example, and again we are well-placed there. We are a strong and independent agency so we can ensure that kind of data and information is available because if one is going to try to implement that system, one needs somebody to keep check.

I will address the final matter, which was in appendix 4 to the committee's report on the waiting list management. The Chairman referred to this earlier in the context of the National Cancer Registry Board and this is the whole issue of e-health, waiting lists and using e-systems, including services like a patient portal where people can look at their own referral, status and position on the waiting list. That is good. I do not want to keep harking back but we had a system previously that worked very well where, if a person was on a waiting list for more than three months, he or she could ring the NTPF lo-call number, we took their details and straight away we would go and arrange the person's treatment in a private hospital. This is a further extension of that.

Very often, part of the suffering of being on a waiting list is not knowing where one is on the waiting list, for example, am I No. 99 or No. 599? Reminder services by text, integrated referral management systems, and digital discharge solutions can all help, as can, to get back to Deputy Louise O'Reilly's point, a single integrated hospital waiting list management system. These are all the sort of things that the NTPF has the experience of having done, can make better and can be part of the future. I am pleased to see the report and I am pleased to see a general cross-party approach being taken to it so that we do not start chopping and changing, because we have suffered from that in the past.

With regard to the report of the Committee on the Future of Healthcare, we took evidence during our hearings that almost 75% of the activity in some of our general hospitals are coming through the emergency department. Consequently, elective work is being squeezed continually. Mr. Tony O'Brien, in his evidence to this committee, said that in one or two years' time it will be almost 100% emergency work carried out in our hospitals and that less and less, if any, of the elective work has the bed capacity to be delivered in our general hospitals. I would like to hear Mr. Horan's views on that because if that is the case, the National Treatment Purchase Fund will actually be the only vehicle through which we can supply elective care to our patients. When we spoke to the Scottish health Minister, she also spoke to use about how in Scotland the NHS has bought a private hospital in Glasgow which has been designated as an elective-only hospital. That has been so successful that they are building five additional elective-only hospitals in Scotland: a second in Glasgow; one in Edinburgh; one in Aberdeen; one in Inverness; and one in the west of Scotland. Certainly, unless the report of the Committee on the Future of Healthcare is adapted, we are going to run into the situation where only emergency work will be supplied in our hospitals. Our elective lists, as we can see, are getting longer and longer, as are our outpatient lists. It is essential that our system changes.

We are conscious that if we start changing this ineffective system we could destabilise it and start to make our patient outcomes worse. There has been a lot of opposition this morning to the report of the Committee on the Future of Healthcare with regard to disentangling private care and public hospitals. We are doing that with a view to freeing up capacity in our public hospitals for public patients. I would like to get Mr. Horan's views on those comments.

Mr. John Horan

The Chairman mentions the increasing incidence of people going through emergency departments and affecting elective work and the increasing demand that is coming on the services. I was quite frightened to hear Mr. Coffey say that the incidence of cancer is likely to increase by 50% between 2015 and 2025. What are the implications of that for the health service? It is a huge task. I cannot sit here and say that I have all of the answers. I like a lot of what I scanned in the report of the Committee on the Future of Healthcare. Many of the ways forward are there, including points about taking the pressure off emergency departments, some of the points about primary care, and many of the points about dealing with matters in the community rather than in hospital settings. There are many good points there. I do not think I have all the answers, but many of them are in that committee's report.

Can I get clarification on the review? Early June was set as a time for the review on the nursing home issue. I do not want to tie the witness to time now but are we talking about four weeks, eight weeks or 12 weeks?

Mr. John Horan

I am glad the Senator did not tie me to a time. I can tell him that we are very well advanced towards an early June date but that is one stage. There is then another stage where that review between ourselves and the two departments goes into the broader working group that I mentioned with the other parties involved in it. I cannot say what they will do. Our part of it will be done in coming months.

Months rather than weeks?

Mr. John Horan

Correct.

The second issue I want to come back on is-----

Mr. John Horan

As it is such a big question, we have a preference for getting it right rather than getting it done quickly. Does the Senator know what I mean? We could rush it and come out with the wrong answers.

The second question I want to come back on concerns what Deputy Louise O'Reilly said about the delay in getting people out of hospitals and into nursing homes. This is not a problem caused by the nursing homes. When there was a huge problem with many people in beds waiting to be discharged, for example, nursing homes had over 750 vacant beds at the time. There seems to have been very little connection. Nursing Homes Ireland tried to get involved and give assistance, but there was still a very poor response from the HSE. Following on from Deputy O'Reilly's point, there must be a faster mechanism for dealing with this. It is not the fault of the nursing homes.

Mr. John Horan

I have to fall back on this point. The NTPF has a very narrow and clearly defined role under the legislation, which is to agree the maximum prices with each individual nursing home. We are not really involved beyond that and I would almost be going ultra vires to tread into that. I might have my own views on it but I do not think it appropriate that I should necessarily express them.

We might end up not having to buy facilities or operating time in private hospitals if we had beds freed up in public hospitals. It is therefore a matter that should be Mr. Horan's concern since the faster we can get people out of the hospital system and into step-down care, the better and more efficient it becomes.

Mr. John Horan

It might well be a matter of concern to me but as I said, under the Nursing Home Support Scheme Act we have a very specific targeted role. We do not go beyond that. I am not saying that we do not care. We do care but it is really not appropriate that I get involved in that policy area and start expressing views about it because it is outside our legislative role.

I welcome Mr. Horan for appearing before the committee and for his introductory remarks. Unlike my colleague, I believe that both the public and the private health sectors should be cost-effective, efficient and responsive.

There is no harm in having competition between the two in respective areas. I favour the public health sector and I want to see it develop and grow. When comparisons are made, it should not be possible for the private sector to make a profit and deliver the service more effectively, more efficiently and more cost-effectively. That should not be the case. Questions need to be asked about that or we would seem to be bolstering something that is not efficient and effective at all.

From Mr. Horan's own observations, where does he think the incapacity has occurred in the public sector, which in turn causes the overflow to go into the private sector and in particular circumstances that cause the National Treatment Purchase Fund to be called in? For example, as the Chairman pointed out, members have been looking at these issues as they have been sitting on the Committee on the Future of Healthcare for quite a long time now. Incapacity in certain areas seems to be a key issue. What happens next will be determined by others who are outside but who have looked at this. In Mr. Horan's direct experience - in dealing with both sides on the ground, over quite a period of time and in the good times and bad times - why does he think the logjam is caused? Is it a lack of theatre facilities? Is it a lack of nursing staff or a lack of consultants or GPs? Is it a lack of theatre availability? What is it? There must be something causing the problems.

I welcome the move to have the purchase fund in both the public and private sector. That will be a good thing and will sharpen both sides and maybe the patient will become the issue everybody focuses on. That is the way it should be. Long waiting times are not good for the public or the private sector, they are certainly not good for the health sector in general in its public appeal and they are certainly not good for the patient. Waiting times of four or five years, which we have had many times in the past, are appalling. We should never be in such a situation. The questions that arise following on from that relate to particular areas. I know that hip replacement operations is one area that has caused problems in the past. Are there other treatments that show up more regularly than others and which require National Treatment Purchase Fund intervention?

With regard to competition, has Mr. Horan seen evidence of competition between the two sectors in responding to the demands made of them? I know the old argument about people jumping the queue, and Deputy O'Reilly already referred to this. It is one of the questions that comes up from time to time. As public representatives, we ask parliamentary questions about when particular patients will receive treatment, having suffered on a waiting list for two, three, four, five years or sometimes much longer. The general answer is that the clinicians will make that decision. My answer to that is "let them decide quickly". It is as good to do it quickly as it is slowly over a long period of time. Why do we not have a more dramatic response? It goes back to capacity and to staffing levels.

Mr. Horan referred to the fluctuating staffing levels in the NTPF organisation during the downturn in the economy. There was a lack of funding in the public sector in general. To what extent did the NTPF find that demand had fluctuated along with the staffing levels? How did the demand move on the graph and what sort of cases were referred? We all have anecdotal experiences but I can tell the committee of someone who has been waiting quite a long time. The person was on the point of going to the NTPF only in the past couple of months, but there was a breakthrough, for some very good reason, and they suddenly got the treatment. It was challenging treatment but they were able to get it through the public health system. We all must be challenged from time to time so we can do our job well. What were the most common causes that Mr. Horan observed in the creation of the backlogs under the various headings and categories?

I am not a great supporter of the fair deal scheme, for obvious reasons. It has a tendency to be insatiable in terms of how much it costs the patient. People start off life, they may be newly married couples, and they try to raise a mortgage and raise families. By the time they have that barely finished, somebody else has come along and the costs of nursing home care could visit them for a long time in certain cases. The costs could leave them and their immediate families penniless for quite a long time also so I am not a great supporter of that system. I know this system replaced an older one that was a throwback from the workhouses system, and which none of us would ever want to hear of again, but there were long-stay beds in public nursing homes in the fairly recent past. They were efficient, maybe not by today's standards but they gave a very high quality of service when it was available nowhere else. Patients who were in need of the service received the service. It did not cost a fortune. It was only when the times and legislation changed to the effect that people should not receive the service in public hospitals - because there was no legislation to back it up - that as a result we arrived at the system we are in now. The number of public long-stay beds has dramatically reduced in the intervening period. The shifting of that burden has gone from the public sector to the patient albeit in the private sector.

In fairness, Deputies Durkan and O'Reilly have posed some of the questions I was going to ask so I will not prolong my contribution by repeating all that has been said. I welcome Mr. Horan here today and I wish him well in his reappointment. It is a challenging position. I believe that all here have a duty and a responsibility to work together, whether we are politicians, consultants, GPs or unions to try to improve the lot of the patient.

When we consider the National Treatment Purchase Fund and then look at the appalling waiting lists, we must do something. I know that €15 million has been allocated in this year's programme for Government for waiting list initiatives. Perhaps Mr. Horan will indicate when this might be up and running and can he give dates? I understand that a sizeable figure of €55 million has been allocated for next year. Will this be targeted in certain sections or will it be across the board? Has Mr. Horan a target figure for how many people he thinks will be treated and could be taken off the waiting lists?

Turning to the nursing home scenario, in my constituency there have been situations of appalling overcrowding in hospitals such as in Portiuncula Hospital in Ballinsaloe, for example. Despite a competitive and top standard nursing home being out the road, there was no attempt to move some of the patients who could be moved to the nursing home for a few weeks in order to free up space in the hospital. At that time things were so chronic with overcrowding that ambulances were taking people to the Midland Regional Hospital in Mullingar, County Westmeath. They could not even be sent to University Hospital Galway, which is down the road. That is how chronic and bad things were. In a crisis situation such as that why would a nursing home not be used?

There is a whisper going around that some of the nursing homes are being overlooked. It is hard to understand, when one sees that the costs associated with the public nursing home are well above the cost of the private nursing home.

I recently received correspondence about the cross-Border fund. Does Mr. Horan have any comment on that? I was surprised when I read about it that it is not promoted and used more. Better value could be made of it and more people could be dealt with more speedily.

To return to the three-year deals for the nursing homes, revaluation of property is not taken into account. In many parts of the country property is being revalued. There are some hidden costs because if there is a revaluation in the middle of a three-year contract the costs will change. It has been so long since there was a revaluation process in this country that many businesses are shocked by the level of their revaluations.

Mr. Horan said that he has appointed a new chief executive officer, CEO. Who is that person and how much does that cost annually?

Mr. John Horan

I thank the Deputies for their questions. In response to Deputy Durkan's question about lack of capacity, I am aware that the programme for Government does contain a commitment to undertake a bed capacity review to feed into the Government's mid-term review of its capital plans. I understand that review will have a wider scope than previous reviews and will extend across hospitals, primary care and social care. The Department of Health is leading that review under the direction of a steering group which includes officials from the Departments of Health, the Taoiseach, and Public Expenditure and Reform, the HSE and experts with clinical and academic backgrounds. It is fairly wide-ranging and involves an independent peer group of international health experts who will review the methodology and findings and so on. We are not directly involved in that, but we are available to support it and look forward to seeing its findings which will come out later this year.

There are two factors that caused the lack of capacity, one is the well-known financial crisis when there were cutbacks here and there, resulting in ward closures, reductions in staff, nursing and consultants, all the shortages that are well-rehearsed. The other element is on the demand side which is increasing dramatically. Last year, 60,000 more inpatients were treated than in the previous year. I am not apologising for a system that I am not responsible for but I do feel its pain to an extent.

In response to the point about the long-stay beds in public hospitals, I take it the Deputy is talking about the old town hospitals. I was a great supporter of those and have personal experience of them through my extended family. Some fell victim to what one person might call improving standards while another might call them increasing standards, which found them unsuited to their purpose and they fell out of the system. That added to the lack of capacity. A total of €15 million of the €50 million available this year is available to the NTPF, the rest goes to the normal hospital system. We have been out of commissioning patient treatment care for a few years but we are back into it. We started by getting expressions of interest from private hospitals, drawing up contract documentation, analysing the specific treatments we would target. We identified the top 25 and went out to tender on those. We got the tenders and we have started to give out that work. We will soon have close to 2,000 patients in the system with case authorisation notices, CANs, purchase orders in layman's terms. More individuals will come into the system very quickly. That accounts for the first €5 million of our €15 million. The second €5 million goes to the public hospitals, the third €5 million might be a combination of the two. Next year, we will have €50 million available and what we do with that will be informed very much by what we have learned in the current year.

As to why nursing homes are not used, I am very familiar with their situation and receive regular calls telling me they have beds available and so on but it is not the NTPF's decision. That is not our role but I would not be against using them.

In addition to the cross-Border fund, there is a European system and it is not as fully utilised as it might be. It is advertised to an extent on the Department of Health or HSE websites. It could be used more. We do send some work to the North of Ireland but the bulk of it is within the State. I would be worried about the impact of Brexit and I know this committee has had discussions with the Department of Health and the HSE about the impact of Brexit. While it does not have an immediate impact on the NTPF we do need to be very conscious of it to make sure it does not affect us adversely.

In respect of the new CEO, before we moved back into commissioning we had been operating with a reduced staff because we had a reduced budget and were not going to spend money we did not need to spend. We moved from having a full-time CEO when we were doing treatment of commissioning to having several part-time CEOs, working one day a week, for the past four or five years. When we saw we were getting back into patient treatment commissioning we realised we needed to beef up the systems again. Some of our staff had gone on secondment to other areas of the health care service and we want some of them back. Some have settled in where they are but we will need to replenish our staff, not quite to the level it was at before. We will see how we get on. We are in that process. As part of that we decided we needed a new full-time chief executive late last year, when we saw the budget had allocated us the money for that. We advertised in November through the Public Appointments Service to make it an open and transparent competition but that takes time. Big systems move slowly. We then selected a very well qualified chief executive, Liam Sloyan. It was clear, however, that he was wanted where he was. In a previous existence he was chief executive of the Health Insurance Authority, HIA, and since 2013, when the national lottery was sold off and the office of the regulator of the national lottery was set up, he was appointed to that role and has been there ever since. He joined us four weeks ago. He got his feet under the table quickly and, working with the board and the executive team, he is gearing up for our move back into patient treatment commissioning. The cost had to be approved by the Departments of Health and Public Expenditure and Reform and is in line with the chief executive levels for a body of our size, a grade 3 body.

What would that be?

Mr. John Horan

I do not have the figure for his salary off the top of my head but it is in line with general standards. There is no big bonus system. It is a standard, approved level of the order of €120,000.

There is no bonus structure attached to it, of which Mr. Horan is aware?

Mr. John Horan

I am aware and there is none.

What are the main procedures purchased by the National Treatment Purchase Fund? Will Mr. Horan gives us the total number treated in the past year or in a defined period?

Mr. John Horan

We have not been commissioning inpatient treatment. In recent years, if we had some funds left in our budget, we usually worked with the Department and the HSE on scopes, which we find to be a very effective way to spend money. It is a low-cost but very effective procedure in that if something is found, a bigger problem down the line is prevented. Of what we spend our money on, among the top ten procedures are cataracts, cystoscopies, the surgical removal of teeth, coronary angiography, varicose veins and skin lesions. We have identified the top 25 procedures and are targeting them to begin with in spending the first €5 million. We will build from there.

Is there an obvious inability in the public sector to deal with these particular illnesses? I would have expected hip replacement procedures to be high on the agenda.

Mr. John Horan

The Deputy is right. I should have said we had started spending the first €5 million on day cases. Hip replacement operations are obviously performed as inpatient procedures. We have done it in the past but not in recent years. We are starting with day cases.

The most pressing cases involving the longest waiting times are patients with far more serious conditions but day cases have been prioritised in spending the first €5 million.

Mr. John Horan

Correct.

Would it not have been better to prioritise the most serious cases in spending the first tranche of money?

Mr. John Horan

Focusing on day cases frees capacity in hospitals which can then deal with what they should be dealing. Certainly Deputy Louise O'Reilly would argue that they should be dealing with such cases. We are freeing capacity for them. In reducing pain and suffering for individuals we can deal with far more by going for lower cost procedures to begin with and build from there. We only have €15 million, with €5 million in this phase. We will not solve a waiting list problem with this money, but it is the beginning of the process. When we receive our €50 million next year, we might move towards what the Chairman is speaking about.

A patient undergoing a hip replacement would never occupy a day bed. An inpatient would never occupy a day bed. From what I can gather, the easiest cases are being dealt with first.

Mr. John Horan

The Chairman can phrase it in that way if he likes. We carried out a major review with the Department of Health and the HSE and together we have decided that this is the most effective way to spend the first tranche. I emphasise that it is just the first tranche.

I thank Mr. Horan very much for coming before the committee and wish him the best of luck in the continuation of his role as CEO of the National Treatment Purchase Fund. We may very well engage with him in the future as we see the level of engagement in the roll-out of the report of the Committee on the Future of Healthcare.

Sitting suspended at 3.45 p.m. and resumed at 3.50 p.m.
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