New body to monitor health spending

The Department of Health has proposed the establishment of a new inter-agency group which will seek to ensure value for money on health service projects.

Department of Health secretary general Michael Scanlan said the group could initially focus on areas such as pharmaceuticals, procurement, estate management, employment management and administrative spending. He said consideration could also be given to providing a role for the new group "in respect of adherence to the various value-for-money requirements laid down by the Minister for Finance in respect of capital investment, expenditure on information and computer technology and on consultancies".

Mr Scanlan proposed that the group would be chaired by himself and would include the chief executive of the Health Service Executive (HSE), the chief executive of the new Health Information and Quality Authority and a senior official of the Department of Finance.

"I would see this as an overarching group which would meet regularly, perhaps every two months, to receive reports on actions being taken and progress being achieved in relation to value for money across the full spectrum of the health service delivery system and to suggest or drive further initiatives in this regard," he said.

Mr Scanlan said the group would provide a further level of assurance to Minister for Health Mary Harney, the Department of Finance and the HSE board that "value for money in health spending was getting the required attention".

In a letter to HSE chief executive Prof Brendan Drumm, Mr Scanlan said they were both aware of "the generally negative public perception of health service spending and the argument that the large increases in health spending over the past number of years has not translated into improved service delivery on the ground or improved population health outcomes".

He said the department was addressing this in a number of ways, including the revision of the National Service Plan which sets out how money for the health services should be spent.

"However, I believe that we need to do more if we are to respond adequately to one of the central conclusions of the Brennan Report [ the report of the committee chaired by Prof Niamh Brennan which was part of the blueprint for reform of the health service] viz, that there is too much emphasis on the annual incremental additional funding and that not enough attention is being devoted to the very substantial core funding and the scope for ensuring greater value for money and cost effectiveness from that funding," he said.

Value-for-money rules put in place by the Department of Finance last year for projects costing more than €30 million have led to delays in several projects, including the long-planned development at Longford-Westmeath General Hospital in Mullingar.