NEWS FOCUS:The former Eircom chief faces a mammoth task in cost cutting and managing the organisation that accounts for 27 per cent of the country's budget
THE MAN headhunted to become the next chief executive of the Health Service Executive (HSE) faces an unenviable task.
Cathal Magee, who takes over from Prof Brendan Drumm in September, will become boss of an organisation which has long had a poor public image, only to be dented further in recent days by its inability to provide figures for Government on how many children died in its care over the past decade.
While journalists may have taken some consolation from the fact that it’s not only they who often find it impossible to get information out of the HSE, what happened shows how disorganised the executive is – with lots of managers but no one really putting their foot down and taking charge.
This will be the first major hurdle to be crossed by Magee (56), who has a background in banking and management.
He will need to restore faith in the organisation by sorting out its management structures, which result in those on the ground in the regions being unable or afraid to take decisions, leading at times to long delays before problems are tackled.
Minister for Health Mary Harney put it simply yesterday when asked what the greatest challenges facing him were. “Management of the organisation,” came her reply, “particularly in the context of less money next year than we have even this year . . . the Minister for Finance has made it clear that the Government will be looking for €3 billion in cuts in public expenditure”.
His second major challenge will thus be cost cutting. He comes to the job at a time when the poor state of the country’s finances has seen about €1 billion taken out of the health budget this year, with worse to come next year, as Ms Harney made clear.
The HSE has already drawn up a service plan which will see 1,100 acute hospital beds closed this year. It is also planning significant cuts in home help services, is trying to run some services on a skeleton staff thanks to the embargo on recruitment in the public sector, and is shutting down long-stay beds in the community – blaming inspections from the Health Information and Quality Authority (Hiqa) in at least one instance when it couldn’t provide the money to make the improvements recommended by Hiqa. In addition, he will have to ensure some 1,500 staff are taken out of the public health service each year.
Additional cost-containment measures, over and above these, may be required in coming months. This is because the HSE is currently unsure by how much hospitals may have overspent in the first few months of the year as it has received no financial returns from staff due to industrial action by Impact.
The dispute was resolved early last month, but if predictions are true that there could have been a €200 million overspend when the figures become available, a new round of cost-cutting measures will have to be implemented.
Mr Magee has a solid track record in cost cutting. He started a major restructuring of Eircom’s cost base, following negotiations with its trade unions, when he was acting chief executive of the company last year.
Ms Harney said yesterday while the challenges were “major”, he comes with enormous experience of management. “He’s taking on something I think that’s daunting at one level, but I think he’s more than aware of what the challenge is.”
Part of Cathal Magee’s workload will also include dealing with a myriad of unions representing more than 100,000 staff. Many nurses, in particular, are totally opposed to the Croke Park pay deal, which would provide for the redeployment of staff within a 45km radius.
He will also face the challenge of trying to standardise services across the State, modernise the HSE through greater use of IT, and continuing with the reconfiguration of acute hospital services begun during Prof Drumm’s five-year term of office.
Next up for reorganisation are services in the southeast and midlands, following the reconfiguration of services in the northeast, midwest and south. While the public now largely recognises the need to concentrate certain services and expertise in regional centres, fears that the HSE will take away some services in the name of reform without ensuring better facilities are first put in place abound in the current economic climate.
And there’s also the likelihood that some services will have to be reconfigured sooner than planned due to a significant shortage of junior doctors at hospitals around the State.
Emergency departments at some hospitals may be closed or have their opening hours curtailed, and some operations may have to be cancelled due to shortages in the speciality of anaesthesia in particular.
Some might say no money could make anyone want to do this job – being boss to thousands of staff and accountable for an annual budget of about €15 billion while being answerable in the public eye for every adverse event and all the blunders that take place in the organisation.
But clearly Mr Magee, who left Eircom in February after 15 years with the company, thought a salary of €322,000 was not to be sniffed at. He’s to be paid the same amount as Prof Drumm now gets after the pension levy and other public sector pay cuts, but that’s about €100,000 more than Ms Harney initially said the new chief executive would be paid.
She acknowledged yesterday it was a big salary but, defending his pay packet, she said chief executives of health services around the world were paid “substantially more”.
“When the HSE board sought to recruit a chief executive officer they learned very quickly that the recommended salary, which was €100,000 less than is being paid to the new chief executive . . . was not a salary that would have attracted somebody they believe was capable of doing the job that we need to do, and given that he manages 27 per cent of the Government’s budget, the decision was made to pay the same salary as the outgoing salary of Prof Drumm, minus the bonus,” she said.
€15bnis the annual budget for which Cathal Magee will be responsible
€322,000will be Cathal Magee's salary