Health savings top €400 million in second year of Croke Park deal

Health service staff delivered non-payroll savings of over €238 million in the second year of theCrokeParkagreement, with payroll savings of over €165 million bringing the total to €404 million. This represents 43% of all the savings achieved in the second year of the deal.

The second annual report of the Croke Park implementation body, published today, identified €891 million in annualised payroll and non-pay savings delivered across the entire public service in the second year of the four-year agreement. This is in addition to savings of €597 million achieved in the first year, giving a total of €1.49 billion in ongoing annual savings so far.

The largest number of staff reductions – over 8,000 – has been in health, although the percentage reduction of 7.4% is the second lowest in the public service after education.

The report said over €82 million of the health service savings followed the creation of a single national procurement system underCrokePark. Other non-payroll savings came from improved drugs and medicine cost management and in maintenance, catering and cleaning.

The report also highlighted reduced clinical and diagnostic costs achieved through service reconfigurations, some of which involved the redeployment and reassignment of an estimated 4,500 health workers last year. These included 133 redeployments to the primary care reimbursement scheme (PCRS) and over 600 staff relocations inCorkacute hospitals. Significant redeployments also occurred with the amalgamation of laboratory services in Louth and in northDublinmental health services.

The implementation body said roster changes had been introduced across the health service and highlighted the examples of the central mental hospital, where they are saving an estimated €1 million a year, radiography (€2.5 million a year), medical laboratories (€7 million a year), and Dublin north east addiction services (€500,000 a year).

Revised catering rosters and extended working days for in-patient departments were introduced in theNationalMaternityHospital, while revised environment service rosters in Saint James’s hospital are saving €135,000 a year by eliminating evening and weekend overtime. The report says nursing roster changes have been introduced in “virtually every setting throughout the country” to maintain service and activity levels as staff numbers fall.

Significant extended working day agreements were reached in medical labs, radiography, Dublin-Mid Leinster community and hospital initiatives, the Mater hospital, Wexford andWaterfordphysiotherapy departments and Sligo-Leitrim dental services. On top of the centralisation of procurement and medical card applications, examples of smaller-scale centralisation of support services included medical typing in the Rotunda and Dublin South Central admin services and appointments.

The report also acknowledged comprehensive changes in clinical programmes, child and family services, mental health and services for the elderly, which are being facilitated byCrokePark. And there were significant savings and reforms in voluntary sector organisations covered by the agreement including Saint Michael’s House and Cheeverstown House.

The report notes that, between 2009 and 2011, acute hospitals have spent 11% less while doing 10% more, with the cost per discharge down by 20%. Teaching hospitals report 17% more activity per €1 million spent in the same period. Dublin maternity hospitals spent 8% less while recording a 7% reduction in cost per birth and a 15% reduction in the cost of inpatient discharges, which increased by 9%

Despite an overall budget cut of 4.8%, and staffing reductions of 2,855 between April 2011 and March 2012, activity in the health sector has increased. Hospital in-patient discharges were more than 14,000 above target last year and the number of day cases increased by 19% between 2009 and 2011.

IMPACT general secretary Shay Cody said it was now impossible for critics to argue with any credibility that the agreement was not delivering. “€1.5 billion of recurring savings is a substantial contribution by public servants, who have also suffered an average 14% pay cut since 2009. Today’s report shows we’re ahead of Government and troika targets on public sector staffing and payroll savings. It also gives examples of reforms delivered, including significant changes to working practices, some of which – like reduced dependence on overtime and other premium payments – are themselves cost-reducing,” he said.

But Mr Cody warned against complacency. “We are on target to reduce the public service pay bill by €3.3 billion a year. But it has not been easy and it will not get easier, not least because the economic challenges facingIrelandare not abating and could well worsen. As well as delivering savings and reforms, the agreement’s staff protections have also been effective, so workers should not fear the report’s call for accelerated delivery of reforms.”

Noting that public service staffing had fallen by 17,300 in the first two years of the agreement, Mr Cody called for a more flexible approach to the public service recruitment moratorium to ensure that key services are prioritised and maintained as the public service pay bill continues to fall.  “We should take courage from the achievements and develop a more imaginative approach to the operation of the recruitment embargo.  With a further reduction of 9,500 staff targeted between now and the end of 2015, we need to address and resolve fears about service quality and continuity,” he said.