Monday 15 October 2007

HSE Cuts: Right or Wrong?

When the HSE announced cuts in its budget a few weeks ago the media went into overdrive. Health is always a great story - particularly if it gives the papers a chance to put the words patient and suffer in the same headline. In all the hsyteria, the real issues around the HSE cuts got very little coverage.

The first is that the HSE has genuine issues around its budgeting. Apparently it always works off a yearly budget which means that it is very hard to smooth out a the demand function which varies a great deal from season to season and also from year to year. Then there are random spikes - say a flu epidemic or just by chance a clustering of demand for hip operations.

Demand is easier to predict in say houses because the economic model for doing so can be soley based around the price signal. If taxes decrease or wages go up, demand will increase, and so on. And trends in these drivers are easier to establish.

But no granny I know chooses to slip off the chair when hanging up the curtains. And I cannot recall an of my relatives deciding to go into cardiac arrest : it just happens. These are events that happen randomly. Over a certain time period a distribution appears to take shape, but the volume on a given day or month is bursty with peaks that often jump far from the average. It's like watching traffic on the M50. You know that statistically 3000 cars per hour will pass. But it's hard to predict how many will pass in any 10 second period.

Similarly with illness. And so the HSE definitely should not be working to a yearly budget but perhaps a 3 year budget. Perhaps some aspects of the budget might even have a 5-year envelope.

Even so, the HSE needs to put better systems in place to help predict and manage spikes in demand. But the media aren't interested in such mundane matters.

The second issue relates to the fact that even if the HSE had better management, certain hospitals would overspend. In these cases the HSE cannot, as the media and many punters would have it, simply write a cheque to cover the increased costs. It is a plain truth that any system will sprout further inefficiency if its managers know that when it overruns, it simply has to shout for more.

Anyone who has seen work practices in our hospitals knows that, to put it kindly, we need to work on efficiency. This can never happen unless the HSE stands firm against demands from hospitals which have overrun their budgets. If they do anything else, the cost base will run off the graph with no real return to patients.

This is not a debate about the overall health budget - that is another matter. And as Mary Harney has pointed out, it is often difficult for the person in the street to understand the complexities of managing the biggest single orgranisation that the state runs. We are talking about a hugely diverse complex system that consumes a budget of 14 billion and which employs over 100,000 people. It is massive.

But sadly the media will do little to help bridge any gap in understanding. The last item I saw on RTE had a clip of Mary Harney with a voice over about the cuts. There followed contributions from hospitals, health employees, patient focus and finally a typical opportunistic response from FG - all with an interest in opposing the cuts. But no HSE spokesperson. No objective media analyst. In short no debate about health, merely alarm about cuts.

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