Troika recommends cuts to specialist doctors' salaries

THE TROIKA HAS strongly criticised the Irish health service, saying that continued “slippages” and “delays”  in implementing reforms have led to “spending pressures” contributing to the near €400 million budget overspend last year.

A leaked European Commission document, seen by TheJournal.ie, reveals a litany of problems within the health service with the Troika highlighting the issue of the overspend in health throughout the 88-page review of Ireland’s bailout programme.

The cost of drugs and the issue of pay come in for particular scrutiny with the EU-IMF mission saying that “high remuneration” pay for doctors “may warrant attention” and suggesting the government could “review the fees and salaries paid to medical professionals”.

It also raises the possibility that the government could address a shortage in medical specialists by hiring qualified candidates from other EU countries.

“All options should be kept on the table” when it comes to addressing savings in the public service pay and pension bill, the document says, adding that pay scales and allowances should be an option for review in addition to the anticipated reduction in staff numbers.

The EU-IMF mission says that additional spending pressures by the end of last year and the unwinding of temporary measures in the year ahead means there is a structural gap of around €700 million that needs to be addressing.

There was an estimated overrun in health spending of around €370 million by November last year and the document notes that commitments made by the government to address the overrun in the health were “only partly implemented”.

“Health measures were specified to address the health overruns, although their implementation and effectiveness was not as anticipated,” the Troika says.

Drugs and pay

The cost of drugs and the amount paid health service workers come in for particular scrutiny in the document with the Troika outlining ways in which these could be addressed.

It suggests that the government puts in place a so-called “claw-back mechanism” where a rebate is charged on pharmaceutical companies on a quarterly basis as happens in other EU countries.

The Troika also suggests that the health service should promote greater use of generic dugs and ensure prices of medications are more in line with other countries pointing out that the health service’s drugs bill is 34 per cent more per capita (individual person) terms than the EU average.

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Salaries paid to staff working in the health service come in for particularly scrutiny from the Troika which says that the “high level of remuneration of doctors, in particular specialists” is an issue which “may warrant attention”.

Though it does note the pay cuts and changes to work practices already agreed with hospital consultants it suggests that a more “comprehensive” review should be considered and also suggests that a shortage in specialists could be addressed by hiring from abroad.

“There may be value in strategies to further open the supply of labour to suitably qualified specialists from other countries,” the document says.

It cites figures from 2007 to 2011 which show that Ireland recognised 151 intra-EU qualifications for doctors per million inhabitants in comparison to the UK where it was 205 per million inhabitants.

Reforms

The document contains numerous references to the continued “spending pressures” in health with more general discussions about fiscal policy consistently referring back to the overruns in health in addition to social protection.

The Troika says that a “significant scope remains to increase the efficiency, cost-effectiveness, monitorability and sustainability of the health system” and identifies a number of key reforms announced last year that need to be implemented in the coming months.

These include the expansion of after-hours services by GPs, the introduction of a unique patient identifier and fuller recovery of the costs incurred from treating private patients in public hospitals.

The document notes that charging all private patients in public hospitals was a measure not adopted by the end of last year and for which there is no timetable for implementation this year.

The document lists the detail of the €780 million budget adjustment identified for this year including anticipated savings of €308 million from payroll cuts and €145 million from dealing with the pharmaceutical industry.

The Troika says there are “significant implementation risks” arising from the measures proposed for this year but says they need to be implemented “swiftly and fully”.

In a letter of intent from the Irish government, Finance Minister Michael Noonan and central bank governor Patrick Honohan say that they are “alert to the overruns experienced in the health sector, and are taking structural measures to correct then in a durable manner”.

They make a commitment to contain costs in the health service to within the €13.6 billion budget for this year.

- additional reporting from Gavan Reilly

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