'Fair Deal grossly under-provided for'

[Posted: Fri 10/06/2011 www.irishhealth.com]

The last Government 'grossly under-provided' for the Fair Deal scheme this year , Health Minister James Reilly told the Dail yesterday.

He said a series of factors, including greater than expected demand for the scheme, had created significant difficulties.

The Fair Deal system, he said, would recommence processing approvals from Monday. The HSE would start by giving approval to those applications processed to final stage over the last few weeks in the chronological order received.

However, the Minister said his review of the scheme showed that the amount of money reallocated from Fair Deal to other services was less than the €100 million originally indicated. He said in future there would be more rigorous monitoring of the scheme.

The Minister said his Department has estimated that the total number of people covered by the Scheme by year end should be almost 24,000, i.e., a net increase of 1,700 compared to mid-May. This increase will be financed out of a range of savings.  

The Minister said preliminary indications also suggested that ancillary services, such as physiotherapy, occupational and speech and language therapy, and drugs, which were not intended to be included under the umbrella of the Fair Deal, were in fact being funded by the Fair Deal subhead or 'pot' of money.

"While it is absolutely clear that these services were being provided to residents in nursing homes, this practice had nonetheless also contributed to the emerging deficit in the Fair Deal scheme."

He said payments from the Fair Deal subhead had been used to cover ancillary services such as therapies, drugs and medical services. It was initially estimated that the total cost of these ancillary services was around €100 million. However, further examination by the HSE has indicated that only €48 million of ancillary costs were billed to the Fair Deal subhead or pot.

Dr Reilly said his review of the finances of the scheme showed a number of factors were putting pressure on the overall Fair Deal budget for 2011.  Among others these included an increase in nursing home costs and
an unexpected and so far unexplained increase in the average length of stay for nursing home patients.

This was 2.5 years in 2009 and has now risen to four years, resulting in higher net demand for nursing home places.

The Minister said as a result of these and other factors, his review indicated that Fair Deal was likely to face a deficit of €36 million this year, even if there were no net additions to the Scheme for the rest of the year.

The Minister said savings which would be used to fund the scheme for the rest of the year would come from  expected savings of up to €30m which will be made in non-service related spending. In addition, long stay in-patient charges, which have not changed since 2008, and should be increased annually, will also be increased so as to realise additional income of some €12m in a full year. 

Dr Reilly pointed out that despite the current economic climate, private nursing homes received price increases over the last nine months and the annual cost of these increases was of the order of €20 million.

"These increases are not sustainable in the current financial situation.  I have instructed the National Treatment Purchase Fund (NTPF) to renegotiate the price increases for private nursing home beds, which were negotiated by the private nursing homes last year, with a view to producing further savings." 

The Minister said the financial review of Fair Deal to date has not been as definitive or as comprehensive as he would wish.

"In the short term, I have asked the HSE to put in place additional and more rigorous governance and reporting measures. My own officials will monitor closely developments over the remainder of the year.  I will also consider whether external auditors should be used to help bring greater clarity to the situation in the future."

The Minister said he also wanted  to identify the reason behind the unforeseen increase in applications to Fair Deal, the increase in the average length of stay in nursing homes, and some of the unexpected monthly variations in approvals under the Scheme. 

"I am requesting the HSE to undertake a clinical audit on the appropriateness of care and admission."

The Minister said over the longer term he was determined that there should be a full review of the Fair Deal scheme, as outlined in the Programme for Government.

This review would look at the ongoing sustainability of the Scheme, the relative costs of public versus private provision and the balance of funding between residential and community care.

Fair Deal will recommence on Monday