Stormont’s Department of Health has pledged £800 million in savings after admitting it is overspending by £2 million a day.
The reset and recovery plan announced by the department aims to put the health service on a sounder financial footing, but will require saving 12% of the current HSC budget.
Former health minister Mike Nestbitt acknowledged this could not be done in a year without making significant cuts to front line services, so a decision was made to spread it across three years.
Mike Farrar the Permanent Secretary of the Department of Health.
This leaves a 4% saving (around £266 million) to be made by health trusts every year for the next three years.
Trusts are being encouraged to reduce temporary staffing, standardise care pathways, shorten hospital stays and reorganise services to deliver savings.
Highlighting the £2 million daily overspend, Mike Farrar, the permanent secretary of the Department of Health, said: “No organisation or household would exist on that basis, and so we have to take action to bring ourselves under financial control.
“But also, in doing so, we believe that we can improve services because we are spending too much of our money on the wrong things, and we need to be spending that in community, in prevention, in primary care, in the voluntary sector, to help people avoid the problems of going into hospital as a consequence of that.
“So this is really important that we get this message across. We are doing both things – financial sustainability and improving health outcomes.”
Asked about the impact of the measures on patients, Mr Farrar said his view is that they can happen “whilst transforming services, and that means that we can actually improve some of the experience for patients as a consequence of following the reset plan”.
“Last year we were able to begin the process of our reset, and so we looked at some, sometimes called low-hanging fruit, at those areas where we could make initial savings,” he said.
“The more we move into this – and we have to do this on a continued basis for a while to get ourselves back into balance – we’re looking at the re-provision of services to avoid people having to be in hospital because we’ve developed community alternatives.
“And so we believe that actually this goes with the grain. Most people do not want to spend a lot of time in hospital, they much prefer to have care close to their own homes.
“We know we can provide that and we can do that more cheaply than having people sat in hospital beds.
“So (it’s) really important to understand this is about transformation, not just reducing service costs.”
Within the Four Nation NHS jurisdictions, Northern Ireland falls behind in terms of key health metrics such as elective waiting times, access to primary care and ambulance handover times.
The Department of Health’s position is that this cannot be fully attributed to Northern Ireland’s current funding level or demand on the health and social care system.
Executive political parties are still to agree a budget for the current financial year, with departments operating on contingency budgets.
Health has drawn an increasing percentage of Stormont’s overall financial package, although this rate has slowed over the last two years.
Fears are that if current trends of overspend continue, health will continue to take up an ever-increasing portion of Northern Ireland’s available budget.
Asked if he felt the Executive is “dragging its feet” on agreeing a budget was impacting the department, Mr Farrar said “ideally” they would have had a multi-year budget.
“We have to live with the fact that we don’t in the circumstances that we’re in,” he said.
“But even on the levels of budget that were proposed, had we had a three-year budget, we would have still been in a situation where the health service was spending in excess of its budget.
“So we would have had to have looked at this situation.”