Health and care services

Spending and quality in health

201108WC1_15 Publicpolicy.ie economist Paul Redmond suggests that cutting absenteeism and reducing the average of length of hospital stays can deliver better services for patients alongside savings.

Health spending in Ireland is under continued scrutiny as the HSE embarks on a €666 million cost-cutting exercise in 2014. At first glance, this figure seems quite severe. However, it may not be an unreasonable target given Ireland’s relatively high health expenditure in comparison to other OECD countries.

The challenge is to mitigate the effect of future expenditure cuts on Irish hospital performance and service delivery. Tackling the problem of absenteeism in Irish hospitals could yield considerable savings without disrupting services. A focus on reducing the average length of stay could reduce the average cost per patient and free up hundreds of thousands of hospital bed days per year.

It is important that we get a handle on our health expenditure now as an ageing population will add significant pressure on the health system in the coming decades. Currently, Ireland has a very favourable age structure with the sixth youngest population in the OECD (in terms of the proportion of over 65s). However, this is set to change dramatically with the OECD predicting that the proportion of over 65s in Ireland will increase from 11 per cent in 2010 to 26 per cent in 2050.

In comparing health expenditure across countries, it is important to take account of age demographics as older populations typically require more health care. Applying a simple age-demographic adjustment reveals that Ireland has the highest public health expenditure of the 34 OECD countries. However, despite the high level of health expenditure, Irish hospitals appear to be less efficient than their OECD counterparts.

The OECD attempts to gauge hospital efficiency by examining average length of hospital stay (ALOS) across countries for patients with acute myocardial infarction (a heart attack). Ireland ranks quite poorly along this metric with the eighth highest ALOS among 33 OECD countries. The current HSE target for ALOS of medical patients is 5.8 days. However, this target is not being met.

In 2012 ALOS for medical patients was 7.2 days and the figure for January to August 2013 is 6.8 days. The potential benefits of reducing ALOS are significant. For example, a one-day reduction in overall ALOS could free up 604,000 hospital bed days, allowing an additional 128,000 inpatients to be treated per year. With this in mind, it is important that government remains committed to improving primary care services in the community to promote shorter hospital stays and shift treatment from expensive inpatient care to less expensive outpatient care.

The level of absenteeism in the HSE is too high and needs to be addressed. The majority of hospitals record absenteeism rates far in excess of the HSE target of 3.5 per cent. In the HSE September 2013 Management Data Report, 137 hospitals and local health offices are ranked in terms of absenteeism rates recorded in August 2013.

Of the 137 locations, 105 (77 per cent) recorded absenteeism in excess of the 3.5 per cent target. The worst performing hospitals include Lourdes Orthopaedic Hospital, Kilcreene (9.36 per cent), Louth County Hospital (8.83 per cent) and

Mid-Western Regional Hospital, Nenagh (7.9 per cent). It is apparent that the high absenteeism rates are being driven by certain staff categories as shown in the adjoining table. Medical and dental staff rarely record high levels of absenteeism whereas the figures for nurses, management and support staff are persistently high.

It is likely that a reduction in absenteeism rates would lead to savings in overtime payments and payments to agency staff. A cursory analysis of the 2012 data reveals that a one per centage point increase in absenteeism rates is associated with a 1.47 percentage point increase in agency and overtime costs as a percentage of total pay. Overtime and agency costs for nurses and support staff alone totalled €212 million in 2012. Therefore even a modest reduction could produce substantial monetary gains.

It is important to maintain a focus on hospital efficiency and service quality in the face of budget cuts. Increases in the ALOS in Irish hospitals would be unacceptable given that Ireland already appears inefficient in comparison to its OECD peers.

Where possible, savings should be made in areas which do not compromise quality of service. Improvements have been made in reducing absenteeism and further reductions should be a priority.

OECD comparisons

‘Expenditure and Outputs in the Irish Health System: A Cross Country Comparison’ analyses expenditure and outputs in the health system and compares Ireland to other OECD countries. Publicpolicy.ie carries out independent research and communicates the results to make it as easy as possible for interested citizens to understand the choices involved in policy issues. The research is available at www.publicpolicy.ie/health

Absenteeism by staff category (June-August 2013)

Staff category Absenteeism (%)
General support 5.43
Nursing 5.33
Other patient and client care 5.29
Management and administration 4.53
Health and social care professionals 3.72
Medical and dental 1.09

Source: HSE Management Data Report, September 2013

Show More
Back to top button