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Tn January 2006, I wrote in this column that double-digit increases in the health budget would be possible only as long as the economy powered ahead and that we could be confident about the outlook for that year, but as the economy matured and growth rates slowed, our ability and willingness to continually raise health spending would be severely tested.

The events of recent weeks suggest we are at or close to a tipping point. With confidence and cash looking increasingly scarce, and the Government signalling that public spending growth is about to be reined in, the question of how our health services should and will respond is now in sharp focus.

The strength of the economic boom meant these issues were largely ignored for most of its duration. From 1991-2001, Ireland was rocketing up the international economic league table, driven forward by overseas money for inward investment, buoyant markets for all the new goods and services it was producing, and a variety of home-grown competitive factors which gave the country a significant advantage over others.

All together, these things then made possible massive increases in public spending, not least on health services, which now absorb every cent raised from income taxes.

Confidence is ebbing

However, tax revenues have been buoyed increasingly by a strong housing market, which is now slowing sharply, largely because interest rate rises have been making money more expensive to borrow, and partly because confidence in the global economy has been ebbing for some time.

The key problem for public services is that as long as the coffers are full to overflowing, there is neither appetite nor incentive for stakeholders to make hard choices on how services are funded and delivered.

By the same token, a public that has grown used to the idea that health spending should spiral forever higher, finds it hard to lower its expectations for the future, or to demand better performance in the present.

Lopsided debate

Hence the lopsided debate that followed the announcement of a ban on the recruitment of front-line health personnel by the HSE.

At the beginning of the week, there was widespread concern that a run on the international financial system could dent confidence enough to trigger a recession in Ireland, with all of the consequences this would have for health spending.

Yet by the end of it, many seemed to have forgotten the point that a serious economic slide would severely impair the ability of the Government to keep lorrying money into the health service. This at the very time when demands for extra spending in every direction remain strong, while confidence in the mechanisms for spending it wisely and well is absent.

In a sense, this helps to explain the public annoyance which greeted the announcement that significant bonuses had been paid to senior health service managers, including an award of €80,000 to the CEO of the HSE.

At one level, the public was aghast that all of the extra money in the public health services appeared to have delivered so little, regardless of any evidence that might be produced to show the opposite was the case.

On another level, people were asking if layers of managers with titles that border on the Orwellian, should be paid extra for work which they were supposed to be doing anyway, and whether performance was as good as was being claimed given that a recruitment freeze was necessary to rein in the overspend that could and should have been avoided in the first place.

If the HSE is to continue the policy of performance-related pay, then the benchmarks to be achieved to qualify should be made simple, clear and explicit at the beginning of the year.

Ambitious timeframe

The bar should be set high enough to ensure that goals, which may take a number of years to fulfil, will be achieved within a realistic, but nonetheless ambitious timeframe.

To ensure that best practice in new services is spread quickly, there should be a part of the overall bonus, which is linked to the performance of the entire group, rather than it all being tied to individual achievements. The key outcome is that patients, clients and the public should know exactly how services have improved and where they can be accessed.

Achilles’ heel?

Up to now, the idea of managers asking who does what, where, why and at what cost in the health service has been off-limits. In the context of a reformed performance pay regime, those core questions would be well worth asking and action taken on foot of them well worth rewarding.