Health service guaranteed to have ‘substantial deficit’ in 2024, Oireachtas committee hears

The health service is guaranteed to have a substantial deficit in 2024 and end up “barely standing still” over the next two years due to Government “mismanagement”, the Oireachtas Committee on Health has heard.

Sinn Féin TD David Cullinane made the criticism near the end of a three-hour meeting, where Minister for Health Stephen Donnelly outlined the need for a bailout for the health service for 2023 of almost €1 billion.

Questions were raised as to whether this sum was enough, and opposition TDs highlighted stark divisions within Government between the Department of Health and the Department of Public Expenditure and Reform (DPER) over funding for the health service.

Social Democrats TD Róisín Shortall argued that there is “dysfunction” when it comes to funding for health and Mr Cullinane described the situation as “chaotic”.

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He later referred to remarks made by Health Service Executive (HSE) chief executive Bernard Gloster about the deficit in health funding and concerns about next year.

Mr Cullinane said: “What that tells me is that you got very little money [in the budget] for new funding in 2024… It’s a guarantee that we will have a deficit next year and a very substantial one. We will be in the same position again, potentially no money for new developments…

“The health service could potentially be set back, barely standing still for 2024 and for 2025 because of this mismanagement.”

Mr Cullinane added: “I put the blame on Government, obviously, but also on [The Department] of Public Expenditure and Reform primarily for not adequately funding the health service.”

Mr Donnelly did not respond directly to these comments.

Earlier, when presented with internal DPER criticism of efforts by his Department and the HSE to address spending overruns, he said he would expect DPER “to be constantly agitating for more and more cost controls. That’s part of their job”.

“And part of my job is to try and achieve those whilst protecting patient services.”

Mr Donnelly had come before the committee to outline how he is seeking gross additional funding for health of €1.034 billion.

Some €70 million of this is unspent funding for capital expenditure that will be carried forward to 2024 so the net cash draw-down by the health service this year will be €964 million above the original allocation.

Mr Donnelly explained the need for the funding, saying the health service has experienced significant increases in demand, largely driven by population growth and an increase in the proportion over 65.

He said the second driver of the deficits is the impact of inflation on the health sector which, at an average rate of 10 per cent, is “significantly more” than the inflation rate projected overall of 5 per cent for this year.

One area with increased costs in 2023 is in the area of clinical negligence where the State Claims Agency needs an additional €75 million. This will bring the final allocation for provision for legal claims in 2023 to €510 million. This is up from €373 million in 2020.

Mr Donnelly said this can be attributed to “an increase in the number of claims and an increase in the value of settlements awarded, particularly claims arising due to catastrophic birth injury”.

He said a new incident review team led by Dr Peter McKenna is examining “these serious obstetric events to immediately learn and put in place measures to reduce, to the greatest extent that is possible, some of these really tragic outcomes”.

Mr Donnelly said the approach to the rising cost of claims is, in the first instance, patient safety related but he also said he does not believe the current increase in expenditure in the area is acceptable.

“We have a high level of litigation in this country when you compare it, it’s high by international standards, particularly when you consider that the quality of our services is excellent compared to large parts of the world,” Mr Donnelly said.

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