The State’s finances are steadily improving - but those of the health service are not. There’s never enough cash. Poor execution of existing budgets and an insatiable demand for yet more money make for a recurrent nightmare.
The cycle of action is as familiar and unchanging as the storyline in a soap opera. As any given year progresses, an ever-growing accumulation of day-to-day overspending culminates in a bitter squabble over the next year’s allocation.
Predictably enough, we’re already building up to yet another dénouement in Budget 2016 between the same principal characters: profligate health types versus the meanies who control the loot.
The latest exchequer returns show day-to-day health spending running €283 million ahead of target in the first eight months of the year. This will only worsen as winter looms.
The overrun comes as the Health Service Executive seeks a sum approaching €2 billion in additional expenditure next year - a huge amount.
Recall first that the Government plans to expand the total budget next year by up to €1.5 billion, divided equally between spending increases and tax cuts. This means Ministers will discuss the allocation of no more than €750 million for new spending between all departments.
Yet the HSE wants close to three times that amount, and says significant new funding is required to overcome the legacy of prolonged austerity and provide for an ageing and expanding population.
Merely to stand still, apparently, no less than €1.4 billion would be needed. That’s almost the entire budget package foreseen for the entire Government in 2016.
There’s an element here of asking for a good deal more than is feasible to maximise the negotiating hand, but it’s not particularly becoming.
Although the HSE may also be counting on an increase to the overall package in the October budget, any major change is unlikely. Moreover, unanticipated revenue gains from the surge in corporate tax might not last.
Perception of disarray
It seems the HSE is dreaming in fiscal technicolour, while everyone else is dealing in black and white. Worse, pleading in a rather public fashion for money not in the kitty only adds to a perception of disarray and chaos that surrounds the health system.
The service is beset with an abundance of well-publicised problems yet it is not, as some of its more ardent critics argue, on the verge of implosion.
When things go awry, as they often do, we hear about it. Yet the whole place is not falling apart. In many instances the service works well.
An assessment by the Irish Fiscal Advisory Council (IFAC) provides insight into health budget breaches each year since 2008.
The most persistent sources of overruns were hospitals and primary-care reimbursements. The IFAC also observed that Irish public health spending – 8.7 per cent of GDP in the depths of crisis in 2012 – remains well ahead in EU terms, where average spending is at 7.3 per cent of GDP.
“There is evidence that difficulties in budgeting and financial management and governance arrangements in the hospitals area create a tendency towards budget overruns. Improving these arrangements is particularly important given the proposed, more decentralised structure envisaged under the Government’s future health strategy,” the IFAC said.
And so say all of us. Citing a 2012 report by PA Consulting, the IFAC said the HSE’s allocation of regional and hospital budget was based on the previous year’s budget rather than outturn data – hardly conducive to efficiency or realistic forecasting.
In primary care reimbursements, the main source of budget excesses was spending on drugs and new drugs particularly.
Overruns are no surprise in this context, although talks start this month on a new deal between the State and the pharmaceutical industry. As the HSE angles for another supersized budget increase, it would do well to tackle deficiencies in its own management systems.
