Further spending controls will have to be introduced in the health service if measures aimed at tackling overspending in non-pay areas — such as on goods and services — are not successful, the Health Service Executive’s board has warned.
The Government has in recent months provided an additional €1.749 billion in funding to the HSE, bringing the budget for next year to a record €24.3 billion. The extra money was seen as a settlement of a row dating back to last year’s budget when the health service argued that it did not receive sufficient funding to meet its needs.
There were fears before the extra funding was provided that the HSE could record a financial overrun of about €2 billion this year.
After reaching an agreement with the Government on additional funding, HSE management put in place controls, targets and spending limits which involved a more rigorous process to secure authorisation for spending.
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However, official minutes of a Health Service Executive board meeting in late September show that chief executive Bernard Gloster told members “the impact of these measures are slow to be achieved in the non-pay area”. The board appeared concerned that the organisation’s reputation and credibility would be damaged if it could not deliver on its plans to control spending.
“The board outlined that the introduction of further controls in the non-pay profile will be required if limits do not show signs of some achievement in the coming weeks, and noted that the CEO has engaged both the operational and finance leaders of the organisation on this and highlighted the responsibilities on all,” the minutes state.
The HSE told The Irish Times it was “working daily to manage and reduce costs without reducing front-line services. Every means possible is being explored and used when appropriate, and we are seeing good progress in this regard. We aim to end the practice of having annual deficits, which gives a negative picture of the overall health spending picture each year. We have developed an overall improved control environment based on the agreement with Government in June, and we will see the full and lasting impact of this as we progress through 2025 as agreed with Government.”
As well as measures to tackle spending on goods and services, the Health Service Executive also agreed a strategy with the Government to control employment numbers and pay costs.
Health service unions have contended that this move will mean suppression of more than 2,000 posts. Unions staged lunchtime protests at some hospitals on Wednesday and are balloting members for industrial action.
Minister for Health Stephen Donnelly last month told the Oireachtas committee on health that the health sector had experienced significant increases in demand across all areas during the year, with average volume increases of between 5 and 10 per cent in hospitals.
“The increase in demand is driven largely by demographic changes — population growth that has outstripped previous projections, as well as the fact that the number of those aged 65 and over has increased significantly, placing additional demands and costs on the health sector.”
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