Analysis: Consultants’ case comes as health budgets feel the pressure

The worries in Government about the potentially catastrophic cost of the consultants’ legal action over pay come as pressure on existing health budgets becomes ever more acute.

Although the Department of Health was allocated an increase of more than €600 million in last year's budget, Government sources acknowledge that overspending on health is growing as the HSE struggles to control expenditure and keep within its allocated budgets.

There is growing alarm in the Department of Public Expenditure about the overspending, which is understood to have reached close to €100 million for the first quarter of the year alone. It is now well beyond that figure. The HSE has told the department that overspending is a result of the January trolley crisis and additional pressure on hospitals, especially from older patients.

Paying out several hundred million euro out of the existing health budget would mean drastic and politically impossible cuts in services, so the Government would have to find additional resources, potentially upsetting Minister for Finance Paschal Donohoe’s budget plans.

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The Dáil’s consent would be needed for any extra resources to pay consultants.

While a settlement of the case could reduce the feared €700 million cost of the consultants’ court case, it is still likely to cost hundreds of millions of euro.

Headache

Health budgets are a headache for any government and extra resources have been needed every year to cover the cost of overspending. Health authorities argue that the budgets are required to pay for the demand for health services, but the Department of Public Expenditure has been critical that promised savings have not been achieved in the system.

A value-improvement programme which was put in place in the official health budget for the year has not delivered the level of cost savings envisaged.

Government officials tend to view the HSE as a having an endless requirement for extra cash, complaining that no matter how much extra money is provided, health always comes back looking for more by the end of the year.

Pressures for extra resources are evident across the health system. The HSE received a record €14.5billion from the Exchequer this year, an increase of about €600 million over last year, but even before the start of the year it warned Minister for Health Simon Harris privately that the requirements for extra funding could ultimately reach over €800 million for the full year.

Additional funding

Documents obtained by The Irish Times earlier this year showed the HSE initially sought €1.481 billion in additional funding to maintain current service levels in 2018.

The budget pressures come at a time when the Government is being pressed to publish its plan to implement the Slaintecare report, published a year ago after months of deliberation by a cross-party committee of TDs and passed unanimously by the Dáil.

However, the report recommends a substantial increase in funding for the health service on an annual basis, as well as a €3 billion transformation fund to cover the costs of moving from a mix of public and privately provided healthcare to a public-only system.