A new internal HSE report forecasts that demand-led schemes will record a financial over-run of €168 million for the current year, writes Martin Wall
Last May senior Health Service Executive (HSE) management warned its board that expenditure in the first five months of the year was running at unsustainable levels. By that stage the HSE had recorded a financial over-run of nearly €140 million and the Department of Health believed that without remedial action this figure could hit €400 million by year's end.
A significant amount of the deficit recorded was attributed to spending on demand-led schemes which statutorily provide drug services, subsidies or allowances such as the well-known drug payment scheme to certain categories of patients.
A new internal report drawn up by the HSE warns that expenditure on statutory drug/allowance schemes has been increasing at significant rates in recent years and that this is "a growing underlying problem" for the organisation.
Although spending on demand-led schemes, by their nature, can be difficult to predict, the HSE report argues that historically they have been under-funded by the exchequer and that "budgetary allocations are not keeping pace with expenditure growth".
The report forecasts that the schemes will record a financial over-run of €168 million for the current year. In 2006 there was a shortfall of €114 million.
The report says that although the HSE has been working to reduce the cost of drugs supplied - its new agreement with the pharmaceutical industry will see a 35 per cent fall in the cost of patent-expired products - "significant expenditure growth is still very much a feature of these statutorily-based schemes".
The report identifies the main schemes driving this expenditure growth as the drug payment scheme (DPS); the long-term illness scheme (LTI); high-tech medicines; the domiciliary care allowance; and the hardship medicine scheme.
In addition to its new deal with the pharmaceutical industry, the HSE has also put in place a number of review groups to examine expenditure in several areas. A spokeswoman said the work of these groups was ongoing.
The report paints a picture in relation to a number of these schemes of new and more expensive medications becoming available at a time when the number of people claiming and the volumes of prescriptions being written by doctors is rising significantly.
The report also spells out the cost to the HSE of providing drugs to certain individual patients. It says that last year the organisation paid out over €193,000 in drug costs for one individual patient. In 2005 three patients accounted for about €500,000 paid out by the HSE under the high-tech medicine scheme.
The report says that in 2003-2006 expenditure on the top 10 drugs under the drug payment scheme - which reimburses spending on approved prescribed drugs and medicines for families and individuals above a monthly threshold of €85 - had seen a per annum increase of €25.9 million or 44 per cent. It says this was driven by prescription volume rather than price.
The report projects that spending on the DPS will increase by 15 per cent to €321 million this year. It forecasts that the number of prescriptions will grow by 9 per cent to 3.24 million.
It also says there has been a significant increase in the number of people making claims under the DPS. It says that in December 2005-December 2006 there was an increase of 30,000 people - 13 per cent - who made a claim.
The report says that statins (cholesterol-reducing drugs) have emerged as "the most expensive trend in drug schemes in recent years", accounting for €30 million of the top 10 drug expenditures in the DPS scheme.
"Lifestyle choices can contribute to the growth of these drugs since it is easier to reduce cholesterol by taking medication than by changing habits," the report states.
It says that Atorvastatin is the most commonly prescribed statin under the DPS and medical card schemes - and it is also one of the most expensive products of its type.
"Prescription volumes have grown by 101 per cent when 2006 is compared against 2003," it says.
The report also points to an increase of nearly 30 per cent in the number of clinical nutritional products claimed under the DPS in 2003-2006. It also highlights a significant increase in the level of anti-depressant drugs being prescribed in recent years.
The report says that while the number of people using the long-term illness scheme, which covers drug costs for 15 specific conditions, has remained relatively static, cost increases were due to the volume of prescriptions.
It forecasts that expenditure on the LTI scheme will rise by 16 per cent this year to €130 million.
It also projects that the number of prescriptions will grow by 11 per cent this year.
The report says the number of people registered under the high-tech medicine scheme has grown significantly each year and that this has major cost implications given the expensive nature of the drugs.
The number of persons registered increased by 11 per cent in the year to 2005 (the latest date for which information was available) to 31,510.
This scheme covers drugs that are not available under the DPS or medical card scheme. There are 153 items available under the high-tech medicine scheme and the report says the drugs prescribed - which are free to medical card holders while DPS patients pay an initial €85 - are the most expensive available under the demand-led schemes.
It says that one month's supply of Tracleer, which treats respiratory illness, costs €2,986.