That the health budget is overrunning again comes as little surprise, though the figures involved are very large. The HSE is likely to exceed its budget this year by some €1.5 billion, according to its chief executive, Bernard Gloster. And it is already clear that the organisation faces what Gloster referred to as a “deficit” for next year. This can only happen because the State is effectively underwriting the shortfall, a very poor way of budgeting.
Funding the health service was the most controversial aspect of Budget 2024. Why the issue was not addressed head-on earlier in the year, as the overspend emerged, is not clear. This would have given some time to scope out alternatives. Now, the departments of public spending and health are to discuss it ahead of a supplementary allocation for this year, likely to be passed in December.
Perhaps they can start to plan a way forward. This needs both sides to accept things they may not find comfortable. The Department of Public Expenditure and Reform – and the Cabinet – need to accept that the ageing population and planned reforms mean healthcare spending is going to continue to increase significantly. And the Department of Health and the HSE – and the wider health system – need to acknowledge that they must find ways to do things more efficiently and that a budget, once set, needs to be adhered to.
Proper budgeting needs to start from a realistic assessment of likely demand. Time and again we hear that “demand-led” programmes are sending the service over budget. Some of this demand is unpredictable – think of Covid-19 – but much of it can be estimated in advance.
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Strategic goals also need to play a part. The massive increase in spending has, indeed, led to improvements, for example in areas like cancer care and in the roll-out of community services. More patients are being treated as the population rises.
But there is still no agreed budget for Sláintecare. And it is reasonable to ask why the huge additional sums put into acute care hospitals have not led to a commensurate increase in the number of patients treated.
Speaking to the Joint Committee on Health this week, Department of Health secretary-general Robert Watt said that there had been a 50 per cent increase in inflation-adjusted spending on acute care since 2016, but a much smaller rise in the number of patients treated. He attributed this “productivity puzzle” to poor physical infrastructure, lack of IT investment, weak processes and inadequate consultant-led leadership.
Reform is happening in many areas, but needs to accelerate. According to Watt, " there is simply no prospect” of treating more and more patients in acute hospitals using existing structures and procedures. Health will require more money, but it must be on a planned basis and not the chaotic end-of-year scramble we are now seeing.