Health budget needs to be brought under control

I have no special knowledge of the health policy area and have therefore been loath to write about it

I have no special knowledge of the health policy area and have therefore been loath to write about it. But there are a number of points about the present débâcle that strike even a non-specialised observer as worthy of comment, writes Garrett FitzGerald.

First, it has been clear for a very long time that the health service is not being effectively run by the traditional system of a government minister and department. Under modern conditions this task appears to need executive management of a kind that the traditional departmental structure under a minister no longer seems able to provide.

Perhaps this is because the unique constituency pressures on most Irish ministers make it impossible for them to give the time needed to undertake the massive volume of work.

Clearly recent ministers have not succeeded in getting on top of this problem, as Barry Desmond did succeed in doing 20 years ago - despite being in charge of Social Welfare as well as Health for most of his time in government.

READ MORE

Because he was a Dublin minister, absolutely dedicated to his two departments, Barry developed a detailed knowledge of the health service that I do not think has ever been matched since, and this helped him to make savings without disrupting the system.

I remember a colleague telling me of going into Barry's room to look for him, and finding a fridge with food such as cheese and milk in it to keep him going during the time he spent there at weekends with some of his key staff.

Incidentally, contrary to political folklore about how politicians win votes, the fact that he worked so hard at his job, at the expense of constituency work, did not lose him votes: his efforts in government were in fact widely appreciated and he significantly increased his share of the vote in Dún Laoghaire at the subsequent election

The present Minister and his immediate predecessor are both from constituencies many miles from Dublin, Cork city and Laois-Offaly respectively. They could not conceivably be expected to give to their Department the kind of time required for the hands-on management that is needed there now.

Why is our hospital system in such a mess? By careful detailed planning Barry Desmond had succceded by 1986 in reducing the number of hospital beds from over 19,000 to under 17,000 without disrupting the system.

But between that year and 1993 the number was cut by a further 5,000, or 30 per cent, to around 12,000, a figure at which it has since been held.

It is true that since 1986 bed use has been substantially increased, and the average hospital stay has been cut by 12 per cent to less than a week, so that the number of patients treated in the year 2000 was only fractionally less than 14 years earlier, reflecting a substantial improvement in hospital through-put.

But, of course, during this period the number of patients requiring hospital treatment was rising, first because in the intervening period the total population of the State increased by 8 per cent but, more importantly, because the number of people aged 70 to 84 increased by almost one-quarter, and the number aged 85 and over actually doubled. And illness and hospitalisation are far more prevalent among older people.

It has been patently obvious for some time that even with higher bed use and shorter hospital stays, we simply cannot hope to manage with 30 per cent fewer beds than we had 17 years ago.

The simple fact is that cuts made in the late 1980s and early 1990s went beyond what could be justified, and can now be seen to have done permanent damage to our health system.

What is remarkable is that this sharp deterioration in the relationship between the ever-rising demand for hospital treatment and the greatly reduced supply of hospital accommodation was accompanied by a 75 per cent increase in the staffing of the health service and by a trebling of the volume - not just value, but actual volume - of spending on it.

Already by 1996 the number of hospital staff per in-patient had risen by almost 30 per cent.

The extent to which the Department of Health has spiralled out of control since 1996 can easily be measured by reference to the scale of its financial over-runs, i.e. the excess of current spending by it over and above the sums provided for Health in each year's Budget.

Between 1993 and 1996 spending had exceeded the budgeted level by a modest 3 per cent a year. But in the most recent two years this overspending figure had leapt to an average of 11 per cent. In the last five years the Department of Health managed to exceed its budget by a cumulative total of no less than €2.2 billion.

Another way of looking at this Health overspending is to compare the Government's own advance estimates of the Health Services' future financial needs with what it has ended up spending a year or two later.

Thus in the 2000 Budget the Minister for Finance estimated at £3.7 billion the Department of Health's needs in 2002.

Twelve months later he had revised this figure upwards by a full £1 billion to £4.7 billion. And when a year later again he came actually to budget for Health spending in 2002, he found he had to increase this figure again to £5.1 billion.

But the actual out-turn for the year 2002 was almost £500 million higher again than this budget figure.

So, between the end of 1999 when Charlie McCreevy made his first estimate of what the Health Department would need in 2002 and the end of last year this figure jumped by almost £2 billion, or 50 per cent.

It is quite obvious that despite years of experience of persistent huge overspending, neither of the two Ministers for Health that we have had since 1997 succeeded during this period in introducing adequate control mechanisms.

If this had been done gradually and in good time it might, without causing too much pain, have got the Health Service operating efficiently.