We need to have an honest conversation about how our health service is funded
We need to have an honest conversation about how our health service is funded - The Labour Party
2026 was to be the year of landmark change in the health service. We were to get “rigorous oversight” and “transparent reporting”. It was the be the first full year of population based funding to the new HSE regional model. The year where €181m in savings were to be delivered on top the €633m from last year. It was to be year of no supplementary budgets.
Instead, we have health staff being they told they are effectively overstaffed, cutbacks happening on the ground in certain regions, the HSE on course to record the second largest health deficit ever of over €1bn and a 2027 budget allocation that will be largely swallowed up by that deficit. And if that wasn’t enough, we have the Minister telling us the HSE broke even last year when it actually recorded a deficit of close to quarter of billion euro.
As a weary public knows, this deficit isn’t a once off. Every single year for the past decade and before, the health service recorded a shortfall and the Government’s pre election promises of free GP care to under 18’s, an additional 5000 in patient beds and a dramatic cut to the drugs payments scheme now look completely remote.
There is clearly something very wrong with how health spending is forecast and planned in this country. Greater productivity and a structural shift away from costly agency staff is absolutely necessary but unfortunately it is only one part of the story.
As Roy Keane so memorably quipped 24 years ago “fail to prepare, prepare to fail” and that is exactly what is happening in our health service.
Repeated unrealistic budget allocations along with a failure to properly plan for rising demographics and increasing complexity of care are at the heart of the HSE’s problem. The added problem is not just what is being budgeted by the Department of Health and Public Expenditure and reform, but how it is being budgeted.
We have a mad situation where some of the biggest hospitals in the State were only agreeing their 2026 budgets with the HSE some 9 months into the year – something that would never be tolerated in a private sector organisation.
The response to the growing health deficit has been simply bizarre. In July, the Departments of Health and Public Expenditure and Reform insisted that all non-clinical invoices worth €5,000 or more go to the CEO of the HSE. Put simply, that’s all the invoices for the milk, the vegetables, the taxis for the dialysis service, the toilet paper. Three months on the attempt to choke off spending hasn’t worked.
No efficient, self-respecting medium-sized company would operate like that, never mind an organisation responsible for a €29 billion budget. It is worth saying this is all happening despite millions spent by Government recruiting over 500 staff to set up their regionalisation experiment- in effect; 6mini HSEs across the country.
And while the Minister may talk about greater care in the community, the reality on the ground is that community care has been the first casualty of the cutbacks in some regions. Right now there is a serious crisis of delayed transfers of care within our hospital system, the ESRI tell us we need 1,400 additional step down beds every year to 2040 and yet we understand there are fewer nursing home beds in the system now than at the start of the year.
For 212 days this year, there has been more than 500 patients on a daily basis ready to leave hospital but with no where to go. This costs hospitals more than €20m every single month. So you would think everything is being done to protect step down care.
Instead what we are seeing on the ground is the HSE withdrawing funding for one on one care nursing home for advanced dementia patients with the high probability that those patients will end up back in hospital costing more not less to the State!
The reality is that waiting lists have grown to almost one million patients, one in seven of them are waiting for a year or more for inpatient and health care demand is growing significantly.
It is 10 years ago when the then Minister for Health Simon Harris committed to activity-based funding – in short, the money follows the patient and the activity. If done right, it should go some way towards fixing the financial challenge.
However, activity based funding is now in place across all inpatient activity in Irish hospitals but bizarrely not for Outpatient or Emergency department activity. They are the source of the greatest source of demand across in our health system. Outpatient lists grew by 10.5% last year and there has been an almost 25% increase in ED presentations over the last ten years. But the budgets allocated to acute hospitals are not reflecting that.
The reality is that changing all of this may involve a greater cost to the public finances. But that is a conversation worth having so that patients get more timely access and that funding is more transparent.
We cannot keep budgeting for a health service that exists only on a Departmental spreadsheet.
And we cannot stand over a situation where the State funds the training of nurses and therapists, only for them to have to emigrate or go into the private sector. Waiting lists for physiotherapy, OT and SLT are devastatingly long, the Government has rightly responded in recent years with a substantial increase in the number of training places but the recruitment embargo means that the vast majority have no HSE job to go into. This is shortsighted in the extreme and storing up much greater costs over the long term.
There is no silver bullet to fixing the health service but honest budgeting with regard to demand and rising complexity of care would be good place to start.
There are also critical structural measures needed like establishing a state run locum service to replace the costly reliance on private agencies. The NHS in Britain has operating one for years. We know that if we invest in more GP’s and ensure they are more evenly spread across the country we have a better hope of greater cheaper care taking place in the community.
Last year, 76% of those turning up to emergency departments did so without a GP referral. Some of these were emergencies but often time it is because have no where else to go to seek help. And we know that if we invest more in expanding screening services and health prevention like the Shingles vaccine for all those over the age of 65, which has been shown reduce hospitalisation and slow down the progression of certain health conditions, we can begin to turnaround how health service money is spent.
Patients and healthcare workers deserve a health budget based on reality, not wishful thinking.