Health budget set up in a 'dysfunctional and troubling' way, Oireachtas committee says
Minister for Health Stephen Donnelly said: “Inflation in the health sector is significantly more than the headline inflation rate projected by ESRI of 5% for 2023, being an average rate of 10% across the non-pay Acutes area, and significantly higher in areas such as medical and surgical supplies, 17%.” File photo: Sasko Lazarov / © RollingNews.ie
The way the health budget was set this year was dysfunctional and troubling, the Oireachtas Health Committee heard on Wednesday.
Health Minister Stephen Donnelly and Minister of State Mary Butler faced questions on how the agreement was reached with the Department of Public Expenditure and Reform (DPER) on funding.
Mr Donnelly told the committee: “I am seeking total additional funding for 2023 of €1.034 billion.” He said this gross amount includes €913.5m for HSE core expenditure and €121m for the HSE's current expenditure on covid. It also contains €22m for capital expenditure, which he said is offset by €22m in savings on expenditure by the Department of Health and other non-HSE agencies.
Mr Donnelly and department officials highlighted spiralling inflationary costs.
“Inflation in the health sector is significantly more than the headline inflation rate projected by ESRI of 5% for 2023, being an average rate of 10% across the non-pay Acutes area, and significantly higher in areas such as medical and surgical supplies, 17%,” he said.
However, committee members queried how a lower budget was agreed, with reference to a memo from HSE chief Bernard Gloster to the minister. That memo, reported by the Irish Independent last week, revealed his concerns about “significant and punitive risks to the public” linked to funding shortfalls.
Roisin Shortall, Social Democrats health spokeswoman, queried how this fed into the negotiations. “It is an extraordinary scenario that is being painted, we are getting drip-drip feed in relation to what actually happened,” she said.
She noted the DPER secretary general has already said he did not see this despite health officials telling the committee it was sent to that department. “This goes to the heart of the dysfunction that exists really in the whole area of the funding of the health service,” she said.
Sinn Féin health spokesman David Cullinane said the discrepancies are deeply troubling.
“You’ve all said consistently that the majority of it [the supplementary estimate] is recurring and will have to be provided for next year, and the majority of it is led by demand on one hand and inflation on the other,” he said, referring to Mr Donnelly and HSE officials.
“Yet all the documentation I have from Public Expenditure and Reform says something else.” Mr Cullinane said a briefing note from an October meeting “point blank contradicts what you’ve said” with the DPER indicating increased funding is not matched by increased care for patients.
Mr Donnelly responded: “There is a difference between the advice I have and the advice [Public Expenditure] Minister [Paschal] Donohue has in terms of volume and inflation.
“That’s there to see. Where I think DPER are correct is on the productivity, they are correct in saying that the very significant increases in funding, beds, primary care centres, workforce, etc. has not been matched by the same level of increase in patient care.” He is setting up a productivity task-force.
Department official Louise McGirr told People Before Profit TD Gino Kenny that costs associated with the State Claims Agency and medical negligence claims are rising.
“In 2020, the outturn, the amount spent was €373m, that went up in 2021 to €461m and in 2022 to €489m,” she said. “We are estimating this year €510m, so it is going up.”
