The scale of projected overspending in the HSE cannot be explained by increased demand alone, Minister for Health Jennifer Carroll MacNeill has said.
The Minister said measures taken over recent months to control the growth in expenditure in the health service had “not had sufficient impact to date”, adding that spending breaches in areas where control is possible are “not tenable”.
The Minister said all parts of the health service must operate within their allocated budgets and ensure that spending decisions were affordable and sustainable.
Carroll MacNeill’s comments came after Minister for Public Expenditure Jack Chambers said on Wednesday the Government was to strip four of the six regions of the HSE of their powers over day-to-day spending.
The move has been strongly criticised by the Opposition, which said the HSE needed to be given realistic budgets.
Four HSE regions to lose power over day-to-day spending
Chambers told The Irish Times Inside Politics podcast on Wednesday that the overspending in the four regions was “completely unacceptable”.
An internal financial report for HSE management, dated August 28th, which has been seen by The Irish Times, showed that the HSE had recorded a financial deficit to €577 million to the end of July.
The report stated that the “overspend is system-wide, with all six health regions reporting adverse variances”.
It said these deficits ranged from 3.3 per cent in the West and North West region to 6.7 per cent in the Dublin and Midlands region.
The four HSE regions that are to have autonomy over day-to-day spending removed are: the West and North West region; the South West; Dublin and South East; and Dublin and Midlands.
In a statement on Thursday, Carroll MacNeill said her officials and the Department of Public Expenditure and Reform, as well as the HSE, were “working on additional controls to strengthen financial management, accountability and spending discipline”.
She said the health service has had “very significant” additional investment each year.
“My focus is on maximising this significant extra investment by the taxpayer across all services to ensure patient safety and access to care for all. This must be done by doing better with these resources and spending breaches in areas where control is possible are not tenable.
“We are working to bring expenditure back into line with approved funding, to improve productivity and ensure that the significant investment being made in health delivers the maximum possible benefits for patients.”
Carroll MacNeill said there were genuine pressures in the system, including rising medicines costs and growing demand for care.
“At the end of July, demand continued to increase across the health service, with emergency department attendances up 7.2 per cent to around one million presentations, outpatient activity up 5 per cent to 2.5 million appointments and inpatient activity up 2.2 per cent to 353,000 appointments compared with the same period last year.”
However, she said “the scale of the projected overspend cannot be explained by demand pressures alone”.
Chambers told The Irish Times on Wednesday: “The budget in health has increased exponentially and the disconnect between the level of recruitment and the allocation that’s been received isn’t acceptable and that’s why we need a much greater level of oversight but also a centralisation of the control environment.
“What we saw in the August figures was a worsening of that and essentially completely ineffective management of the control system by the HSE and really poor performance by certain regions when it comes to financial management, when it comes to upholding the staff allocation that they were given.”
Social Democrats health spokesman Pádraig Rice described the Government’s move as “deeply regressive”, adding that it would “have a direct impact of patients and staff”.
“The controls already placed on some regions have caused havoc, with level four hospitals having to get sign-off from the HSE chief executive for large fruit and veg orders. In what world could this level of bureaucracy and centralisation be considered efficient?” he asked.
Rice pointed to a statement from the Irish Fiscal Advisory Council, which called for “realistic” budgeting to avoid overruns in health.
“This is advice they should finally heed,” he said, adding that multiannual funding was “fundamental to the long-term reform of our health system under Sláintecare”.
Labour health spokeswoman Marie Sherlock said the decision to strip four of the six HSE regions of control over day-to-day spending was “a damning indictment of Government health policy, just 18 months after the new regional structures were introduced”.
“This is an extraordinary reversal of one of the Government’s flagship health reforms. Just 18 months after regionalised budgeting was introduced, four of the six regions are effectively having control of their day-to-day spending taken away from them.
“The entire purpose of these reforms was to devolve decision-making and financial responsibility to regional level. Now, at the first serious test, Government is pulling financial control back to the centre. That is not reform. It is an admission that the system they introduced is not working as intended.”
Sherlock said “serious questions must be answered by the Minister for Health about how we got here”.
“The HSE is facing a burgeoning deficit because Government has failed to provide realistic budgets that properly reflect demographic pressures and growing demand, while at the same time failing to maintain adequate financial control.”