The Estimate before the Committee provides a gross sum of £3,549,777,000 (three billion five hundred and forty nine million seven hundred and seventy thousand pounds). The figure shows a 9 per cent increase, over £300 million, on the outturn for last year. This is a record increase in the original provision for health.
In the Dáil Chamber, I set out in detail the progress being made with these additional funds. Today, I will give further details on a number of priority areas. I also wish to discuss some broader issues which influence the framing of this year's Estimate. The key issues which I will outline remain relevant and will influence the development of services over the next few years.
During the 1980s we succeeded in developing a national consensus on the key issues facing the economy and the contribution different sectors could make. The current economic performance in large measure flows from the achievement of this consensus. The ESRI pointed out recently that the challenges we now face are substantially different from those which pertained a decade ago. The imperative to reduce expenditure and taxation levels is now of much less importance than identifying priorities for investment in social and economic infrastructure. A modern and comprehensive health care infrastructure must constitute a key element of these priorities.
In setting out the issues which will guide the framing of Estimates for health by this and subsequent Governments, I make a number of propositions.
First, I propose that significant further spending is required to continue the orderly development of services. Real increase in health spending, having allowed for inflation, averaged just under 7 per cent per annum during the 1990s. We are not at a point where this trend might be expected to reduce in the years immediately ahead. There are significant increases in the cost of maintaining current services. In addition, across a broad range of services, including those for the mentally handicapped, the physically disabled and the elderly, child care, and cancer and cardiovascular services, the comprehensiveness and quality of existing services needs to be improved.
This year's increase of 9 per cent allows a considerable advance to be made in improving services. The total increase in funding since this Government came into office is just under £800 million. With exactly the same opportunities and within the same timescale, the previous Government provided just over £400 million or only half that level of increased funding. This Government has prioritised the health service as never before and accelerated the development of services. In the future there is every chance that these years will be looked back on as a turning point in the development of the services.
Since June 1997, for example, mental handicap services have been allocated an additional £53 million, with a full year cost of £59 million next year. In the three year period 1995-97, the previous Government allocated a total of £36.2 million in capital and revenue funding or, on average, just over £12 million per year to these services. This compares with an average of £25 million per year allocated by me to these services to date. I have also put in place a £30 million national capital programme to run over four years. This will provide the infrastructure necessary to support the services. This is the first time such a programme has been provided and it allows for a much more co-ordinated approach to be taken in the planning of these services as opposed to the haphazard approach taken in the past. My objective is to ensure that everyone identified as needing a service will have their needs met within the next three years.
In relation to services for people with physical and sensory disabilities, the report, Towards an Independent Future, was published in December 1996. This report sets out the requirements for the development of services. Following the publication of the review group report, the previous Government provided a total of £3.7 million in 1997. Before the end of that year, my Government invested an extra £10 million in this sector. Last year a further £12.4 million was provided and this year £13.4 million is being made available. This makes a grand total of £35.8 million for physical disability services since this Government took office.
My predecessor, Deputy Michael Noonan, set up a review of cancer services. This review led to the development and publication of a national cancer strategy which sets out the improvements required in this area. I have made some £19.5 million available to implement the provisions of the national cancer strategy since coming into office. This substantial funding is, in particular, addressing regional imbalances in the availability of cancer treatment services outside Dublin. Preparations are also under way for the introduction of national breast screening and cervical screening programmes, and the national breast screening programme will get under way in the autumn. Phase 1 of the national cervical screening programme is under way in the Mid-Western Health Board area and a full national programme will be rolled out using the lessons learned from this pilot programme.
I have taken a particular initiative on the improvement of cardiovascular health. As an immediate step, additional adult cardiac surgeryfacilities are being developed at St. James's Hospital and University College Hospital, Galway. Children's services are being developed at Our Lady's Hospital for Sick Children in Crumlin. Target activity levels are in the region of 450 procedures annually at St. James's Hospital and 300 procedures at Galway. This additional activity will increase existing adult cardiac surgery capacity by over 50 per cent. Developments at Crumlin, which are taking place in association with the national cardiac unit at the Mater Hospital, will provide up to 100 additional cardiac procedures for children. This will increase existing paediatric cardiac surgery capacity by up to 40 per cent. At the same time, a medium-term strategy for the improvement of cardiovascular health is being developed. This strategy will address the preventative, medical and rehabilitation services needed to reduce the incidence of the disease and improve the services available to those who develop cardiovascular problems.
A total of £20 million has been made available to address hospital waiting lists in the current year. In line with the recommendations of the Review Group on the Waiting List Initiative, a further £9 million was allocated in the 1999 budget to services for older people, and £2 million to accident and emergency services in areas that will help to address the underlying causes of waiting lists. On the basis of performance in previous years, it is estimated that a further 20,000 procedures will be carried out under the waiting list initiative in the current year.
There has been much ill-informed comment on waiting lists. We are already making in-roads in this area, a fact which has received insufficient notice. The figure of 34,996 for those waiting at the end of March of this year is 1,887 down on the previous quarter. This is the first fall in waiting lists since December 1996. Waiting times for both adults and children are also being reduced. I have provided two and a half times more funding this year than was provided by the previous Government in 1997 in relation to this initiative. That Government provided £8 million for waiting list funding in our hospitals in 1997. It was increased to £12 million in 1998, an increase of 50 per cent, and to £20 million in the current year. Not only have I provided substantially more funding for waiting lists but I have also begun to address the underlying causes of the problem. I set up the first comprehensive review of the area and the review group's report has offered a comprehensive blueprint for the way forward. I will not be found wanting in implementing the review group's recommendations.
On the capital side, the provision in this year's Estimate is £46 million or over 40 per cent higher than the provision when I took up office. Capital spending, in particular, has been entirely inadequate in the past. A modern, efficient and quality service cannot be delivered to the public with inadequate infrastructure. We cannot hope to promote good morale and motivation among staffif the conditions they are asked to work in are run down. In the past, when funding was tight, the capital programme was the first area to suffer. In particular, inadequate provision was made for maintenance of the existing infrastructure and replacing equipment. This is a false economy and cannot be sustained without doing considerable damage to the quality of services. We have a considerable capital asset base in terms of infrastructure and equipment, and to maintain this base at a reasonable level there must be a continuous programme of investment.
Over the three year period from 1999-2001, the total amount of capital investment by this Government will be £525 million. This compares with only £309 million spent by the previous Government during the period from 1995 to 1997. I am also the first Minister to set up special funding of £10 million per year for the replacement of equipment. The funding being provided across a broad range of services proves the Government's commitment to properly resource the health services. Significant additional funding is required to continue these improvements. For its part, this Government is committed to providing these funds.
That brings me to my second proposition. Funding is only part of the answer since continued improvement in management and delivery systems is also required. Funding, while necessary, will not be sufficient to meet the health care needs of the public. The scope for increased investment in services which is opening up as a result of our economic performance will not, on its own, be sufficient to bridge the gap between what we would like to spend and what we can afford. As far back as 1948, when the British national health service was being set up, Nye Bevan said:
We shall never have all we need. Expectation will always exceed capacity. The service must always appear inadequate.
That remains true today and it makes it all the more important that we use what we have wisely. Reform, therefore, must proceed alongside the provision of additional funding. The way the service is organised, managed and delivered has undergone considerable change in recent years. These improvements have to be continued.
The legislation providing for the establishment of the Eastern Regional Health Authority has been enacted. This will improve considerably the co-ordination of services in the Eastern Health Board area. In particular, it will provide for a smoother interface between acute and community services. The enactment of this legislation is a notable milestone in the programme to improve the organisation and management of the health services.
The introduction and development of service planning is another positive development. Service plans allow for a full evaluation of current services and detailed planning of activity for the coming year. Once adopted by agencies they are the benchmark against which expenditure, output and progress are assessed during the course of that year.
Improvements in planning and evaluation are being supported by the development of information systems. The investment of time and money in this area is yielding better measures of service needs, outputs and outcomes. For example, the input of directors of public health into the service planning process is being greatly facilitated by the public health information system. The development of this information tool is being led by the Department of Health and Children. In the acute hospital system, the use of casemix analysis in the planning and funding of services puts us to the fore internationally. The development of mental handicap services around the country is based on the sophisticated information on service needs and current placements available in the intellectual disability database. This model is being extended to the physical disability area where a similar database is being developed.
The health service is composed of a broad range of areas. The standard of information available to support the planning and management of service delivery is not even across the whole service. This is being addressed so that the best standards which exist in some areas will, in the future, apply throughout the service. Improvement is not just about more of the same. Last year there was a 3 per cent increase in in-patient and day-case activity levels. However at the same time as activity levels are being increased the quality of care is also being improved. The development of clinical audit, quality assurance, risk management and continuing professional education is improving quality within hospitals. An accreditation framework is being introduced into the major academic teaching hospitals. Each of these initiatives will improve technical effectiveness, but of equal importance are the perceptions of patients. There is significant scope to improve standards of customer service, and health agencies must put this concern at the centre of all their operations.
My third proposition to the committee is that services must be developed in a planned, sustainable and orderly manner. I have been criticised for not solving all problems within the service overnight. I do not consider this to be justified since it is unrealistic and counter-productive to try to change everything at once. The only thing worse than no plan is an unrealistic plan. I have tried to come up with realistic, costed plans based on all the evidence.
There are constraints on the pace with which developments can be introduced which have as much to do with the availability of physical infrastructure and trained staff as they do with funding. For improvements to be sustained into the future they must be built on solid foundations. The easy way out for any Minister is to just throw money at problems. It is more important in the long-term that the right decisions are made from the start. If we get decisions on infrastructure and staffing wrong, it will be very difficult to rectify them at a later date. Therefore, plans must be effective and must offer value for money.
Our services have grown in times when available funding was sometimes very scarce. With less prosperity, many very urgent priorities were Iong delayed. Lack of funds acted as a brake on the implementation of many very worthwhile plans. The challenges we now face are different. We need to ensure that systems for evaluating proposals are rigorous and evidence based. We need to ensure the implementation of proposals is monitored to ensure maximum benefit is achieved from the investment. Where necessary, we need to be more flexible in developing technologies and modes of delivery that overcome constraints imposed by physical infrastructure or staffing availability.
My fourth proposition to the committee is that continued economic prosperity will be the key in facilitating the development of the health services. If there is one lesson from the contrasting experience of the 1980s and 1990s it is that it is much easier to make progress in the health area when the overall Exchequer position is favourable. We have every reason to be optimistic about the economic outlook. Nevertheless, it would be naive to think there will not be hiccups along the way. Health must operate within an overall economic strategy which takes account of all factors. In particular, once budgets are agreed we must live within our means. To do otherwise would put at risk a continuation of present favourable circumstances.
My fifth point, which is also related to the economy, is less often considered. It is that the contribution of health and health care to economic development must be recognised. The role of education and other factors in laying the foundations of the current boom is often mentioned. The contribution of health has been almost totally overlooked. Fifty years ago Irish life expectancy was approximately 60 years, there was significant mortality from infectious diseases such as tuberculoses, influenza and measles and the infant death rate was high. Life expectancy is now approximately 76 years and infant mortality has fallen from a rate of 66 per 1,000 to less than 6 per 1,000. There are clearly many factors at work here and the health sector cannot claim all the credit. However, the contribution has been significant.
Investment in health is sometimes portrayed as a burden on the economy. On the contrary, investment in effective health care has a very important contribution to make to the development of the economic and social infrastructure of the country. The priorities for investment in economic and social infrastructure are currently being considered by the Government in the context of the national development plan. Investment in health infrastructure should be an essential component of the next phase of national development.
I advance a sixth proposition that there should be a phased increase in health spending to a level more in line with our EU partners. Irish health spending as a proportion of gross domestic product is at the lower end of the range among EU countries. Wealthier countries tend to devote proportionately more income to health. Therefore, our low ranking reflects the fact that for a long time we lagged considerably behind other EU countries in terms of national income. As we know from the debate on EU Structural Funds, we are now rapidly approaching the EU average national income. However, total resources, both public and private, spent on health are markedly below that of the EU average.
Having adjusted for purchasing power parity, in 1995 we spent $1,100 per head of population on public and private health services while the EU average was $1,475. Greece is the only country within the EU spending significantly less per capita on health while our spending is at or around the level of that in Spain and Portugal. Having regard to the extent of unmet needs and our increasing wealth, we should now plan a phased, targeted increase in the real level of health expenditure to bring us more in line with our EU partners.
Additional funding must be carefully targeted at key areas such as acute hospitals, mental and physical handicap, child care and the elderly, where there are recognised service deficiencies. We should also seek to reduce the incidence of disease through the promotion of healthier lifestyles as is already under way in relation to cancer and cardiovascular disease.
The recent OECD report on our health service found that: "The Irish system is based on a mixture of public and private care which has resulted in good provision of health care at a relatively low cost to the taxpayer." In 1998 over four million cases were treated in hospitals as in-patients, day cases, outpatients or in accident and emergency departments. The service is by no means perfect but by international standards these people received quality care delivered in an efficient manner by well trained staff. This is not to be complacent since the service can always be improved. The Estimate before the committee today will allow us to build on existing achievements and considerably improve services in areas where there are recognised deficiencies.