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Health Services Expenditure

Dáil Éireann Debate, Tuesday - 23 October 2018

Tuesday, 23 October 2018

Questions (441)

Bernard Durkan

Question:

441. Deputy Bernard J. Durkan asked the Minister for Health the full extent of the health expenditure overrun in 2018 and in each of the previous years back to when annual overruns became a feature of costs in the health services including the operation of the health boards; if a particular feature has emerged which might point to the most common cause of overruns; if it is applicable to specific sectors or disciplines; if specific action has been taken at year end with a view to arresting the trend; and if he will make a statement on the matter. [43663/18]

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Written answers

A number of areas within the HSE are contributing to the overspend in 2018:

1. A private patient income shortfall, arising from the campaign by the PHI to dissuade their policyholders from using their insurance when admitted through an ED

2. Non- achievement of the tranche 3 of the VIP programme

3. Higher level of State Claims Agency payouts than budgeted for

4. PCRS driven by costs and demand for drugs (especially Hi Tech and LTI)

5. Higher level of spend on national reform projects

6 Higher level of spend on service areas (Acute and Social Care)

7. Other smaller items, such as overseas treatment, winter response

The overspend in the service areas is driven by a number of factors, including non-achievement of VIP tranche 2, higher levels and higher complexity of demand, costs associated with meeting national standards, emergency placement over level funded.

 Over the last 5 years, the Health sector received the following supplementary estimates:

- 2017 - €195m

- 2016 - €600m (not an official supplementary, included in 2016 Health allocation, approved by the Oireachtas)

- 2015 - €665m

- 2014 - €680m

- 2013 - €219m

There are a number of key drivers that contribute to the increases in expenditure in recent years in the health service. These are;

- Aging demographics:  The population in Ireland over 65 years per the CSO census data has increased 54% since 1996. Both the numbers and the age profile within the over 65yrs are contributing factors. The number of the population aged 85 and over has increased 95% from 1996 to 2016 or over 32k (Source: CSO census).

- Increase in co-morbidities:  Due to the continuous improvements in health delivery more people are living longer with more illnesses, but they require increased ongoing support from the health system e.g. diabetes, dementia

- Regulation:  There are almost 1100 designated centres in disability services that require to be registered under the National standards for residential and respite for adults and children with a disability. There are 25 designated centres remaining to be registered by HIQA.  A significant element of the overrun has arisen following HIQA inspections of a designated centre and the recommendations for improvements required to be implemented prior to achieving registration.

- Emergency Residential Places: The Community Healthcare Organisations prioritized 790 individuals in 2017 who require an immediate service response in terms of new residential placements to be provided to meet identified waiting list.  An analysis of the waiting lists highlighted the Death or Incapacity of the main carer which accounts for 29.5% of total cases. Such immediate priorities frequently lead to a bed-blocking situation in local respite services, which has the knock-on implication of reducing dramatically the overall quantum of respite available to non-residential service users within the CHO area. Almost two-thirds of required residential placements (65.5%) are for individuals who require supports to be delivered at high support staffing levels and frequently at 1:1 or above.  The majority of new placements are commissioned from private providers as there is minimal capacity available in the public system.

- State Claims Agency:  An actuarial assessment for potential claims under the Clinical Indemnity Scheme is prepared annually by the State Claims Agency and a determination is taken with regard to the level of funding that will be required by year end.   As the year end position is an estimate it can come in under or over budget.  In the last few years it has come in over budget, this is typically due to settlement of cases prior to the courts closing at year end.  The increasing cost of settlements is determined by the court system and not within the remit of the health system.

- Drugs:  The main drivers behind this is the expenditure on new High Tech drugs, in areas such as cystic fibrosis, rheumatology, and cancer drugs, increased spend on drugs on the Long Term Illness scheme e.g. diabetes, cystic fibrosis, epilepsy and General Medical Services Drugs & Pharmacy costs.

Pensions:  Health is one of the few public services which has its pension costs reflected in its Vote; changes to pension rates, and the fact that pensioners are living longer has resulted in a significant increase in the share of the health vote which is attributable to pensions.

- Pay : The growth in both staff numbers, pay rate premia and underlying pay costs linked to Workplace Relations Commission agreements.

It is important to note that growth in health expenditure is a feature of all health systems and is not unique to Ireland.

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