Warning over health budget overrun

The EU’s economics commissioner sounded a strong warning yesterday about Ireland’s budget overruns in health spending, saying that the Government will need to do much more to get the sector into shape.

Speaking during a visit to Dublin, Pierre Moscovici said the “remarkable” upturn in the Irish economy was due to the painful reforms undertaken during the troika’s bailout programme and that Ireland looks set to be again the fastest growing country in Europe this year and in 2016.

However, he said Ireland’s high levels of public and private debt left it vulnerable to any fresh economic shocks and that the Government will have to keep a vigilant eye on spending across all areas and in health services, in particular.

“The evidence from the past few years indicates that Ireland faces challenges in delivering healthcare cost-effectively. Budget overruns have occurred systematically over the past few years, and pressures continue to build up. Public expenditure on healthcare is comparatively high among EU countries even though population health outcomes are by and large no better.”

He said that despite “efficiency gains” that the challenges facing the Government in reforming health care “remain significant” as Ireland’s population ages.

“At this stage, the low-hanging fruits have already been picked, and deeper structural reforms are necessary in order to provide quality healthcare to the population at an affordable cost to society.”

He also acknowledged that despite the recent fall in unemployment that many Irish people had been excluded from the benefits of the economic upturn.

However, he said that the pain of the bailout years had been “necessary and beneficial” and that recovery had been based on what he said was a well-crafted bailout programme.

“This rebound is truly remarkable and is tangible proof that adjustment and reforms do pay off when they are carefully designed, and when there is a strong sense of national ownership.”

Along with healthcare, the EU has identified Ireland’s work priorities as meeting its fiscal and taxation targets, ensuring against child poverty, and reducing the huge legacy of soured loans on banks’ loan books.

He said so-called non-performing loans accounted for 23% of bank loans and urged progress between banks and debtors in striking deals over both home loans and small business loans.

“Restructurings should be such that loans do not fall back into arrears, and it will fall upon the Central Bank of Ireland to monitor the sustainability or conclude resolutions,” he said.

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