One-fifth of health fund goes astray, finds report

ALMOST 20% of the health budget isn’t actually spent on health, the Economic and Social Research Institute (ESRI) reported yesterday.

An analysis by the economic think-tank says millions of euro included as evidence of the vast sums spent on health in Ireland actually go on services like day centres and residential care for the elderly and disabled.

These are not counted as health items by EU neighbours.

Therefore, attempts to justify a clampdown on health spending by arguing Ireland spends more than other EU countries are based on misleading comparisons, the ESRI concluded.

In one case, a sum of €50 million spent on educational facilities for the new nursing degree course was included in the health budget when the cost of educating doctors and all other health professionals is borne by the Department of Education.

Author of the paper, health services analyst Maev Ann Wren, said as much as one-fifth of all spending on health in Ireland would be classified as social services or other public services in other countries.

The result of including them under the heading of health is an artificially inflated health budget, which compares favourably to EU neighbours when the reality is true spending still lags behind.

Ms Wren said the way figures were compiled had allowed a view to emerge the health sector was a ‘black hole’, which gets all the money it needs but fails to derive full value from its allocation because of the inefficient way it operates.

Comparisons by the international body, the Organisation for Economic Co-operation and Development, show day to day health spending is only marginally below the EU average while capital spending on items like buildings and equipment is substantially above the norm.

Ms Wren said a true picture of spending on items specifically categorised as health-related showed Ireland with a combined health expenditure that equated to about 93% of the EU average.

She said while capital expenditure had increased at a rapid rate, making Ireland look like a big spender in international terms, the investment started from the very low level of 60% of the EU average, and had only been playing catch-up since. Ms Wren conceded return from recent investment had been below expectations.