HSE chiefs stumped as overrun doubles

The annual overrun in health service spending has more than doubled in the last few years but health bosses are unable to explain why.

HSE chiefs stumped as overrun doubles

The annual overrun in health service spending has more than doubled in the last few years but health bosses are unable to explain why.

Senior officials told the Oireachtas health committee they could account for each item of unforeseen costs each year but could not say why they cannot foresee them if they keep recurring or why the overrun would have increased so much.

The HSE was €485m over-budget by the end of August — the Government had to allocate an additional €700m to get it through to the end of this year, despite its record budget of €15.3bn at the start of the year.

Colm Desmond, from the Department of Health’s finance unit, told the committee that demographic pressures — the growing population, increasing number of older people, and a rise in chronic illnesses — made it difficult to predict costs.

Expensive new drugs and increased demand for the long-term illness scheme for people with conditions such as epilepsy, diabetes, and cystic fibrosis also played a part.

HSE chief financial officer Stephen Mulvany said extra spending due to Storm Emma, an increase in costs associated with the State Claims Agency, and a rise in payments related to medical cards, GP cards, and drug reimbursement schemes also contributed.

Stephen Donnelly, Fianna Fáil’s health spokesman, rejected the arguments, saying demographics and most of the other factors are entirely predictable and should be budgeted for.

He said the overrun was an annual occurrence but it had shot up from €100m-€200m per year until 2011 to €300m a year up to 2014 to €500m-€700m in the last few years.

“There are always crises, there are always storms, there is always unanticipated activity.

"But why are the overruns about three times more than they used to be,” he asked, adding that anyone running a coffee shop, charity, or GAA club would put money aside for unforeseen expenditure, he added.

Mr Mulvany said the HSE did not hold a contingency budget as “that could cause all sorts of motivational issues”.

Mr Donnelly replied:

The taxpayer is your contingency.

Sinn Féin TD Louise O’Reilly questioned the inclusion of a failure to achieve a targeted €346m inefficiencies as one of the items of overspending.

The committee heard €60m in savings were made on some drugs, agency workers, and overtime, but ways of achieving the rest had not been pinned down.

“The €346m was an ambitious target but necessarily ambitious,” said Mr Mulvaney.

Fine Gael senator Colm Burke said he was concerned the number of staff in the HSE had increased by 12,000 since 2014, including 2,600 extra administration and managerial staff, at a total additional payroll cost of €600m, yet the frontline service providers he was familiar with said they had received no extra workers.

Mr Mulvaney said he did not have the full details to hand but he said the term administration and managerial was also used to cover accountants, IT specialists, and engineers, as well as general administrators.

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