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Overemphasis on savings will put health services at risk

By Paul Mulholland - 21st Apr 2024


On 15 April the Department of Health published two reports. One was The Productivity and Savings Taskforce Action Plan. The productivity and savings taskforce, jointly chaired by the Secretary General of the Department and the HSE CEO, was established by the Minister for Health in January this year.

The action plan sets out a programme of savings targets to minimise the level of financial risk the HSE is facing in 2024. It also outlines a range of “productivity measures” that aim to maximise access to health services for patients.

Savings of approximately €424 million in 2024 (€554 million full-year saving) are being targeted including medicines expenditure, non-pay costs, procurement costs, the cost of care in long-term residential care for older people, and management consultancy costs.

The action plan is intended to be a ‘living document’ and will be added to and amended during the year. Further measures will be announced in the near future.

An accompanying report, published on the same day, is titled An Examination of Trends in Activity, Expenditure and Workforce in Publicly Funded Acute Hospitals in Ireland.

This report was prepared after data was requested by the Minister on performance and productivity across the health service and provides a baseline against which to measure future productivity improvements.

It shows how activity in hospitals changed between 2016 and 2022. The paper is intended to facilitate the work of the productivity taskforce to identify where, and how, productivity can be improved within the health service.

Speaking to the Medical Independent at the IMO AGM earlier this month, HSE CEO Mr Bernard Gloster said that productivity is often seen as a “dirty word” in healthcare. But he pointed out it is an important issue given the significant amount of public funding the health service receives.

However, the IMO sees things differently. In a statement following the publication of the two reports, it argued the Department of Health risks repeating the same “regressive” mistakes of the austerity years if it prioritises savings over investment.

Prof Matthew Sadlier, Chair of the Organisation’s consultant committee, said: “It is surprising and disappointing to see [the] Department of Health … highlight the need for savings in the health service, especially considering similar Government policy during the recession had negative ramifications, which are still being experienced to this day. The health service’s main problem is that we have neither the beds nor the doctor numbers to meet ever-growing patient demand.”

“While the healthcare budget has increased in recent years, that must be seen in the context of restricted budgets for over a decade and a population that has increased beyond expectations leading to increased demand. The 2024 Budget allocated to the HSE will be challenged in terms of maintaining service levels, never mind expanding services.”

The financial difficulties of the HSE are well known and led to the much-criticised recruitment embargo. There is no doubt the task of balancing the accounts, while meeting increased demand, is a difficult one. Productivity, or ensuring the best use of resources, is also vital. But without prioritising long-term investment, the existing lack of capacity in the system will be exacerbated. And, as the cartoon in this issue shows (see below), Sláintecare cannot be rolled out on the cheap.

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