Harney says cuts in health funding will be 'considerable'


NEXT YEAR will be the most challenging year ever from the perspective of financing the health service, Minister for Health Mary Harney said yesterday. She made it clear the level of spending cuts in 2010 would be “considerable”.

The Government, she said, had announced it would take €3 billion out of current expenditure next year and, given that health accounted for such a large proportion of annual expenditure, the cuts would clearly impact on the health service.

“It will be the most challenging year ever from the perspective of financing the health service. There is no doubt about that. We are living in very difficult times.”

Ms Harney said she was determined to maintain as many services as possible. “Therefore, we have to look at the cost of providing services in the first instance. They are very high in Ireland in comparison with other countries.”

She indicated everything was on the table for discussion, including public sector pay cuts, when it came to considering how to make savings in the run-up to the budget. “Everything has to be on the table. I don’t think the citizens would accept a situation where services are cut without the cost of providing those services being examined in the first place.”

She said the Health Service Executive has already been asked to draw up plans to cut spending by €800 million next year, and it was also facing pressures such as the cost of extra medical cards and demographic changes which could cost €400 million.

She added that €1.2 billion of the €7 billion health service pay bill goes on overtime and premium payments each year and there may be potential for savings in this area by doing things differently. “We’re going to have to look at efficiency levels, at output levels, we’re going to have to look at how people work, we need greater flexibility, for example.”

Ms Harney was speaking to reporters in Dublin after addressing a seminar on health service funding organised by the Society of Actuaries in Ireland and the Institute of Public Administration.

The seminar, entitled “More For Less? Lessons From Abroad For Funding Irish Healthcare”, heard from a number of countries including the Netherlands, the UK, US and Canada, about how citizens in those countries have been calling out for reform, and how different models of funding have been used in each to provide healthcare.

Enne Osinga, an actuary from the Netherlands, told delegates about the insurance-based system of health service funding introduced in the Netherlands in 2006, but said further reforms were required. He said it was ridiculous, for example, in 2009 that patients could not e-mail their doctors with queries. It would cut down on doctor visits and increase patient satisfaction.

John Armstrong, a health economist working with the VHI, said 80 per cent of Ireland’s health expenditure was tax based, which would cause big difficulties in the next number of years. The current model of health service funding was unsustainable, and new funding sources and greater efficiencies needed to be found.