Billions needed to fund health services into next decade, ESRI says

Think tank forecasts likely expenditure for statutory homecare and other services

The ESRI predicts statutory home support scheme spending of €1.2 billion to €3 billion in 2035. Photograph: Regis Duvignau

The ESRI predicts statutory home support scheme spending of €1.2 billion to €3 billion in 2035. Photograph: Regis Duvignau

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An injection of up to €11.8 billion may be needed to fund primary, community and long-term health services over the next 14 years.

In its latest report, the Economic and Social Research Institute (ESRI) projects that an increase of between €4.4 billion and almost €12 billion will be required to fund these services based on a range of pressures and factors including population change, healthy ageing, policy measures and a key element – pay costs.

The independent think tank looks at the four services where it estimates the largest cost increases will be – public and private GP services and public health nursing and community care, high tech-medicines dispensed in the community, long-term residential care and home support services.

One of the nine authors of the report, research officer Dr Brendan Walsh, said one of the benefits of “projection analysis” is to allow policymakers “start making decisions of how you might curtail cost pressures in some areas or to decide that you’re willing to focus investment in one area compared to another”.

Home support

The ESRI follows the Sláintecare recommendation that a statutory home support scheme be established and predicts increased demand with spending of €1.2 billion to €3 billion in 2035 or average annual increases in funding of 4.4 per cent to 10.4 per cent.

In 2019 the State provided €456 million towards the estimated €616 million total cost of private and public home support.

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Public and private long-term care is likely to increase to €3.8 billion and €5.7 billion, or 6.1 per cent to 10.5 per cent growth every year. Population ageing is the key factor in this rise and follows spending in 2019 of €1.95 billion on residential care for 32,000 people of which the State provided €1.32 billion.

Based on 2019 costs, it suggests an average annual increase of 2.9-4.5 per cent for public and private general practice and annual spending of €1.6-€2 billion in 2035.

Given the recent growth in demand for high-tech medicines, the ESRI projects an annual cost of €2.3-€4.4 billion by 2035 in this area, reflected in annual expenditure increases of 6.1-10.5 per cent.

Cost trajectory

The substantial increases are outlined in the 165-page report: “Projections of Expenditure for Primary, Community and Long-Term Care in Ireland, 2019-2035, based on the Hippocrates Model.”

This model looks at the 2019 demand and cost base and projects likely expenditure for individual services based on a range of scenarios.

“It’s extremely difficult to save money in healthcare but what you could potentially do is reduce the trajectory of cost growth,” said Dr Walsh.

“For instance if you could start implementing different policies it may not save you money but it’s at least reducing the potential growth you’re seeing year on year.”

One of the potential scenarios was the establishment of a new home support scheme to ensure as many people could stay at home as possible, he said.

“What you’re essentially seeing are increases in expenditure on home support but you’ll more or less see equivalent reductions in expenditure on long-term residential care.”

Residential care will still be an important part of the system, Dr Walsh said, but a new statutory scheme to reduce the number of people leaving their home and moving into residential care will “result in a reduction in the potential cost increases within residential care”.