Sláintecare information ‘severely lacking’, says costs watchdog

Fiscal plan and budgeting for healthcare reform criticised as spending keeps spiralling

The Government’s spending watchdog has sharply criticised a lack of information about the Sláintecare reforms for the health service.

Basic information is "severely lacking" about Sláintecare despite it requiring substantial and permanent increases in public healthcare spending, according to a report by the Irish Fiscal Advisory Council.

“While the reforms have been under way for almost four years, no budgeting is available beyond one year, no updated costings have been produced since 2017, and little clarity on progress made is publicly available.”

While the reforms were estimated in 2017 to add €2.8 billion a year to public spending on health, pay and other cost pressures “do not appear to have been factored into the original costings”.

This is likely to have driven up the final cost of implementing Sláintecare significantly, say authors Dr Eddie Casey and Killian Carroll. The two economists say factoring in pay and price pressures "should be carried out as a matter of urgency".

‘Favourable demographics’

Health outcomes have improved in recent decades, with life expectancy now in the top one-quarter of EU countries. At the same time, the rise in Ireland’s public health spending has been dramatic, according to the paper – from 2 per cent in the mid-20th century to 8 per cent before the Covid-19 pandemic.

Ireland is a "high spender" on health internationally – sixth out of 33 OECD countries for government spending on healthcare as a share of national income, the report notes. "This is despite Ireland having had relatively favourable demographics over this time, with an old-age dependency ratio well below the median OECD country."

Spending on outpatients or daily hospital services is particularly high – with only Finland, Sweden and Japan spending more. And despite a high spend on investment, Ireland ranks about the median on the availability of hospital beds, CT scanners, mammography machines and other key items.

The authors say explaining the reasons for the rise in spending is not easy, though ageing and the general rise in people’s incomes are likely to have played a role.

Ageing and salaries

By 2050, public heath spending could be accounting for 13.2 per cent of national income, the report forecasts. Two-thirds of this increase will be due to ageing and population changes, and one-third to price and wage pressures.

The paper calls for “more realistic” spending forecasts, developed earlier in the budgetary process. Better five-year budgets could be a “game-changer” for managing health spending, it suggests.

They say it is striking that much of the fast increase in health spending in recent years has been unplanned. In the four years running up to the pandemic, health accounted for 56 per cent of total Government spending overruns, even though it only accounts for one-fifth of overall current spending.

Almost 65 per cent of overruns related to pay, with hospital staff budgets running over, often due to unplanned hiring of staff by the end of the year.

The report is critical of “flawed” planning and budgetary management in public health. “The problems in health budgeting are manifold: predictable spending increases are routinely ignored, basic plans are not made in a timely manner, and this contributes to the classic problem of a ‘soft budget constraint’. In other words, the overruns seen in Ireland in recent years appear to be a combination of both poor forecasts and poor controls on spending.”