Press Release

Micheál Martin TD, Minister for Health and Children announces Health Estimate 2004

Increase of €891 million in health spending will bring the total spend for 2004 to €10.050 billion – an increase of 10% in spending

The Minister for Health and Children, Micheál Martin TD today announced an increase of €891 million in health spending to bring the total spend for 2004 to €10.05 billion, including capital. In relation to day-to-day current spending, this represents an increase of 10.4% on the revised estimate of last year. Given the overall increase in spending on public services announced by the Minister for Finance today, this additional€891m underlines the Government’s commitment to maintaining health spending into 2004.

The spending figure for next year will be €6.55 billion higher (or 187%) than provided in 1997. The Minister points out that this extra investment over recent years has brought significant results. These include record levels of activity in the acute hospital system and a whole range of additional services provided in all the major programmes of care.

Commenting, Minister Martin said “Having secured an increase of 10%, which is almost double the overall Government increase in spending; my challenge now is to manage this budget in the best interest of patient care. Within the overall allocation I will have the flexibility to prioritise certain areas. In the weeks leading up to the issuing of Letters of Determination to the ERHA and the Health Boards my officials and I will finalise the specifics”.

In regard to 2004 Estimates, the additional funding will provide for:

  • The effects in 2004 of Sustaining Progress and Benchmarking for public servants in the health sector and a number of technical adjustments to the Health Vote. Pay costs form a very significant part of overall expenditure in a labour intensive sector like health. The pay-bill inclusive of benchmarking will require an additional €500 million in 2004. The health service depends critically on being able to continue to recruit high calibre staff in all disciplines in a highly mobile area where the international competition for health staff is intense. We therefore need to see the additional out-lay involved as an investment in quality skilled personnel. It is the case that as a result of benchmarking in particular, pay rates can be expected to increase significantly in 2004. However, this is not a one-way deal. As an intrinsic part of the pay deal there are clear commitments to co-operation with change, modernisation and reform throughout the public service. These are being independently verified and include;
    • Stable industrial relations climate
    • Co-operation with the reform programme
    • Improved customer service, including extended hours of service
    • Enhanced skill mix
    • Introduction of Performance Management Systems
    • Further funding of €187 million is being made available to meet the increased cost of the GMS. This represents an increase of 19%. Additional funding of €50 million is being provided to meet the increasing costs of the Drugs Payments Scheme. It is also necessary to increase the current threshold of €70 per month to €78 per month, which will yield a saving of approximately€8 million, which will further fund the service.
    • The Estimate provides €32 million for the Treatment Purchase Fund, which will ensure that 9,500 of those people waiting longest will be treated in 2004. This is in addition to €43 million for Waiting List activity
    • The funding required to support the health reform programme will also be given priority in 2004. Implementation projects following on from the Government’s decision on health reforms will be continued. In particular, funding will be provided for initial set-up costs for the interim Health Service Executive and, depending on progress on various aspects that require negotiation for initial steps in the implementation of the Hanly Report in the pilot areas.
  • The Minister also said that capital funds of €509 million will be provided in 2004 to facilitate further improvement of health infrastructure. This will allow for progress, from planning to construction, on projects including the following:
    • Mater/Temple St. Hospitals;
    • Our Lady´s Hospital for Sick Children – Radiology, Haematology/Oncology accommodation, MRI;
    • St Vincent´s Hospital, Elm Park, Phase I;
    • St James´s Hospital – A & E Extension ;
    • Coombe Women´s Hospital- planning for expanded I.C.U. and accommodation for Naas Maternity Services;
    • Cork University Hospital – Cardiac Services, Renal Dialysis Unit, Maternity Unit, A&E Department and Day Procedures Unit;
    • James Connolly Memorial Hospital – Refurbishment of accommodation for older people;
    • Incorporated Orthopaedic Hospital Clontarf – planning for replacement accommodation;
    • Midland Regional Hospital at Tullamore;
    • Beaumont and Nenagh Hospitals – Acute Psychiatric Units;
    • Our Lady´s Hospital, Cashel – Step-down facility, facilities for patients with Alzheimer´s disease, psychiatric services, services for physically handicapped;
    • St John´s Hospital, Enniscorthy – Unit for Older Persons; Hospital of the Assumption Thurles
  • The Minister also announced that funding being made available for Information Systems and Related Services has doubled to€60m. This capital funding will be used to bring the health services into the information age by supporting a number of “Enterprise Wide” system developments which, in turn, will lead to better, safer and more streamlined services for our clients and provide essential information for management of health services at all levels. This significant increase in investment in information systems is a direct response to the recommendations in this area as outlined in the Prospectus and Brennan Reports.
  • Bed Charges – There will also be an increase in the income for public hospitals from the charges raised by these hospitals from private beds; that increase will be 15% to give additional income of €20 million. This income goes towards supporting services in public hospitals and is part, therefore, of their budgets. Even with this increase, the cost of providing services to private patients in those hospitals is far greater than the income from the private insurance companies. In the major teaching hospitals, for example, it is estimated that the income from private beds represents less than half of the costs of treating private patients. In the interests of equity it is Government policy to gradually eliminate the subsidy. The increase being implemented will, in a small way, close the gap. There will also be an increase of €5 in the statutory in-patient bed charge, bringing it to€45 per night (to a maximum of 10 nights a year)
  • A & E Charges – Accident and Emergency charges are also being increased by €5 to €45. This increase will contribute to meeting the growing costs of providing A&E services but more importantly, it will facilitate more appropriate attendances at A&E Units.

Concluding Minister Martin said “today´s increase, which brings the total spending for health in 2004 to over €10 billion underlines the Government´s commitment to maintaining health spending next year. Sound management of the economy by the Government in tandem with our commitment to the reform will deliver a better health system”.