Press Release

Tánaiste rejects criticism that €12.6bn in health spending is not enough

The Tánaiste and Minister for Health and Children, Mary Harney, T.D., today rejected as ‘unfounded and misguided’ criticism that the health spending increase announced yesterday was insufficient.

“Yesterday we announced a €1 billion year-on-year increase in health spending, more than 9 per cent.”

“This is more than three times the rate of inflation. It is more than economic growth, meaning that public health spending as a proportion of GNP is rising.”

“The OECD recently confirmed that Irish spending on health has gone from 15 per cent below the OECD average to 17 per cent above in the period 1997-2003.”

“We can fund this increase because of the strong performance of our economy. Some large countries in Europe, for example, Germany and France, are increasing health spending by about 3 per cent. In Britain and Northern Ireland, planned growth of around 7 per cent in health spending is viewed as a major increase.”

Not falling behind health care inflation

“In this context, it is nonsense to suggest that the concept of ‘health inflation’ requires increases of more than 9 per cent to stand still in delivering health services.”

“Most of our health budget – over 60 per cent – is not allocated to hospital procedures but to primary, continuing and community care. To use the cost drivers of complex hospital procedures and drugs to create an overall health inflation figure that has to be applied across the entire health budget is misguided.”

“The cost drivers of complex health care are very similar in developed countries. However, new technologies can also save money and increase efficiency, if applied properly.”

“There is nothing particular to Irish health services that would require our country uniquely to increase health spending in double digits every year in order to stand still.”

“We are not, of course, standing still. Significant new services over and above those provided and introduced in 2005 will be enabled by more than €250m in new funding next year. These new services will be visible across many areas, from disability and mental health, primary care, hospital services including Accident and Emergency and shortened waiting times for operations.”

“Health care inflation would, however, spiral upwards if we substantially increased wages and payments to clinicians without any increase in service levels to patients. Pay moderation in health is important for new services development.”

“It is also a misinterpretation to confuse the different concepts of ‘existing level of services’ with ‘health care inflation’. The former is made up of many elements in addition to price or wage increases. For example, it takes account of increases in the population or particular groups within the population, changes in disease rates from year to year and variations in drugs prescribing.”

Hospital bed numbers

“In relation to hospital beds, there continue to be misleading claims made that we are putting in place less acute bed capacity than is the case.”

“In 2001, the average number of beds available for treatment of patients in public acute hospitals was 12,144. The latest hospital returns for August 2005 show that this number has risen to 13,244, an increase of 1,100.”

“These are the facts as reported objectively by hospitals and available to anyone who asks.”

“To these must be added about 2,500 acute beds in private hospitals to see the full extent of acute hospital capacity in the country, that is, nearly 16,000 beds.

Part of this new capacity has been achieved by funding entirely new beds. Funding has been provided for 900 since 2001; 806 of these are in place now and the remaining 94 will come on stream very soon.”

“Suggestions that all these beds should be in-patient beds – that is, involving an overnight stay by patients – are out of touch with modern practice in hospitals around the world. In the interests of patients and of efficiency, as many surgical and other procedures as possible are now done on a day basis.”

“Bed capacity in acute hospitals is about having the staff, the equipment and the setting to treat patients appropriately, not about overnight stays by patients.”

“It is simplistic to suggest that vastly more in-patient hospital beds, to be provided more or less instantly, is the solution to our health challenges.”

“We are increasing public bed numbers substantially, both by direct provision and by the initiative I announced to free up public hospital beds by moving private beds to new facilities.”

“Equally important is reform in the way we use hospital bed capacity, as well as building up primary and community care.”

Conclusion

“I welcome debate on the level of investment we are making in health and on the best use of that investment.”

“I believe it is clear to most people by now, and to taxpayers particularly, that simply scaling up the present health system with ever-greater spending increases is not the way to achieve sustainable and better services for patients. I am determined that the pace of our spending increases will be matched by the pace of reform.”