Address by the Minister for Health and Children to the Select Committee on Health and Children, Estimate for 2005

Chairman, I am very pleased to have the opportunity to address the Select Committee today on the Revised Estimates for 2005 for the Health services.

This year, for the first time, the Estimate covers the separate votes of my Department and of the Health Service Executive.  This reflects the major structural reform we have undertaken in creating the HSE and in giving it its own Vote.  The creation of a separate Vote brings the highest level of direct accountability by the HSE.

The Revised Estimate for 2005 for Votes 39 and 40 combined shows a total gross estimate of €11.941 billion for health services.

Vote 39 contains funding for my Department and allows a level of gross expenditure of some €401m and net expenditure of €233m.

Vote 40 contains the funding for the Health Service Executive for day-to-day expenditure on health and children’s services. The gross provision for the HSE is €11,540m and the net exchequer funding is €9,555m..

The total of €11,941 million consists of €11,356 million current funding and €584.5 million capital funding. Of the €11.3 billion current funding, €543m relates to HSE income not previously included in the Vote and €217m relates to once-off technical adjustments, which of themselves do not give rise to increased expenditure, arising from the HSE having a separate Vote. Excluding these items, which allows us to compare like with like, the increase in current funding over 2004 is 10.8%.

Health Spending

The success of our economy has allowed us to treble health spending in real terms since 1997.

The OECD reports that Ireland had the fastest growth of all OECD countries in spending per capita on health in the period 1997-2002, at 67 per cent.

Cross country comparisons are difficult, but the latest OECD data show that Ireland’s spending per capita on health exceeded that of the United Kingdom in 2002. This was using the technical measure of US Dollar Purchasing Power Parity.

The UK’s 2004 Spending Review shows that total UK public sector health spending will be £88.6bn for 2005-06.

This approximates to €2,200 per person in the UK.

Ireland’s total public sector health spending is now about €3,000 per person.  Even if technical adjustments are made for relative price levels and to exclude certain categories of spending for cross country comparisons, our per capita health spending, and public spending also, can be reliably estimated to be significantly in excess of UK levels.

Our capital budget for health this year is about €146 per person.  This is nearly 60 per cent higher than the UK, which will invest about €92 per person.

Health spending growth in major European countries has been much lower in real terms than in Ireland.  Countries like Germany and France are trying to keep growth in spending to about 2 per cent in real terms.   Our growth in real terms was about than four times this level, at about 8 per cent.

I believe this must be taken into account when people claim that the government is not providing enough funding.  Our economic strategy is generating substantial resources, and the government is allocating resources generously.  In some people’s eyes, we are doing so at an excessive growth rate.  I don’t agree, but there is a valid question being put:  what is a sustainable level of growth in health spending?  Major economies say 2 per cent;  the debate in the UK at present is about a 6 per cent target.

Those who call for even higher increases in spending on new services also have to answer the question as to whether they agree with the substantial wage increases the government have provided in the health sector in a particular.

Results from investments

The extra investment over recent years has brought about significant results, including record levels of activity in the acute hospital system and a whole range of additional services provided across all care programmes.

The investment has meant that there have been significant improvements in our health since 1997. Achievements include:

  • people living longer
  • people getting treatments faster
  • people getting to see more specialists
  • people living and working in healthier atmospheres
  • people with disabilities finally getting priority and support.

Chairman, I would now like to outline some of the features of this year’s Estimate, beginning with Acute Hospital Services.

Acute Hospitals Programme

  • €50 million of additional funding has been provided for the commissioning of a number of new units in acute and non-acute facilities throughout the country which have been funded under the National Development Plan.
  • In–patient and day case discharges from acute hospitals amounted to 1,040,181 for 2004.  This figure represents approximately 2,850 patients per day being discharged each day.  Total discharges for 2004 show an increase of over 33.4% since 1997.
  • Significant investment has been made in additional specialists and diagnostic and investigative processes.
  • Improved and expanded Emergency Medicine Departments are being provided through capital funding in many acute hospitals throughout the country.

A and E 10 Point Plan

Additional current funding of €70m is available this year for development of A and E services. There is progress being made on each of the ten actions that I announced.  The HSE provides my Department a regular update on each of the actions and I would like outline to the Committee some of the progress made so far.

  • The HSE/Eastern area has had very positive discussions with both public and private sector providers for the development of additional minor injury facilities in Dublin.
  • It is expected that the second MRI for Beaumont Hospital will be available from this autumn.
  • Planning is continuing on the provision of acute medical units at Tallaght, St. Vincent’s and Beaumont hospitals. The proposals are being finalised and will be examined to ensure effective and efficient responses to improvements in A and E.
  • The tender process for the provision of high dependency beds in private nursing homes is in the final stages.
  • 90 beds have been procured to allow for the provision of private nursing home intermediate care for 500 patients annually. Some patients have already been discharged from acute hospitals into these beds.
  • We have begun to provide the 500 additional home care packages to assist patients in their discharge from hospital.
  • Productive discussions are now underway with GPs based in the northside of Dublin city to establish the badly-needed out-of-hours GP service there. It will be established this year.
  • The Director of the National Hospitals Office is finalising arrangements for the establishment of a national audit and an inspection process to measure and improve cleanliness in all acute hospitals.
  • We will procure a range of diagnostic services from private hospitals to allow GPs access more diagnostics and help patients avoid A and E.

The actions to improve the delivery of A and E services take a wide ranging approach, improving patient flows through A and E departments, freeing up of acute beds and providing appropriate longer term care for patients outside of the acute hospital setting.

These are actions that address the real factors causing delays in A and E. They are not quick fix solutions, because there are no quick fix solutions.

There are other steps that can be taken that do not have funding requirements, such as improving management processes in our hospitals.  The HSE’s National Hospitals Office will be addressing these too.

Cancer Services

Additional revenue funding of €23.5m has been made available in 2005 for cancer services.  This includes €11.5m allocated to open the Radiation Oncology Department at University College Hospital, Galway (€9 .5m) and to expand the Radiation Department at Cork University Hospital (€2m).  The Radiation Oncology centre at Galway commenced treatments for radiotherapy in March.

Funding in the region of €21m has been earmarked for the development of the BreastCheck clinical units at Cork and Galway.  A further €3m has been earmarked for the development of the symptomatic unit at Galway and the design briefs for both BreastCheck units have been completed.  The advertisement for the appointment of a Design team will be placed in the EU Journal in the coming days.

I remain confident that Breastcheck will be available in all parts of the country by the target date of 2007.

National Treatment Purchase Fund

An additional €20 million is being provided for the National Treatment Purchase Fund. This will bring the total available to the Fund in 2005 to €64 million. To date, the Fund has facilitated the treatment of 27,000 patients and waiting times have been reduced greatly.  The additional funding will allow the Fund to arrange treatment for 17,000 patients in 2005, which is 30% above the estimated figure for 2004.

Bed Capacity Initiative

In September 2004 the announcement of the opening of new units included a further 200 beds bringing the total number of in-patient beds/day places since 2002 to 900. At the end of March 2005, 713 additional beds were in place. Funding is being provided in this year’s Estimate to enable the remaining beds to come on stream before the end of 2005.

Pre-Hospital Ambulance Services

The main developments which are being put in place in the ambulance service include:

  • The introduction of the Advanced Paramedic Training Programme.
  • The introduction of two-person crewing on ambulances..
  • The elimination/reduction of on-call arrangements.
  • Upgrading the ambulance fleet and equipment.

Renal Services

Additional revenue funding of over €8 million is being provided in 2005 to develop renal services in response to increased demand.

This, along with previous investment, will support the development of renal services on a regional basis. More patients than ever before are now accessing renal dialysis units. The number of patients on dialysis has increased from 641 to 1,210 between 1998 and 2004, representing an increase of 88.7% in six years.

Child Care Services

€5m in additional funding for Child Care services is available in 2005 and is being allocated to address the following issues:

  • Further implementation of Children Act 2001.
  • Additional staff for the Special Residential Service Board.
  • More Community Based Programmes – Springboard (targeting at risk children), Youth Advocacy Programmes and Teen Parent Support
  • Funding for implementation of Family Support Strategy


Legislative proposals based on the outcome of public consultation on Adoption were approved by Government last December and a document outlining the consultation was launched in January this year. The first significant step following the discussions was the recent launch of an adoption Contact Preference Register and the response has been extremely positive.

Disability Services

Services for people with Intellectual Disability and those with Autism

An additional sum of €40m is being allocated to services to Persons with Intellectual Disability and those with autism.

This new funding will –

  • provide 270 additional residential places;
  • put in place approximately 90 extra respite places;
  • provide around 400 new day places;
  • improve specialist support services for people with major challenging behaviour;
  • provide €2m to meet costs associated with moving individuals to more appropriate placements.

Services for Persons with Physical or Sensory Disabilities

An additional sum of €15m is being allocated to provide:

  • About 60 new places for people with significant disabilities who are currently placed in inappropriate settings;
  • About 200,000 extra hours of home support and personal assistance in line with the current philosophy of independent living for people with disabilities;
  • Additional funding of €3m for aids and appliances;
  • Approximately 90 extra rehabilitative training places;
  • Additional funding to voluntary organisations

Mental Health Services

An additional sum of €15m is being allocated to:

  • provide and staff an additional 14 beds at the Central Mental Hospital;
  • further develop child and adolescent treatment services
  • expand community-based adult mental health teams;
  • provide additional community residential places;
  • open new mental health facilities;
  • support voluntary organisations.

Mental Health Commission

Additional funding of €10 million is being made available to the Mental Health Commission in 2005 to facilitate the Commission to put in place the various mechanisms required to support the Mental Health Tribunal process. The total funding available for the Commission is €15.464m in 2005.

Developments in Services for Older People

The Government is deeply committed to the development of a comprehensive range of services for older people.  Funding for all services has increased substantially in recent years across all areas such as

  • Nursing Home Subvention Scheme
  • Home Care Grants
  • Home Help Service
  • Elder Abuse Programme
  • Support to Voluntary Organisations

The last six months have seen an increased focus on services for older people, particularly long term care services.

The public, and in particular the more vulnerable members of the community, have a right to know that services and charges for services are on a sound legal footing.  My Department and officials of the Attorney Generals’ Office and the Department of Finance are engaging in considerable work now to correct past mistakes and to achieve this objective.

The cost of the repayments scheme we will put in place is not reflected in this year’s Estimate yet.  A supplementary Estimate will clearly be required. I will very shortly bring a Memorandum to Government for the repayment scheme.

The €40 million we set aside for the earlier ex-gratia payment scheme is included in the Revised Estimates Volume under B14.

Regulations will be shortly brought into effect to enable long stay charges to be reinstated under the new Health (Amendment) Act 2005.

Clearly, policy on long term care is about much more than charges and the law. For that reason, the Minister for Social and Family Affairs and I have asked an interdepartmental team to report back to us in summer on follow up to the fundamental issues for a sustainable and integrated programme of long term care set out in the Mercer and O’Shea reports.

Tobacco / Smoke Free Workplace Initiative

Additional funding of almost €1.4m is being provided for Tobacco Control. This includes funding for:

  • Additional funding for the Office for Tobacco Control
  • Funding for the Research Institute for a Tobacco Free Society
  • Funding for the HSE for the further development of tobacco control in the context of compliance building and enforcement measures

One year after the introduction of smoke-free workplaces, the compliance is very high at 94%.


Since the launch of the Cardiovascular Health Strategy €60m has been invested which has provided for the appointment of almost 800 new staff.  Death rates from coronary heart disease are decreasing steadily and in the under-65s are approaching those of the former 15 EU Member States.

The Heartwatch programme in general practice for the secondary prevention of cardiovascular disease which was introduced in 2002, has recruited approximately 10,500 patients with identified coronary heart disease and diabetes and over 40,000 patient consultations have taken place.

Food, Medicine and Environmental Health Issues

Additional funding is being provided for Food Control and Medicines Issues as follows:

  • • Additional funding of €2m for the Irish Medicines Board for the implementation of various EU Directives
  • • €0.7m for the FSAI for European legislation on the Hygiene of Foodstuffs and the Official Control of Food and for the National Committee on Folic Acid Food Fortification
  • • €.04m for the HSE for food control services

General Medical Services

The Government is committed to giving more people free access to their GP through the General Medical Services.

We have provided funding this year to allow 230,000 more people have free GP visits, through a combination of the traditional medical card and the new doctor-only medical card.

Approximately 1.38 million people will have access to free GP care. The higher rate of increase in respect of the allowances for children is specifically aimed at assisting low income families with children in accessing primary care services.

We have changed the income guidelines in order to achieve this. Our policy is to deliver this benefit to people on low incomes and we will do all in our power to achieve it, including reviews of uptake and engaging with the IMO to ensure doctors participate fully.  I would appeal once again to the IMO to address this issue positively with us and I hope that discussions that are presently underway will produce results.

The two initiatives will assist in overcoming barriers to accessing GP services in the case of those on low incomes.  They will also help in removing poverty traps and disincentives to people taking up work or progressing to better paying work.

In addition to the increase in the number of Medical Cards, referred to above, further funding of €142 million is being made available to meet the increased cost of the Medical Card Scheme.  This represents an increase of 12 per cent.

An additional €5m is provided in 2005 for Out of Hours co-operatives to allow GPs to put in place arrangements to provide services to their patients while their surgeries are closed in the evenings, on weekends and bank holidays. In addition, €3m has been provided for the expansion of the period of GP Vocational training, in line with the training programme accreditation requirements of the ICGP, to 4 years.

An additional €5m in revenue funding has been provided to support the implementation of the Primary Care Strategy. Work is underway with the Department of Finance to examine the issue of tax incentives for the development of primary care facilities, a something which has been sought by GPs.  This is taking place in the context of the general review of tax incentives announced by the Minister for Finance.


Additional revenue funding of €4.348 million was allocated for increases in the Dental Treatment Services Scheme. Since 2001, significant decreases in the orthodontic waiting lists for both assessment and treatment have been made from the additional investment over the years.


Funding of €1.56m has been provided to the HSE in 2005 for the further development of drug treatment services and harm reduction programmes, including needle exchange programmes. Funding of €1.180m is also being provided to the HSE in 2005 for the further development of its HIV/AIDS/STI services, including a special Budget Day allocation of €0.5m for groups involved in projects under the National AIDS Strategy.

Personnel Management and Development


Additional funding has also been provided in 2005 for:

  • over €40m additional funding for the Nursing Degree Programme to complete the transfer of nurse education from diploma to degree level. The funding also makes provisions for increases in capitation fees, salaries for nursing students on rostered placements and the sponsorship scheme for the degree programme.
  • €4.5m for various nurses pay agreements
  • an additional €2m for initiatives by health service employers for the overseas recruitment of nurses.

Hospital Charges

Bed Charges

In the interests of equity, it is Government policy to gradually eliminate the effective subsidy for private stays in public hospital beds.

There will be an increase of 25 per cent in the charges raised by hospitals from private beds.  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 the major hospitals remains significantly greater than the income from the private insurance companies, in many cases.

There will also be an increase of €10 in the statutory in-patient bed charge for non-medical card holders, bringing it to €55 per night (to a maximum of 10 nights a year).

The combination of bed charge increases will yield about €50 million a year.

A  and  E Charges

Accident and Emergency charges are also being increased by €10 to €55 to facilitate more appropriate attendances at A and E units by reducing an incentive for people to attend A and E when they might appropriately receive services from General Practitioners.

Research – Health Research Board

Funding for the Health Research Board (HRB) for 2005 is €27.147m. This represents an increase of 29% over 2004. The 2005 revenue figure represents a total increase of 313% over the corresponding 1999 allocation. Capital funding of €10m is granted to the HRB in 2005 in the context of the ongoing implementation of the Health Research Strategy.

Health Capital Investment Framework

Record levels of capital funding are now available for investment in health service facilities. The total funding envelope for the Health Capital Investment Framework (CIF) 2005-9 is €3.255 billion, compared to the previous total funding of €2.734 billion envisaged for the period 2004-8.  It includes a total PPP allocation of €275 million.

A sum of €585 million is being made available this year, which is an increase of 13% over the funding of €509 million in 2004.

Budget 2005 provided for an additional €110m capital funding. This will be prioritised towards new initiatives in the Disability Sector, developing A and E services throughout the country and proceeding with other projects in the Framework.

Our capital plan also allows for completion of a major building and equipping programme to support the new Nursing Degree programme.

Reform Programme

Significant progress is being made on the health reform programme. A new Health Bill is being drafted in 2005 to provide for the establishment of Health Information and Quality Authority and the Social Services Inspectorate on a statutory basis. Earlier this year, I established an interim HIQA, primarily to make the necessary organisational preparations for the HIQA to be established under primary legislation.


Chairman, unprecedented levels of investment are now being made by this Government in our health services.

The task for us now is to transform this investment into tangible benefits for patients and staff so as to deliver the world class health service that everyone wants. This is not a simple task.

Nevertheless, I believe that our health professionals are now providing a high quality service, supported by very significant funding.

The task ahead is to make all our new investment work more effectively for patients.  The system, as it is called, is changing, but we need more change and reform in day to day work practices and procedures that will improve services for patients.

The changes in administrative structures are an important start, an essential preparation for the implementation of more reform for patients.