Limits to what savings can achieve in healthcare

The Secretary General of the Department of Health and the HSE CEO were recently before the joint Oireachtas health committee to talk about the productivity and savings taskforce.

The taskforce, co-chaired by Mr Robert Watt and Mr Bernard Gloster, was established earlier this year with the aim of optimising patient care within the constraints of current funding.

In his statement to the committee, Mr Watt stressed that simple “cost-cutting” was not the aim of the group.

“We are making the budget go further and maximising resources to deliver more with what we have,” stated the Secretary General.

“We are seeking savings across the management consulting budgets, medicine spend and non-pay expenditures. While this is challenging against a backdrop of high demand, these targets are intended to focus the service on where we are spending more in a cost-effective manner.”

Mr Watt added there were a number of questions the Department and the HSE needed to continue to ask
of themselves.

“Are we carrying out procedures across all the regions and sites at the same and best value? Are we ensuring that all diagnostics and tests ordered are needed and not duplicated? Are we maximising our procurement strength as a major purchaser of health goods and services?”

He said that, in the long-term, it
is unsustainable to increase health expenditure in line with demand each year.

In his presentation to the committee, Mr Gloster acknowledged that “demand for services is only going in one direction”.

“Demand is not only increasing in the number of people seeking services, but also in the range of conditions and the ever-growing options for responding, be that in diagnostics, procedures, or therapeutics.”

However, he pointed out that despite this trend, progress was being achieved in tackling waiting lists and meeting Sláintecare targeted timeframes (even though the numbers on lists are growing).

In addition, Mr Gloster noted the restructuring of the health service would have financial benefits.

“The revised structure of the HSE with six new regions and new regional executive officers puts us in a much stronger position to manage our considerable budget, with the ability to make funding and activity decisions much closer to the patient, where they are best informed,” he said.

In June the HSE, with the agreement of the Department of Health and the Department of Public Expenditure, NDP Delivery and Reform, had “achieved a very strong and certain position for our cash budget”, stated Mr Gloster. He added this enables the Executive to plan to the end of 2025.

The €25.8 billion announced for health in Budget 2025, which is €2.94 billion more than the 2024 allocation, was good to see.

While savings might contribute to making the system leaner, and occasionally more efficient, they are not a substitute for the strategic investment needed to maintain and expand capacity. Only through adequate resourcing can the healthcare system continue to meet the growing needs of the population.