Trying to work out when a budget increase is an increase, a continuation of the status quo or a decrease has become one of the more complex modern pastimes, particularly for those of us without financial, accountancy or actuarial qualifications, writes Maureen Browne.
Trying to work out when a budget increase is an increase, a continuation of the status quo or a decrease has become one of the more complex modern pastimes, particularly for those of us without financial, accountancy or actuarial qualifications.
Senior health managers listen in delight when they hear there will be a health budget increase, then pause when they hear that it is an increase on the allocation, not the outturn for the previous year. Their anxiety mounts as they learn that a percentage of the increase will depend on those dreaded “once-off revenue measures “which may or may not result in the projected savings. As they reach for their calculators, comes the news that a substantial skelp of “the increase” will depend on savings which have been identified, but in light of bitter experience they fear may never materialise.
In fairness to the Minister, he has fought hard for an increase and perhaps we have got an increase.
To further complicate matters, there are also the questions of exchequer funding and the funding which is to come from the service providers, gross funding and net funding, ring-fenced funding, decreases which are not in fact decreases and the dreaded medical inflation, which is rarely mentioned in budget announcements these days.
By the time I get to this stage, my befuddled brain is scarcely able to register the fact that the increases make provision for badly needed new services which may – and probably will – outrun the sum allocated to them and I start wondering what other services will be cut as a result, when the new services will get off the ground or will they get off the ground at all and might there be a few bob saved there.
Then of course you need to grapple with the dilemma of what exactly the budget means to a particular service, if it will help cope with demand and waiting lists, if it will be sufficient to develop the service, finance new technologies, if it will in itself create new demands and new financial pressures.
And so it is with the 2015 health budget which was recently announced. It would be wrong, and it is not my intention to single out Health Minister, Dr. Leo Varadkar for any particular criticism on this issue. In fairness to the Minister, he has fought hard for an increase and perhaps we have got an increase and it is my lack of expertise, cynicism and the convoluted nature of the announcements which have contributed to the confusion. In mitigation, I plead that many people out there do share my confusion.
The Minister did tell us very clearly that the total gross health budget for next year will be €13.079 bn.
The €25 million for delayed discharges is to be managed centrally and the HSE is currently working out how this money can best be used to release these beds back to acute care.
This, he said, is equivalent to an increase of €305 million, compared to the 2014 allocation of €12.774 bn. Since the health spend this year will, at a minimum, be €500 million more than the original allocation, this brings the outturn for 2014 to about €13.274bn. So does that mean that the budget for 2015 will be €195 million less than the total spend for the current year?
Perhaps not, because in addition “once-off measures amounting to some €330 million have been identified which will support expenditures in 2015. Then savings of €130 million have been identified in procurement, the cost of medicines and the cost of agency staff.” These measures, the Minster assures us will allow the HSE to develop a service plan with in excess of €750 million more to spend on services than we had this time last year. He does however add that it is correct to point out that this does not take account of service overruns of about €500m this year, which will recur next year.
“But no matter how you calculate it, it is an increase in funding for health services,” said Dr. Varadkar.
The Minister has allocated specific funding to deal with delayed discharges, mental health services and money to extend BreastCheck to women aged 65 to 69 years, all of which are to be welcomed.
The €25 million for delayed discharges is to be managed centrally and the HSE is currently working out how this money can best be used to release these beds back to acute care and in the process support Emergency Departments, in the most sustainable fashion. There are at present about 800 delayed discharges in our acute hospitals, 75 per cent of whom are long term care related and the remainder predominantly in need of home care packages. The whole issue is further complicated by the fact that there is still no clarity on whether the allocation for the Fail Deal will be increased or not.
It is also hoped that a new amendment to the Finance Act which will raise the level of tax relief available to employ a professional nurse or carer in the home from €50,000 to €75,000 per annum which should free up nursing home beds which could then be used for others currently on a waiting list. The Minister hopes that it should also relieve pressure on hospitals as he believes a proportion of the 800 delayed discharge patients from hospitals could be cared for in their homes if their families had some further assistance.
The budget also introduced two measures which will help to acknowledge and value kidney donors. The Minister for Finance has decided to exempt the reimbursable expenses of living kidney donors for income tax purposes. Minister Varadkar is also to launch a new policy to reimburse the expenses of living kidney donors. Under this new policy, the reimbursement process will be managed by the HSE and will set out procedures, rates and upper limits for each reimbursable item, including procedures in relation to the reimbursement of loss of earnings for employed and self-employed donors.
The health budget also provides a capital allocation of €382 million compared to €390 this year. The Minister said the apparent €8m reduction in capital is not a real reduction, as the expenditure “was dependent on sales of surplus assets and these sales have not materialised in recent years.” The 2015 budget will go towards five capital programmes – the new children’s hospital, the new mental health campus at Portrane, the national maternity hospital and the development of primary care centres and community nursing homes.
Dr. Varadkar said that the capital budget for health will increase by €70 million from 2016 onwards, an increase of 18%, which will allow planning for new primary care centres and community nursing units, and new capital investments in the cancer facilities programme. It will also allow investments in ICT, where existing systems and the level of integration are not appropriate for a modern health service.