Health service will run with ‘guaranteed’ overspend next year, HSE boss says

Bernard Gloster, chief executive of the HSE, leaves Leinster House after the health committee meeting (Niall Carson/PA)
Bernard Gloster, chief executive of the HSE, leaves Leinster House after the health committee meeting (Niall Carson/PA) Bernard Gloster, chief executive of the HSE, leaves Leinster House after the health committee meeting (Niall Carson/PA)

Ireland’s health sector will have a “guaranteed” overspend next year, as it runs services for which it is not fully funded, the boss of the HSE has warned.

Bernard Gloster said it was unusual to have a deficit built into plans for 2024, but he made clear he was not prepared to cut services to make the books balance.

He said the budgetary picture meant the focus next year would be on “consolidation” rather than growth, as the HSE would be operating within a “constrained and challenging financial position”.

Giving evidence before the Oireachtas health committee, Mr Gloster rejected any suggestion the HSE was wasting public money, as he highlighted the challenges of soaring inflation, including energy costs that rose by 85% last year.

Mr Gloster said the health service was facing an overspend of about 1.5 billion euro for 2023.

The Department of Health had bid for an additional two billion euro to maintain existing levels of service (ELS) into 2024, but only received 700 million euro in ELS funding in a total budget allocation of 22.5 billion euro, meaning it is already facing a shortfall of 1.3 billion euro for next year.

Mr Gloster told the committee that the final budgetary picture will only become clear when ministers agree a supplementary estimate in the coming weeks to release money needed to address the 2023 shortfall.

That exercise may then see further funding committed to the 2024 baseline.

But he said whatever the outcome of the revised supplementary estimate process, the HSE would still be facing a guaranteed deficit next year.

“There’s one missing variable and that’s the supplementary revised estimate, that will inform the scale of the challenge next year,” he told the committee.

“But, even with that, we’re going to be in a financially pressured problem next year that will result in an element of deficit no matter how good I am at control.

“But I’m not planning to deal with that deficit by cutting services.”

Mr Gloster said only a third of the projected overspend this year was down to costs the HSE could control, with the remainder due to soaring medical inflation and the implications of an ageing population.

“Everybody wants to talk to me about the overspending in the health service, nobody wants to talk to me about the fact that when we changed our energy contract when it was up for renewal on the 1st of last April, our full year price on the previous year and on the planned next year on the day we changed the contract went up 85%, that’s not me being a waster,” he said.

“You know, the lights are turned on, our patients are looked after, MRI machines and so on.

“So I have accepted there is a control environment challenge, and that makes up about a third of our challenge, and I’m happy to take that on the chin and I’m happy to deal with it and correct it and I have very good plans in place to deal with that.

“But the notion that we’re just a complete bunch of wasters with public money, I absolutely reject that.”

Joint committee on health
Joint committee on health Colm Henry, chief clinical officer of the HSE, leaves Leinster House after the health committee meeting (Niall Carson/PA)

Before his appearance at the committee meeting, Mr Gloster has made clear in a number of public statements that the amount allocated to the HSE next year is not enough to run the health service at the same levels as this year.

Fianna Fail TD John Lahart praised the HSE boss for what he described as a “ballsy” approach to going public on the funding challenges.

Mr Gloster has already announced a recruitment freeze on some healthcare roles for the rest of this year.

He said it was because the HSE was on course to meet or exceed the number of roles it has funding for in 2023.

He said 2,200 additional roles would be filled next year.

Mr Gloster said the budget would have two main consequences for the coming year.

“The impact of us not achieving what we wanted to achieve for 2024 I would say is under two headings,” he said.

“The first is there is no doubt there will be an element of deficit in the accounts for next year because the only alternative to that will be to cut services.

“And, to be fair, I haven’t been asked to do that. So, that’s the first thing. So how we deal with the challenge next year becomes the issue.

“And the second impact of next year is there will be a slower pace of development of different strategies than there has been for the last two or three years.

“So we will consolidate what we have. We will do the best we can with them.

“There’s lots of work we can do, it’s not all doom and gloom, but we won’t grow out our development strategies as fast as we would have liked to, that’s essentially the impact.”

Secretary general at the Department of Health, Robert Watt, also gave evidence during the three-hour committee hearing.

Bernard Gloster
Bernard Gloster Bernard Gloster said he rejected the suggestion that the HSE was wasting public money (Niall Carson/PA)

He acknowledged there was a need for “better budgetary control and more efficiencies and savings” in the short term, while continuing to deliver longer term reform of health services.

He said the Slaintecare plan offered a “roadmap” for achieving reform and improving productivity, with greater amounts of care delivered closer to home.

“We need improved pathways, new ways of working and further development of our community-centred model of care,” he said.

“Public health initiatives, in particular the early and continuous prevention of illness, and the promotion of healthy ageing, will be integral to the effective functioning of our healthcare into the future.

“There is simply no prospect of continuing to treat ever-increasing numbers of sick citizens, ill citizens in acute hospitals, under our existing structures and pathways.

“Ultimately, we are aiming for a country where patients are able to live longer, better lives, and are not only treated but supported by our healthcare services in achieving this.”