Health & Children
Commentary

Overview:
The Estimates proposals submitted by the Department of Health & Children met the pre-Budget target approved by Government which required a reduction of €50m off the Existing Level of Service figure.

The Committee did not, however, agree with the manner in which the Department of Health & Children distributed the reduction of €50m. In addition, the Department of Finance advised that a further €114m would be required in 2003 to meet the ongoing costs of additional spending in 2002, not provided for in the Government decision on 2003 allocations.

The Committee has put forward savings proposals totalling €185m which would result in an allocation some €20m below the approved pre-Budget target.

Additional comments:
Increase in bed charges - Although this increase follows closely on the increase effected from 1 August 2002, bed charges remain well below the economic cost of hospital service provision. Implementation will require secondary legislation.

Increase in Threshold under Drugs Repayment Scheme - Again, it is noted that contributions by beneficiaries have not kept pace with the increase in costs to the Exchequer: drug recoupment outlays met by the Vote have risen by some 90% from €142m in 1999 (the year of introduction of the scheme) to the 2002 Estimate provision of €268m. Implementation will require secondary legislation.

Reduction in capital - In addition to the immediate reduction in the Exchequer funding requirement for 2003, the lower capital provision will reduce pressures for increased revenue spending in the medium term.

Efficiency savings across Health Boards - The proposed savings, of €30m, represent less than 1% of the block grants to health boards provided through subhead B1. In the Committee's view, the measures required to generate these savings should be decided by health board management, in a way which would increase efficiency and value for money while minimising any adverse impact on services to the public.