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There are serious concerns for the sustainability of future healthcare spending in light of the rapid increase in expenditure over recent years, the Department of Public Expenditure has argued.

In a review of oversight and management of health spending, published with the Budget on Tuesday, it said staffing levels, pharmaceutical costs and expenditure arising from medical litigation were driving the rise in spending which has seen an additional €2.6 billion provided between 2016 and 2018.

The review is highly critical of the budgetary management process in the Department of Health and the HSE. It says the health service has “consistently failed to manage within its annual budget allocation by significant amounts”.

“In recent years it appears that unrealistic planning assumptions were created from the outset to give additional headroom to spend beyond available funding.

“This additional expenditure must be funded by Government as areas where assumptions are made tend to be critical service areas.

“This has resulted in health overruns and the provision of supplementary funding. At its simplest level, budget management and health sector planning could be significantly improved.”

The review, drawn up by staff in the Department of Public Expenditure maintains that the HSE has not fulfilled all of its legislation requirements in drawing up its national service plan - its agreement with the Government on how its budget will be spent.

Minister for Health Simon Harris responded by saying health was a demand-led service that had to deal with increasing numbers of patients. “We can’t just tell sick people to come back next year.”

Cancer and stroke services, and life expectancy, had all seen significant improvements, he pointed out, and while the health service faced challenges, reforms were underway. A new chairman of the HSE had recently been appointed and board members and a director general would follow soon.

Most of the health spending initiatives in Budget 2019 were well flagged in advance, including the provision of an additional 100,000 GP visit cards, a 50 cent reduction in prescription charges for over-70s and a €10 reduction in the monthly threshold for the drugs payment scheme.

Mr Harris has also announced funding for 100 therapy posts to address a backlog in carrying out assessment of needs, and the extension of the HPV vaccination programme to teenage boys.

Funding is also being provided for abortion services from next year and for an action plan for women’s health.

Mr Harris said over €200 million is being allocated for a strategy to implement Sláintecare, which was published by the Government last August. However this heading includes most of the initiatives mentioned above, he clarified.

“We are now firmly in the era of Sláintecare. We have a significant fund for implementation of key measures envisaged by Sláintecare including a ring-fenced fund for integration of care. In framing the 2019 National Service Plan, we will be charging the HSE with using the significantly increased resources to deliver on Sláintecare,” he said.

Speaking at the post-Budget briefing on Tuesday, the Minister said 600 new hospital beds would be created in the next few years. The first 78 of these would be opened in the first quarter of next year, mostly in Clonmel and Drogheda.

Anther measure designed to avert overcrowding in hospitals this winter include spending of €10 million to the end of the year on delayed discharges and stepdown care.

About €9 million is being provided for extending the HPV vaccinne to boys and providing HPV testing under CervicalCheck, while €12 million has been allocated for abortion services next year.