Wednesday 17 January 2018

European Commission warning: Healthcare sector overruns sign 'deep structural reform' needed

Commission also warns on high debt, unemployment and lack of digital skills

The numbers signing on the live register dropped in the last month
The numbers signing on the live register dropped in the last month

Donal O'Donovan and Ailish O'Hora

Constant spending overruns are a sign the Irish healthcare sector may need “deep structural reform” the European Commission has warned.

The failure to keep health spending within budget, even after “efficiency gains” made in recent years is highlighted as a key concern in a wide ranging European Commission report on Ireland published today.

“Expenditure overruns have been recurrent in the past few years which shows that while efficiency gains have been achieved in recent years, the health system may have reached a point beyond which containing expected cost increases would imply deeper structural reforms,” the report said.

Government health spending is higher in Ireland - at 8.7pc of gross domestic product(GDP) - than the European average the report noted, compared to the 7.3pc average.

However, despite spending more, our so called health outcomes are only in line with the rest if the European Union average, the repot said.

The report noted that Ireland’s two tier system of overlapping private and public health provision is unusual and complicated, by European standards.

It warned that delays in a planned shift to a universal health insurance model could have a negative impact on the health insurance market, and it said the budgetary impact of the initial phase of that planned shift – the roll out of free-GP care initially for the under 6s - needs to be monitored.

The Commission also warned that we need "decisive policy action" on a range of issues, despite the recovering economy.

The report added that risks remain including the Irish Water model and that it may not be able to be kept off balance sheet.

A ruling in April will decide whether that is the case while the Commission also said that there are questions as to whether the utility will have the power to borrow on open markets.

It also said that we suffer from a digital skills gap, that there are high levels of public and private debt and high structural unemployment as well as legacy banking issues.

The report added that the Government needs to take "decisive policy action" in a bid to address issues in the economy.

The commission has a six-step imbalance procedure by which it grades the severity of the macroeconomic issues facing each country - one being the lowest and six the highest level.

Ireland is currently at four, which is down from six over the past two years.

Right now, the commission is more concerned with Italy and France.

Read full report here

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