No relief for sickest and poorest in Budget 2011

Posted in Articles by saraburke on December 14, 2010

See here for my analysis of the budget implications for health published in today’s Irish Times, with a few of the bits they left out added back in! And my mega typo corrected…

LISTENING TO Brian Lenihan’s Budget speech, you’d think the health services were going to be untouched by austerity in the years ahead. Although health services make up 27 per cent of current spending, they are just under one-third of the €2.2 billion in cuts outlined, yet they did not even get a mention.

Like much of this Budget, you have to read the annexes to work out the consequences for the health of the people of Ireland. One thing is clear, this Budget will push many more people into poverty, it will lead to greater levels of poor health and shorter lives, particularly for those who are already poor, disabled or sick.

Cuts in social welfare, €1 off the minimum wage, increased tax bands and the unpredictable nature of the universal social charge will all result in lower incomes for the poorest. The link between poverty and ill-health is now incontrovertible – the poorer you are, the poorer your health, the lower your life expectancy. Quite simply, Budget 2011 will be bad for people’s health.

Writing on these pages last week, Tim Callan and his colleagues in the ESRI said that budgetary measures have “been strongly progressive”, ie, the last four budgets impact more on the rich than the poor. However, their analysis excludes the cut to the minimum wage (strictly speaking it was not a budgetary measure) which has the potential to reduce the income of the poorest 5 per cent of the workforce by 11 per cent. It does not include non-income taxes such as VAT, which we know impact most brutally on the poorest.

Their analysis demonstrates that this Budget means the richest fifth of Irish families lose 2.7 per cent in disposable income, but also that the poorest and second-poorest fifth of the population lose 2.8 per cent and 1.7 per cent of their disposable income. It is not rocket science to figure out this will have a much bigger effect on the day-to-day spending power of the poorest sections.

Reducing social welfare to €188 per week means these people are now €36 below the Government’s “at-risk poverty” line, guaranteeing that many, many more people will be in poverty in 2011 and beyond. Also, for the first time, people with medical cards will have to pay the social insurance levy. Previously they were excluded from the health and income levy, so this is another hard hit on the poorest and sickest.

The previous three budgets had a consistent impact on users of the health services – transferring payment from the State to the patient through higher charges for prescription drugs, for beds in public hospitals and for emergency departments. This Budget saw no such increases apart from realising the Government policy (since 1999) of charging the full cost of private patients’ care in public hospitals, which is bound to result in higher insurance premiums.

The overall health budget is down €746 million next year, €693 million of which results in a 6.6 per cent cut for the HSE. This is on top of this year’s 5 per cent cut. One cannot understate the challenge of taking three quarters of a billion out of the health budget and the struggle for HSE management and staff to provide the same amount (or more) of care, to more people, with less money and fewer staff.

According to Minister for Health Mary Harney, it is possible to do this through non-frontline cuts. Her department outlines how it will be done through savings made in fees paid to professionals – the department just negotiated a €48 million cut in GP fees and an additional €200 million from a reduction in drugs costs, achieved by hard bargaining by the new HSE CEO Cathal McGee with pharmaceutical companies. Another €200 million is to come from other “non-core pay costs” such as procurement, reduced agency and locum staffing.

The badly orchestrated voluntary redundancy and early retirement schemes will save less than expected next year, with the department’s figure of €123 million (originally it was €200 million) now seeming like another over-estimation. The health estimates specify that disability and mental health services should not be hit by the “across the board expenditure cut” ie, the 6.6 per cent HSE cut. These services will be cut by just 1.8 per cent.

An unpublished letter from Harney to the chairman of the HSE board, Frank Dolphin, dated December 1st, 2010, specifies hospitals should take a 3.2 per cent cut in budget (equivalent to €150 million) – reflecting the policy of moving care from the hospital to the community. However, with no increase in the budget of primary, community and continuing care services, this remains mission impossible for the HSE.

There is an extra €115 million for additional medical cards which will inevitably be needed in 2011. However the decision to impose the universal levy on medical card holders simply reinforces the accurate public perception that this budget targets the poorest, the sickest and their carers.

On a brighter note, Budget 2011 earmarks increased money for cancer care (€10 million), homecare packages (€8 million), child protection (€9 million) and Fair Deal (€6 million) – all welcome and much required. Lenihan’s announcement of the monitoring of quality of life measures, so that Ireland’s progress is not just judged by its economic performance but by health and social wellbeing measurements, was very welcome. Similar initiatives are happening in France and England under stewardship of Sarkozy and Cameron.

In the final sentences of Brian Lenihan’s speech he said this Budget “is a substantial down payment on the journey back to economic health”. The verdict is still out as to whether these measures will lead to economic health. And the odds seem against it right now with no jobs stimulus, no wealth or property tax. However, one thing is certain – that if such quality of life measures were used to assess current government action, the judgement would be that this budget is bad for everybody’s health, especially the health of the poorest.


3 Responses

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  1. Danny Murray said, on December 16, 2010 at 5:35 am

    Hi Sara,

    Thanks very much for mentioning the Medical Card issue in your article.

    You are one of the few commentators to raise this issue, which will cause further hardship and increase anxiety within a cohort of people who are already surviving on means-tested low incomes, or have been granted their MD due to Illness and possible hardship, as per the HSE regulations.

    See our Facebook campaign, link below:

    Once again, many thanks


  2. Danny Murray said, on December 16, 2010 at 8:07 am

    Hi Sara:

    Is there a conspiracy of silence in relation to the USC and it’s impact on Medical Card holders?

    Why did the IT leave out this:

    ” There is an extra €115 million for additional medical cards which will inevitably be needed in 2011. However the decision to impose the universal levy on medical card holders simply reinforces the accurate public perception that this budget targets the poorest, the sickest and their carers.”

    I am also mystified and disappointed by your own failure to mention this in your DT slot this evening, despite your undertaking to do so.

    However, thanks anyway, see my previous comment.



    • saraburke said, on December 20, 2010 at 3:45 am

      I have no control over sub-editing processed in articles I submit to the Irish Times or any other news paper, plus they ran it a short notice and had to fit it in to the space provided. So no, I don’t think there is a conspiracy and I made sure to include it in it and to put full version on
      I did not mention it on Drivetime as I was covering a totally different, complicated topic and just did not have time or the opportunity to do so – such is the reality of live radio. Also as I had raised the issue in the Irish Times and article.
      I will continue to highlight if and when I can – thats all I can do…

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