Covid-19 leads to significant increases in healthcare spending in 2020 and 2021

Total spending on healthcare has increased in each of the last two years, driven mostly by expenditure relating to the Covid-19 pandemic, new data from the Central Statistics Office shows.

The CSO said health expenditure topped €26.5 billion in 2020, up 11 per cent on the previous year, as the Government increased spending to cope with the pandemic. Most of the €2.7 billion increase in spending related to expenditure on the pandemic that struck in February 2020.

The average increase in healthcare spending was lower, at 5.8 per cent a year, in previous years.

Preliminary data for 2021 shows that total expenditure on healthcare for last year was €28.4 billion — an increase of 7 per cent — of which €2.2 billion related to spending on Covid-19.

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The Covid-19 spending in 2021 shows that €803 million was spent on testing and tracing, or 36 per cent of the total, while €508 million was spent on Covid-19 vaccinations, or 23 per cent.

Total healthcare spending in 2020 equalled €5,283 per person. Government spending on health was below the average for developed countries. As a share of economic output, health spending amounted to 7.1 per cent of the State’s GDP compared with the Organisation for Economic Co-operation and Development (OECD) average of 9.7 per cent.

The Government financed 79 per cent of total healthcare expenditure while private health insurance companies covered 10 per cent of the spending.

Expenditure within hospitals accounted for 37 per cent of all expenditure on healthcare in 2020, followed by 21 per cent in GP, dental and healthcare centres, 18 per cent in residential settings and 12 per cent in pharmacies and medical retailers.

There was a 36 per cent increase in spending on preventive care, which includes expenditure on Covid-19 testing.

The latest Covid-19 figures show that there were 629 people in hospital with Covid-19 on Wednesday, an increase of just two on the previous day and the lowest increase since last month.

The number of people with Covid-19 in hospital intensive care units stood at 25 on Tuesday, an increase of two on a day earlier.

Meanwhile, new behavioural data shows a large increase in social activity and a reduction in mitigation measures such as mask-wearing and social distancing in recent weeks, which, combined with more transmissible variants in circulation, explain the rise in the number of cases.

The social activity measure compiled by the Economic and Social Research Institute for the Government showed a sharp increase in social activity during the first week in June, covering the June Bank Holiday weekend, unlike previous holiday periods during the pandemic.

The average locations visited was significant higher, while there were significant increases in visits to other households and hospitality ventures, the survey found.

The level of intercounty travel reached its highest level since the ESRI started tracking social activity data with almost one fifth of 1,000 adults surveyed during the first week in June saying that they travelled to another county. There was also an increase in international travel.

The proportion of people who had a close contact the previous day climbed to more than 50 per cent for the first time, reflecting the higher level of socialising by the public.

There was a sharp decline in mask-wearing and social distancing with six in 10 adults now reporting that they rarely or never engage in mitigation behaviour to stop the spread of the virus.