HSE agency costs increase by 139% despite a one-third increase in staff numbers

The cost of hiring agency staff in the Health Service Executive (HSE) has almost trebled since 2015, despite an increase of 32 per cent in the number of full-time staff employed by the service, a report by the independent Parliamentary Budget Office (PBO) has disclosed.

In a report on health spending in Ireland between 2015 and 2022, the PBO has found that the costs of hiring staff from agencies increased by 139 per cent in the seven-year period, from €259 million to €619 million.

“There appears to be a growing reliance on agency staff to deliver patient services, as the volume of hours completed by agency staff has been increasing,” it has stated.

The new report found the steep rise in agency costs came at a time when whole-time-equivalent staff numbers in the HSE also rose by a third – they were 32 per cent higher in 2022 than in 2015. This also drove up the overall costs of health services significantly.

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The report found over a quarter of all State spending (27 per cent) now goes toward health and the total initial Government expenditure provided for in 2023 was the “largest ever health budget in the history of the State in nominal terms”.

It also states that Ireland is a high spender in an international context on public healthcare and points out that quite a large provision of private healthcare exists in Ireland despite the significant public investment. It says the most recent data shows almost 50 per cent of the population has private health insurance.

The study finds that in 2023 Ireland has the third-highest spending per capita on healthcare as a proportion of Gross National Income in the EU after Germany and France. In 2019 Ireland was the sixth-highest spender.

“The growth in Ireland’s healthcare expenditure as a proportion of the total value of the economy from 2019 to 2020 is the second highest in the EU27, after Cyprus,” it stated.

It said the spike in spending could be attributed in part to additional funding being made available in response to the Covid-19 pandemic. However, it also pointed out additional funding for Covid “now appears to be retained in the health budget”.

The report finds the increases in pay costs have been driven by three key factors, the reversal of cuts introduced during the period of financial emergency 10 years ago; new public sector pay agreements; as well as the large increase in the number of staff employed by HSE.

It sounded a note of caution in terms of comparing Ireland’s health spending with that of other European countries however. It stated that research by the Economic and Social Research Institute (ESRI) concluded that due to differences in accounting practices across states, Ireland’s spending may be overstated compared to other EU states, due to the inclusion of social care related spending.