Minister for Health welcomes the publication of the ‘Healthcare Capital Investment in Ireland’ series

The Minister for Health, Stephen Donnelly TD, and the Minister for Public Expenditure and Reform, Michael McGrath TD, today, published the ‘Healthcare Capital Investment in Ireland’ series as part of the 2021 Spending Review process to improve the evidence base for policy decision making.

The aim of this work is to inform the development of the first Strategic Investment Framework for Healthcare in Ireland. This will better align healthcare investment over the next decade with the National Planning Framework and National Development Plan (NDP) under Project Ireland 2040.

The series provides an overview of policy and analysis of healthcare capital investment in Ireland, covering three distinct but related policy areas:

1. Analysis of Historical Investment in Healthcare

2. Strategic Considerations for Future Capital Investment in Healthcare

3. Dealing with Uncertainty & Risk: The Application of Reference Class Forecasting to Future Capital Investment in Healthcare

This series identifies key challenges to the delivery of healthcare investment in Ireland, including, potentially imbalanced investment allocations by region and care setting, limited prioritisation across projects, and the possible emergence of cost variance in the delivery of the planned portfolio.

These identified challenges will be addressed through the first Strategic Investment Framework for Healthcare, which is designed to ensure that projects address long-term strategic priorities and balance multiple objectives including, patient safety, value for money, and future healthcare demand.

Requirements of the Public Spending Code will be fully embedded in the operation of this Framework.

Minister for Health, Stephen Donnelly T.D. welcomed the publication saying:

These papers, and the subsequent Strategic Investment Framework will seek to ensure a strategic, effective and efficient approach is applied to public investment in Health going forward.

Healthcare Capital Investment in Ireland Series

This series of papers was produced by Irish Government Economic and Evaluation Service (IGEES) staff in the Department of Health Research Services Unit. The series is published as part of the Spending Review process and has been subject to extensive peer review. The Spending Review is a key platform for evidence informed policy making across the Civil Service. The research was undertaken to aid the development of the first Strategic Investment Framework for Health.

The series provides an overview of policy and analysis of healthcare capital investment in Ireland, covering three distinct but related policy areas to guide future health infrastructure investment:

1. Analysis of Historical Investment in Healthcare

2. Strategic Considerations for Future Capital Investment in Healthcare

3. Dealing with Uncertainty & Risk: The Application of Reference Class Forecasting to Future Capital Investment in Healthcare

Paper 1: Analysis of Historical Investment in Healthcare

1. Summary: This paper provides a historical overview of, and context for, Public Healthcare Capital Investment Trends in Ireland, from early state provision up to present day. It also provides an overview of the performance of Irish healthcare capital investment relative to international peers, through the examination of a number of capital related health metrics.

2. Findings: The paper finds that there has been a lack of centralised strategic direction for healthcare investment decisions historically, indicating room to improve. It also provides evidence that Ireland is behind European comparators on capital related health metrics, including waiting lists, occupancy and acute care beds.

Policy Implications:

The paper ultimately advocates for the development of a Strategic Investment Framework for healthcare, as well as recommending a re-examination of the balance between current and capital expenditure in healthcare. It also recommends a re-examination of the balance between current and capital expenditure in healthcare.

Paper 2: Strategic Considerations for Future Capital Investment in Healthcare

1. Summary: This paper utilises international capital investment literature and Irish strategic documents to develop a series of initial criteria that will inform prioritisation decisions under the Strategic Investment Framework for Health. The paper then analyses planned healthcare investment under the previous National Development Plan (NDP) 2018 – 2027, exploring this prospective expenditure with reference to proposed strategic investment criteria and existing NDP objectives.

2. Findings: The paper identifies a number of general and health specific challenges that are associated with the delivery of infrastructure projects. The paper also reveals a number of areas where prospective healthcare investment could be further aligned with strategic priorities, including care setting balance, regional balance and risk management.

Policy Implications:

The paper recommends the development and implementation of a Strategic Investment Framework for healthcare to ensure that future investments are aligned with, clinical and patient safety needs, national strategic outcomes, demographic and regional needs, and sustainability and Climate Action.

Paper 3: Dealing with Uncertainty & Risk: The Application of Reference Class Forecasting to Future Capital Investment in Healthcare

1. Summary: This paper focuses on the problem of cost variance in the management of large-scale infrastructure projects, both internationally and across multiple sectors. The paper compiles a database of international and Irish capital investment projects and uses this to inform the likelihood and size of cost overruns in this context. The paper then applies this analysis to planned healthcare projects within the National Development Plan 2018 – 2027.

2. Findings: A review of international literature contained in the paper reveals that cost overruns and delays to large infrastructure projects are a common issue for many governments and private institutions. An analysis of international cost variance data is applied to projects within the Irish NDP 2018 – 2027, identifying a potential risk of cost variances as these projects move towards delivery.

Policy Implications:

The paper advocates for the use of Reference Class Forecasting coupled with identified cost containment strategies to manage deliverability risks associated with cost overruns and delays for large infrastructure projects. The paper also highlights the value of competitive internal prioritisation through a Strategic Investment Framework, in the context of the existing NDP allocation for healthcare.