Health accounted for 40% of all Government spending overruns in recent years, according to the Irish Fiscal Advisory Council.
In his latest analysis, its Senior Economist Killian Carroll outlines consistent overspending in health and hospitals.
Health accounted for 50% of the overrun in 2023 and 55% in 2024, before falling to 14% in 2025.
The overrun in 2024 was particularly striking, the IFAC noted. Health spending exceeded its budget by €1.75 billion (8.1%), making it the largest overrun on record, Mr Carroll points out.
Following that overrun, the Government introduced the first multiannual budgeting plan, which the IFAC welcomed.
That resulted in the 2025 overrun in spending being the smallest since 2017.
"It helped put health spending on a more realistic footing and should be repeated, both in health and in other areas of spending".
However, that measure is not enough, he argued.
More needs to be made to deliver realistic estimates for spending in the health sector, with the IFAC pointing specifically at hospital spending.
Hospitals accounted for an average of 37% of total HSE spending over 2023-2025.
Over the past three years, hospital spending has overrun by an average of €1.2 billion a year.
Mr Carroll argues that hospital budget are set "as if yesterday never happened", meaning the spending of a previous year is not taken into account.
"This means they have implicitly assumed large savings from efficiency or better care models, even though similar savings failed to materialise in previous years."
In 2023-2025, hospital budgets were set below the actual level of spending in the previous year - for example, the 2024 budget for acute hospitals was set €0.6 billion below what was actually spent in 2023, the IFAC highlighted.
"This is difficult to justify", Mr Carroll continues.
He argues that the annual increase in health costs is predictable, with salaries, inflation, demographic pressures and growing demand all pushing spending upwards.
"Budgets must be based on reliable estimates of current service costs and realistic savings targets."
Looking at 2026, IFAC's Senior Economist notes that it is the only year when the acute hospital budget is actually higher than the previous year spending - by €6 million.
This increase is unlikely to prevent overspending, Mr Carroll noted, though the size of the health budget overrun for this year remains to be seen.
