In her 2024 Insights, 2025 Outlook, Bank of Ireland’s head of Health Sector Gráinne Henson says the sector is well-positioned for progress.
“A significant reliance on the private sector to meet the shortfall in capacity presents strong opportunities for growth and innovation for the sector”
I’m pleased to share here with you my latest health sector update, which highlights a positive outlook driven by record levels of government funding, demographic changes and the adoption of new models and ways of working. We are witnessing increased collaboration between public and private sectors, leading to more effective healthcare delivery.
While challenges persist- no system is perfect- the evidence of improving health outcomes and the trend toward longer, healthier lives are quite clear. Additionally, we continue to depend on overseas recruitment to fill critical gaps in our workforce. Despite these challenges, the sector is well-positioned for ongoing progress.
Summary
Ireland continues to enjoy a robust healthcare system, evidenced by high life expectancy rates and comprehensive access to essential services. Recent data indicates the population has grown to approximately 5.38 million, reflecting an increase of 750,000 over the past decade. Notably, individuals age 65 and older account for over 15% of the population, a rise of 13.8% from 2018. The dual demographic challenges of an ageing population, which heightens demand for health services, and an ageing health workforce, which necessitates replacement of current health staff as they retire, are a significant issue for the sector.
The recent appointment of the new Minister for Health presents an opportunity for a renewed focus on these challenges, particularly as the newly published Programme for Government seeks to advance the realisation of Sláintecare, while addressing capacity, further infrastructure and workforce issues. The programme aims to develop a performance-related, multi-annual funding approach for health services, along with a seven days per week model of care. While such agendas aim to enhance efficiency, quality and access to care, they also add to the overall costs, creating a complex landscape with significant upward pressure on health spending.
In the broader context, in comparison to the turbulence experienced today in many regions of the world, Ireland has remained relatively stable and this is positively reflected in our health sector. This stability, the current policy direction, the change in demographics toward an older population, and increases in general levels of income, have all contributed to higher levels of health spending, with a 70% increase in government spending over the last six years. Despite ongoing challenges, there is optimistic outlook for 2025, with increasing opportunities on the horizon. A significant reliance on the private sector to meet the shortfall in capacity presents strong opportunities for growth and innovation for the sector.
Key health sector trends
Workforce
Ongoing workforce challenges persist within the sector, driven by skills shortages, competition for talent and exacerbated by a low unemployment rate of 4.5%. A recent BDO report indicates that the staff turnover rate in nursing homes is approximately 36.3%, significantly higher than other healthcare settings. Demand for healthcare assistants (HCA’s) is rising, largely due to the ageing population and increasing healthcare needs. Projections suggest a required annual growth rate of 3.5% to 4% for HCAs over the next 12 years, highlighting the urgent need for effective workforce planning, especially in private nursing home and home care settings, where turnover rates surpass those of HSE facilities. Data from the Central Statistics Office (CSO) shows that the health sector as a whole has a ‘churn’ (turnover) rate of 10.1%. While this figure reflects a more balanced staff turnover across public and private sectors, it masks the considerable churn rate in the private sector, emphasising the need for effective strategies to attract and retain staff amid wage disparities and employment dynamics between the public and private sectors.
Collaboration is ongoing between the Department of Health (DoH), the HSE, and other key stakeholders to advance the recommendations from the Strategic Workforce Advisory Group, including addressing issues related to recruitment, remuneration, working conditions and barriers to employment and training. Migrant workers account for a significant share of the health sector workforce. Data from the Department of Enterprise, Trade & Employment (DETE) highlighted the ongoing reliance on inward migration, with 30% of the nearly 40,000 permits issued allocated to the health sector – a trend that has been consistent since 2020.
Since 2021, individuals from outside of the European Economic Area (EEA) have been eligible to apply for HCA employment permits, provided they have a job offer with a minimum salary of €30,000 – a 10% increase from 2024. This requirement imposes a considerable cost burden on providers in the private sector.
A review of the permits issued in 2024 indicates that disability services, nursing homes and hospitals received the highest number of permits, underscoring the essential role that migrant workers play in sustaining the sector. Recent data indicates non-EEA staff accounts for 43% of the workforce.
The Continuum of Care
The 2025 budget allocation for older persons’ services has increased by €349 million, bringing the total budget to €3 billion. This record amount aims to support an integrated approach that offers a comprehensive range of services tailored to meet the specific needs of individuals throughout their life journey.
A key focus of this year’s HSE National Service Plan is is the integration of home and community support services, which includes a 10% increase in home support hours, particularly for higher intensity packages caring for those with complex needs, with plans to provide over 40 hours of support per week, where appropriate. In addition there is a renewed emphasis on daycare provision, recognising its vital role. The development of daycare services is complemented by initiatives such as the Meals on Wheels programmes.
There is also a commitment to increasing transitional care funding and community beds to facilitate timely hospital discharges for individuals who no longer require acute care.
To learn more and read about the 2025 trends to watch, download the FULL Insight & Outlook 2025 report for the Health sector below:
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Main image at top: Photo by National Cancer Institute on Unsplash
