Hospitals warn of ‘exceedingly difficult’ financial position

Voluntary hospitals have warned the Health Service Executive (HSE) they are facing an “exceedingly difficult” financial situation, with an expected deficit across the sector of more than €300 million this year.

The Voluntary Healthcare Forum, which represents 18 voluntary hospitals, wrote to the HSE in August raising concern about its members’ deteriorating finances, stating some hospitals were relying on reserves or fundraising income to “keep afloat”.

The voluntary hospitals, which make up a significant portion of the country’s acute hospitals, told the HSE the sector was carrying accumulated historical deficits of €100 million.

In an August 2nd letter, Liam Dowling, chair of the representative forum, said voluntary hospitals were facing an “exceedingly difficult financial situation”.

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Mr Dowling told Ciarán Devane, chair of the HSE board, the precarious financial situation facing voluntary hospitals had continued to deteriorate this year.

“If we then consider the end of 2023, the position deteriorates considerably with a projected deficit across our members of €327 million,” he wrote. The correspondence was released to The Irish Times in response to a Freedom of Information Act request.

Mr Dowling said voluntary hospital boards were “very concerned” about the historical deficits, as well as the shortfall in 2023 funding, which he said needed to be tackled.

“Auditors are raising going concern issues with [hospital] boards, and some boards are utilising reserves or fundraised income to keep afloat,” he said. “We consider that it is a priority that these historical and current deficits are addressed,” he wrote.

The forum said hospitals were under pressure from inflation in costs in energy, surgical supplies and food.

There had been a fall-off in private income voluntary hospitals were able to generate, leaving income targets for the sector “unachievable”, he said. “We have no doubt that this is a matter that concerns the HSE board as much as it does our members,” he said.

“We are particularly concerned that these issues are resolved before the finalisation of the new health regions and the ensuing redistribution of budgets,” he said.

The correspondence comes as budget negotiations continue to the backdrop of a significant overrun in the health service. An Oireachtas committee last week heard the HSE was heading for a budget deficit of up to €1.5 billion by the end of this year.

The health overrun is expected to eat into the available funds at the Government’s disposal in Budget 2024, which is due to be announced on October 10th.

A HSE spokeswoman said it had provided voluntary acute hospitals with €207 million in once-off funding last year to break even. “The historical deficits arise from a much earlier time frame. The HSE does not have capacity from within its current year allocation to deal with historical deficits,” she said.

Financial accounts for 2022 filed by the Mater hospital in Dublin showed the hospital was carrying more than €22 million in an accumulated financial deficit. At the time the hospital said the lack of any commitment from the HSE for funding to clear the historic deficits was creating uncertainty for the organisation.