Health Service Executive deficit doubles to €56m in February

The HSE’s financial deficit for the year more than doubled in February to some €56 million, official figures to be published this week are expected to show.

The development has prompted concerns that the health service would be facing an overrun of hundreds of millions of euro by the end of the year if current trends were to continue unchecked.

Minister for Health Leo Varadkar last night warned health service chiefs that if overspending was not curbed it could have significant implications on the funding that could be secured for next year.

Separately, the HSE is understood to be considering the imposition of “special measures” on hospitals that do not live within their official financial allocation.

The HSE recorded a financial deficit of just under €25 million for January, but it is understood that new figures will show that the deficit in February increased to about €56 million.

Demand-led schemes

It is understood that the financial report will state that about one-third of the overrun – some €18 million – relates to issues outside the direct control off the HSE, such as demand-led schemes including medical cards, reimbursement of drug costs in primary care, pension payments and the settlement of legal claims by the

State Claims Agency

.

Informed sources have forecast that the financial figures for March are likely to be in the same region as those recorded in February. This would mean a first quarter financial deficit of close to €100 million.

In addition, in the same period the Government provided €74 million in additional funding to the health service to deal with a crisis in the Fair Deal nursing home scheme and in hospital emergency departments.

The Sunday Business Post reported at the weekend that the Minster told a cabinet subcommittee meeting last week that budget pressures and additional services would mean the HSE would exceed its allocated budget before the end of the year or face having to introduce cuts in patient services.

Budget negotiations

Mr Varadkar said yesterday: “It is important that all budget holders across health contain spending or we will enter the budget negotiations in a more difficult position later in the year, which would make 2016 very hard for everyone.

“The Government has already allocated additional funds for the Fair Deal which has reduced the waiting list for a nursing home to four weeks from the date of approval, 250 convalescence beds to reduce hospital overcrowding and extra money to fund the new GP contract.

“In other areas, there are spending pressures due to the increase in discretionary medical cards now more than 50 per cent up on a year ago, new expensive medicines that have to be funded, and increased spending on staff by some hospitals.”

The Minister said the HSE was “aware of the need to ensure maximum cost control”.

It is understood that as part of the special measures being considered by the HSE, hospitals that exceed their budgets could lose planned investments, with the money transferred to institutions that lived within their official allocation.

The Minister said it was too early at this stage to predict the financial position of the HSE for the end of the year.