HSE almost €60m over budget in first two months of year

The Health Service Executive was almost €60 million over budget in the first two months of this year, new figures show.

The overrun of €58.4 million was largely accounted for by overspending of €48.8 million in hospitals and €8.8 million in social care, according to the latest performance report from the HSE.

All the main hospitals are significantly over budget, led by University Hospital Limerick which has an overrun of €4.4 million in two months, or 16 per cent. Beaumont Hospital has a deficit of €3.6 million, and Tallaght, St Vincent’s, University Hospital Galway and Sligo hospital all have deficits of more than €2 million for January and February.

The figures point to an end-of-year deficit of more than €350 million and a severe headache for the Government, which is prevented by newly-implemented EU budgetary rules from shoring up the HSE in the traditional manner with a supplementary budget. The new administration has committed to the introduction of a number of new measures and the reduction of some fees, which are likely to put the finances of the health service under even greater strain.

Rising demand

The HSE has been provided with an additional €817 million this year but when account is taken of earmarked new developments and the cost of providing existing services to meet rising demand, it says it had a real increase of just €67 million.

National pay agreements, quality and safety requirements, price rises and new drugs are also serving to increase costs.

The HSE says it is mitigating this trend of rising costs by strengthening payroll controls, reducing waste and increasing productivity.

“Thereafter, to the greatest extent practicable and consistent with the safe delivery of services, we will deliver services at 2015 levels or at an increased level where this is supported by the funding available.”

The report warns of the “substantial financial risk” being managed by the HSE given the demographic, regulatory and other pressures upon it.

In addition to the performance areas there are significant financial pressures in the PCRS (medical cards) and other demand led areas that arise as a result of the demographic, economic and other factors. There will also be particular challenges in meeting compliance with regulatory requirements in both the disability and older persons sectors within the funding available. While it is not possible to eliminate these financial risks in full, the HSE will make every effort to manage them to the greatest extent possible within the resources provided.”

The report says there is “limited confidence” that interim pay controls introduced last February are being applied across a number of hospitals. As a result, this issue has been escalated to the most serious level of urgency involving significant risk.