Hospitals say they face €100m deficit

The main Dublin teaching hospitals have told health service chiefs they are facing a collective deficit of about €100 million for the year if they have to live within the level of Exchequer-funding allocated to date.

The Health Service Executive (HSE) is understood to have proposed the provision of about €70 million in supplementary funding for the hospital sector later in the year to deal with the new cash crisis.

However, the hospitals believe there will be a significant shortfall in funding even after the proposed injection of the €70 million and there is disagreement between them and the HSE over how this deficit should be met. The executive is believed to have argued that the hospitals should seek to deal with the shortfall through the introduction of additional savings and new value-for-money measures.

The hospitals are understood to have maintained that the projected amounts involved are too large to be bridged through efficiency measures alone.

A spokeswoman for the HSE said last night it was in negotiations with the main hospitals over funding for the year and it would not be making any further comment on the issue.

The Irish Times revealed yesterday that Beaumont Hospital in Dublin was forecasting "an unmanageable deficit" of about €10 million even if it received a 20 per cent share of the €70 million proposed in supplementary funding by the HSE. The hospital said without such supplementary funding it would face a deficit of about €25 million for the year and would be forced to introduce bed closures and to cancel development plans.

The Irish Times has also learned that management at Dublin's Mater hospital has told its board of directors it will face a potential €18 million deficit for the year if it did not receive further money from the HSE's €70 million supplementary allocation later in the year.

Financial managers at the hospital told the board that "based on an extrapolation of the expenditure for the first four months of the year, the hospital will be facing a deficit of approximately €6 million if we do not receive additional funding in excess of our assumed proportion of the €70 million".

The hospital board has instructed management to identify "a roster of headings" where savings could possibly be made in the remainder of the year. The board has also asked hospital management to request the HSE "to comment and suggest where they might see additional savings being made".

Although HSE chiefs have acknowledged that the level of Exchequer funding provided for the year is less than it believes is required, both the executive and the Government have insisted there should be no cutbacks in services for patients.

The interim chief executive of the executive, Kevin Kelly, confirmed to a Dáil committee in April that it would have to make savings of about €200 million this year on the allocations provided to it by the Government for distribution to hospitals and other health agencies.

Mr Kelly told the Dáil Public Accounts Committee that with the unification of 11 health boards into one executive, there was potential for "significant savings".