The financial position of many Irish hospitals will be "unsustainable" if expenditure trends experienced in the first few months of the year continue, senior health service management have warned the Health Service Executive (HSE).
The latest official financial report for the health services released by the HSE reveals that many hospitals overran their budgets by over €112 million in the first four months of the year.
HSE management told the HSE board that while expenditure levels had not grown significantly since January, that it was concerned at the ongoing trends.
The Irish Times has learned that in a separate report to the Department of Health several weeks ago, HSE chief executive Prof Brendan Drumm said the organisation was developing a plan to deliver a financial break-even position for the remainder of the year.
However, Prof Drumm warned that there were early indications that the "National Hospitals Office in its own right cannot deliver sufficient cost-saving measures to achieve a balanced budget".
"There are significant legacy issues in some hospitals which crystallised when the pillars [ the various sectors of the HSE] were formed and hospitals were left short of ongoing core funding.
"It is vital to re-establish the relevant funding to these hospitals in order to focus on financial control in 2006.
"The management team is examining the implications of the legacy issues and the current expenditure rates in the context of the global resource and the vote management responsibilities of the chief executive," Prof Drumm wrote in his report to the Department of Health.
The report reveals that in financial terms, Tallaght Hospital recorded the largest overrun in the first four months of the year.
It says that in the first four months, Tallaght Hospital overspent its budget by more than €6.5 million - or by more than 10 per cent.
In an internal memo to the HSE in March, Tallaght Hospital warned that it could face a deficit of up to €29 million in the current year.
However, a spokeswoman for Tallaght Hospital said last week that it was still in talks with the HSE about its financial position and that it still hoped to break even by the end of the year.
The financial report presented by HSE management to the board of the organisation also lists Letterkenny General, the Mater and St Vincent's in Dublin and Our Lady of Lourdes in Drogheda as hospitals that recorded significant overruns on their budgets in the first four months.
Letterkenny General recorded a financial variance of €5.8 million, the Mater €5.05 million, Our Lady of Lourdes €4.99 million and St Vincent's Hospital €4.7 million.
The hospital network in the northeast recorded an overrun of around €15 million or 22 per cent.
The HSE last week maintained that the overruns recorded by hospitals would not lead to cutbacks in services for patients.
However, The Irish Times revealed yesterday that senior HSE management had put in place a directive early in the summer that hospitals and local health areas that had recorded overruns of more than 5 per cent in the first four months of the year would be excluded from consideration for additional development funding.
The introduction of these instructions generated disagreement among senior managers of the HSE.
Last night, the Irish Hospital Consultants' Association (IHCA) expressed grave concern at the exclusion of hospitals with budget overruns from access to development funding.
The IHCA said that it was concerned that this could affect patient care.
It said it also appeared that the move would be "self-defeating" in that some of the projects that were excluded from receiving funding were aimed at providing services in the community and keeping patients out of hospitals.
