Financial deficit of HSE now at €374m

Wed, Oct 10, 2012, 01:00

THE FINANCIAL deficit in the HSE has now reached over €370 million, senior health service officials revealed last night.

The HSE’s director general designate, Tony O’Brien, told the Dáil Public Accounts Committee last night that the overrun as of the end of September stood at €374 million. At the end of August the figure was €329 million.

Separately last night it emerged that Tallaght Hospital in Dublin had secured a bank overdraft facility of over €12 million to help its cash flow. The hospital was over-budget by over €10 million in July. The hospital had sought a letter of support from the HSE for the overdraft from AIB.

Senior HSE sources said last night that hospitals were permitted under their service level agreements with the health authority to draw down such overdrafts as long as it occurred in the fourth quarter of the year.

On foot of revelations about the scale of the HSE deficit , Sinn Féin TD Mary Lou McDonald forecast that it could face a deficit of €509 million by the end of the year. If the HSE had put in place non-frontline cuts of around €70 million this left a “massive hole” of €438 million in real terms to be filled.

Mr O’Brien said €72 million in savings would be generated from non-frontline areas such as cash and stock management. He said it had been announced in August that €58 million in cuts would be made in frontline services. That balance would come on the income side.

Department of Health secretary general Ambrose McLoughlin said work was under way to deal with the financial position. He declined to be drawn on the specifics on the basis they were policy issues which would be announced by the Minister in due course.

The Irish Times has reported previously that other measures likely to be included were savings on drugs costs as part of a deal with the pharmaceutical industry, a €125 million advance payment by the health insurance companies, around €30 million in reduced capital spending and a €45 million settlement with a UK-based medical defence company.

Meanwhile at the meeting of the committee last night a Fianna Fáil member described Mr McLoughlin as a “disgrace” and “unfit for office”.

Sean Fleming made the strong criticism of Mr McLoughlin after he said he could not answer certain questions posed by members as they were policy matters.

Mr Fleming walked out of the meeting after saying that Mr McLoughlin should resign.

Mr McLoughlin later said he expected that on reflection Mr Fleming would contact him personally.

At the hearing HSE officials also revealed that €74 million was currently outstanding in payments due from private health insurance companies because consultants had not signed the appropriate forms. Under questioning from Fine Gael TD Kieran O’Donnell, the HSE’s national director of finance Liam Woods said that between €5 million and €8 million was due for up to one year.