ERHA: The main teaching hospitals in Dublin collectively ran up financial deficits of more than 20 million in the first five months of the year, and the Department of Health has been warned that the situation could deteriorate in the months ahead. Martin Wall reports.
In an internal financial commentary for the Department of Health, produced at the end of June, the Eastern Regional Health Authority (ERHA) said the teaching hospitals - which include all the big voluntary hospitals such as the Mater, St James's, St Vincent's, Beaumont and Tallaght - were facing having to pay out millions more in pay awards towards the end of the year.
"These hospitals are showing deficits of 20.5 million for the period to the end of May 2004," the chief executive of the ERHA, Mr Michael Lyons, told the Department of Health in an analysis which has been seen by The Irish Times.
"There is significant additional expenditure to be incurred by the hospitals in the latter half of the year - for example, €12 million in pay awards - as well as the continuing cost associated with technology and the impact of opening closed beds," he said.
The ERHA also warned the Department of Health that the three area health boards in the eastern region - the East Coast Area Health Board, the Northern Area Health Board and the South Western Area Health Board - had a collective deficit of 14.3 million after the first five months of the year.
The Irish Times has learned that other health boards around the country also face a tough financial position.
The North Eastern Health Board told the Department of Health in a financial analysis six weeks ago that it was facing a shortfall of €14 million by the end of the year, based on current trends. The health board over-ran by 5.6 million in the first five months.
Its financial position will be offset to some degree by a contingency fund put in place at the start of the year.
The Western Health Board said it anticipated breaking even for the year. However, it said the reliance on a surplus carried over from 2003 to finance services this year was "worrying as this money will not be available to maintain activity levels".
According to Mr Lyons, the ERHA was continuing to monitor expenditure at Our Lady's Hospital for Sick Children in Crumlin which he revealed had run up a deficit of €1.3 million by the end of May.
"The ERHA recognises the need to control activity levels in the acute system given that the funding available in 2004 is provided on an 'existing level of service basis'," Mr Lyons said.
"Recent growth in the acute sector is being reviewed in this context."
The ERHA, in its financial commentary, also expressed concern about the impact of the Government's ceiling on staffing numbers within the health service.
"The employment ceiling remains a serious constraint in meeting our service obligations," Mr Lyons said.
"The ceiling is having the effect of impeding sensible and funded development and, furthermore, as you are aware, is leading to cost growth through increased contracting of staff at rates of 1.8 times the employed cost," he added.