Throwing money at the big spenders

The HSE’s new funding system is showering cash on hospitals that have failed to stay within their budgets

It’s that time of year when hospitals receive news of the budgets they are supposed to work within, and this year there are some clear winners and losers.

The 2012 allocations are based on the sums the Health Service Executive expects a hospital to spend during the year, rather than on historic budgets. In many hospitals the latter tended to be works of fiction, which is one reason large budget overruns were regularly seen at the end of each year.

The new system means that budget overruns in the hospitals at the end of 2013 will be less spectacular than in previous years, leading to fewer of the last-minute cuts to services seen in previous years as administrators struggled to balance budgets.

And that means less bad press for the HSE and Minister for Health James Reilly.

Rewarding offenders

However, the effect of this change is to punish those hospitals which have been keeping within their budgets, while at the same time appearing to reward offenders who consistently failed to adhere to budgets.

It’s a strange way of doing business and it seems to run counter to a lot of the recent rhetoric from the Department of Health, which has warned that overspenders would be punished, not rewarded.

Thus it is that St James’s Hospital in Dublin has been handed the largest single cut in its budget, which is being reduced from €264 million in 2012 to €255 million this year. Aside from being the largest hospital in the State, St James’s is also one of the best managed: it comes closest among all the big hospitals to staying within budget, it has far fewer patients on trolleys than the other Dublin hospitals and it recently landed the National Children’s Hospital project.

The allocations seem designed with a view to tackling the problems in the hospitals with the longest trolley waits.

While in most hospitals the figures for patients on trolleys, and for inpatient waits, have greatly improved, a number of hospitals haven’t been able to improve their systems sufficiently.

The solution put forward by the HSE is to throw money at the problem.

Trolley numbers

Thus, the Louth-Meath Hospital Group, which includes Our Lady of Lourdes Hospital in Drogheda, is getting 13.9 per cent more in funding this year, while the Mid-Western Regional Hospitals Group, which includes Mid-Western Regional Hospital in Limerick, is up 11.5 per cent.

In Dublin, two hospitals with big trolley numbers have also received increased budgets: Beaumont Hospital is up 8.4 per cent while Connolly Hospital Blanchardstown is up 6.2 per cent.

“Limerick and Beaumont overrun budgets because they admit patients too early, discharge them too late and have a very high ratio of private to public consultant activity. St James’s and some others do not,” said a disinterested but informed source.