€130m in UK funding helps cut HSE deficit

THE HSE has received about €130 million in funding from the UK government, a move which is likely to slow down the rate of increase in its financial deficit.

The money is paid under an agreement that allows health authorities here to receive payment for the cost of providing treatment to people covered by the UK health system but who are staying or residing in Ireland. These are mainly pensioners, temporary visitors or dependent families of workers.

The money from the UK is paid annually. However the impact of the receipt of the UK money in July as well as measures to cut down on the use of agency staff and on overtime payments are understood to have significantly driven down the rate of increase in the HSE deficit.

Separately the State-owned health insurer VHI is set to provide an advance payment of about €80 million to the HSE as part of an understanding reached with the Department of Health.

In return for the “advance”, the Department of Health will not this year introduce promised legislation to allow public hospitals to charge all private patients treated in their facilities.

It is understood the department has also agreed as part of the deal with the insurance company not to allow the HSE to move beds designated for private patients from smaller hospitals outside of Dublin to busier hospitals in the capital. Such moves by the HSE last year cost the VHI about €15 million.

The Department of Health has been engaged in talks with other insurers about securing similar advance payments. Overall the measure could be worth about €125 million.

The “advance” to be provided by the VHI represents money which would have been paid over in any event in respect of subscribers treated in public hospitals.

However the timing of the payment in many cases had been delayed due, for example, to consultants not signing the required forms, or to other queries raised by the health insurer.

The “advance” represents a percentage, but not all, of the money which the VHI had expected to pay in relation to its subscribers treated in public facilities.

The money will be paid up-front, leaving the paperwork and other queries to be addressed at a later date.

The “advance” is separate from the €75 million or so in additional funding which the Department of Health had anticipated receiving this year from health insurers as a result of proposed changes to private bed designation arrangements in public hospitals.

The Government announced late last year that it planned to abolish the existing system of designated private-public beds in public hospitals.

This would allow public hospitals to raise charges in respect of all private patients treated in their facilities.

About 20 per cent of beds in public hospitals are designated for fee-paying patients, generating annually €350 million from insurance companies.

However, not all private patients can be accommodated in these designated beds. In such cases the insurance companies cannot currently be charged.

The HSE deficit stood at €281 million to the end of May. A financial report for June, which is likely to be published later this week, is expected to show that this figure has increased but not by a significant amount, possibly to around €300 million.

The board of the HSE held a special meeting on Monday to consider the financial position.

A statement issued by the Department of Health said HSE management had received endorsement from the board for their proposals to control expenditure on sick pay, overtime, agency staff and holiday replacements as well as for measures to control spending on medicines.

The Department of Health declined to comment on the proposals.

Other proposals for dealing with the HSE deficit are understood to have been submitted last week to the Cabinet subcommittee on health.